OCTOBER 2009 I ISSUE SIXTEEN I PAGE 1

October 2009 I Issue sixteen

On Monday, 14 September, there was an air of festivity inthe Sebokeng township’s Zone 3, when staff fromEmerald Casino Resort paid a visit to mark the officialhandover of the NCAW’s newly renovated facility – theNCAW Home-Based Care Centre.

The NCAW is a national non-profit organisation that mainlycomprises retired volunteers who have been trained ascaregivers. The organisation’s health desk co-ordinator, ElsieMolefakgotla, explained that the old building – which hadbeen bought with international donor funding – had beenrather dilapidated. The intrepid ladies of the NCAW got stuckin with some DIY work, until the Emerald Foundation steppedin to complete the job.

A number of local suppliers and contractors donated goods,services and time for this worthy cause. Work that was carriedout included fencing, electrical work, painting, tiling, installinga geyser, landscaping, irrigation and laying a driveway, withEmerald maintenance staff lending a helping hand.

The result is a facility that the NCAW can be proud of, andthat is a validation of all the hard work they undertake in thecommunity.

In addition to providing home-based care to some 200patients with HIV/AIDS, tuberculosis and other chronicdiseases, this humble group also runs a soup kitchen for alocal school, Itokisetso Primary. A number of learners from theschool treated the guests to a rousing hymn during theunveiling of the home-based care centre.

Emerald Casino Resort CEO Martin Rice, who was personallyinvolved in the project, thanked the NCAW for the “incredible”work they do in the community.

EMERALD FOUNDATION SPRUCES UP CARE CENTRE FOR VAAL VOLUNTEER ANGELSThe retired ladies from the National Council for African Women (NCAW) in Sebokeng work tirelessly tocare for the ill and frail, and to provide hot meals for needy schoolchildren in the area. Now these“granny angels” also have refurbished offices from which to carry out their good deeds, thanks to theEmerald Foundation.

PAGE 2 I OCTOBER 2009 I ISSUE S IXTEEN

Commercial banks should also be awarethat by facilitating transactions involvingillegal Internet gambling expenditure orreceipts, they run the risk of prosecutionunder “proceeds of crime” provisions in theFinancial Intelligence Centre Act (FICA)and other related legislation.

It has therefore been gratifying to note thatthe National Gambling Board has begun totake action against those who seek toreceive “winnings” from these illicitoperations. As a result of the NGB'sapproach to the South African BankingAssociation, the commercial banks havebegun to remit monies won as a result ofthis activity to the National GamblingBoard. While the number of such casesthus far has been limited, it is a clearindication that both the regulatoryauthorities and the banking sector aretaking this scourge seriously and areprepared to act decisively to protect thelegitimate interests of CASA members andother gaming service-providers whooperate within the bounds of the law.

While the National Gambling AmendmentAct of 2008 provides for the legalisation ofinteractive gambling, the regulations that willmake this possible are still beforeParliament's trade and industry portfoliocommittee. It is possible that furtherconsideration of these regulations may beheld over until the committee has received thereport of the Gambling Review Commissionappointed by the Minister earlier this year.However the legislative process proceeds,we are still some way from the fullregularisation of Internet casino facilities.

Until then, it is intolerable that thestringently-regulated, law-abiding casinosector should be subjected to unfaircompetition from the activities of an arrayof illegal operations that adhere to norestraints, advertise their services withoutregard for public welfare and offer noprotection to their customers.

A recently-published research report by theNational Responsible GamblingProgramme has pointed out that, whilegambling problems are limited in SouthAfrica and are being conscientiouslyaddressed, the medium-term picture is

disturbing because of the rise of Internetand other remote forms of gambling. Thereport describes Internet gambling as “theelephant in the room” which seems certainto dominate the entire regulatory and harm-minimisation space in the future.

It emphasises that the inevitable dramaticgrowth in the number of South Africansgambling on the Internet will raise acuteproblems for policy-makers, regulators andresponsible gambling service-providers. It isfor this reason that CASA has submittedsubstantial and exhaustively-researchedrecommendations to the relevant authoritiesin order to ensure that the final regulationsgoverning such activity protect players fromdishonest and unfair practices, deny accessto minors, enable the monitoring of problemgamblers and limit the scope of advertising.

And there is ample evidence that regulationof this type has already succeeded inproviding South Africans with safe, reputableand honest gambling opportunities. Thesame NRGP report shows that the number ofproblem gamblers in South Africa hasremained constant since the NRGPconducted its first prevalence study in 2005.It confirms what previous studies in SouthAfrica and in comparable jurisdictionsinternationally have found, namely thatproblem gambling numbers tend to be lowcompared to other social problems and theirprevalence does not tend to increase overall.While gambling problems range from themild to the very severe, the study establishedthat over 95% of the adult populationexperiences no problems of any kind, withonly 0.5% experiencing very severeproblems and about a further 4% more orless mild problems.

Based on a representative survey of 3 000adult South Africans living in Johannesburg,Pretoria, Durban and Cape Town, the reportshows, too, that public attitudes towardsSouth Africa's legalised gambling regimehave remained consistently positive over thepast five years – suggesting that the industry'sadherence to the highest standards ofregulation, probity and social responsibilityhas paid fulsome dividends. In 2008 - whenthe study was conducted – 44.6% ofrespondents indicated that they were happywith the current regulatory framework, while23% thought there should be feweropportunities to gamble legally. Thisrepresents a significant increase over thefigure for 2005, when 34.37% ofrespondents said they were satisfied with thestatus quo and 47.6% were ambivalent butaccepted the situation.

As the NRGP report says, it is not impossibleto use technology to tame technology. But thiscan only be achieved within the frameworkof a clearly articulated and well regulated setof rules. If we have managed to get it right inthe case of land-based casinos, there is noreason why we should fail to do the same forInternet gambling activity. But until thatregulatory framework is in place, theNational Gambling Board, the Reserve Bankand the commercial banks are correct inapplying the full force of the law to whatremains an unlawful and uncontrolled sector.

CE’S COLUMNFor some time, CASA has beenexpressing its dissatisfactionabout the proliferation of illegalInternet gambling sites. It cannotbe stressed too strongly that theadvertising, promotion andoperation of such activitiesremains unlawful in terms of theNational Gambling Act and thatto receive “winnings” fromthese operators is illegal.Likewise, the Reserve Bank'sexchange control rules make itillegal for South Africanresidents to participate inforeign betting activities, andcontravention of this rule maylead to the withdrawal of atransgressor's credit or debitcards and to prosecution.

OCTOBER 2009 I ISSUE SIXTEEN I PAGE 3

The project seeks to create jobs, alleviate poverty,develop skills in agriculture and create a sustainablebusiness for the Caritas HIV Hospice Centre, where it isbased. The tract of land also houses a pre-school for AIDSorphans, who will also benefit from the project. Participantswill be trained in business & financial management andmarketing during a 5-week training session.

Candidates were selected from the pool provided byoutpatients at the Caritas Hospice, recently-retrenched DRDGold employees and unemployed people from theEkhuruleni area.

AERCT Executive Trustee Sandy Hattingh believes that it is arare privilege for Carnival City, the Afrisun East RandCommunity Trust and DRD Gold to have been granted anopportunity to make a difference in the local community.“We look forward to seeing this project up and running andcan’t wait to stand side by side to celebrate the new leaseon life that this project has given to the community,” she says.

Project participants will also benefit from the fact that whilethey are training, all the entities behind the project will bedoing their best to ensure the project’s success, with theprovision of the required equipment and tools & tunnelstaken care of and soil testing and preparation alreadyundertaken.

The Afrisun East Rand Community Trust

(AERCT) has partnered with Carnival City

and DRD Gold to develop a tunnel farming

project to benefit 31 unemployed Ekhuruleni

residents, to the tune of over R1 Million.

AERCT,Carnival City

and DRD GoldPartner in

AgriculturalProject

The Botshabelo CreationDevelopment Centre (BCDC)received a donation of 21 textilemachines from the Windmill Corporate Social Investment (CSI)Thabo Trust. The sewing,overlockers and embroiderymachines were officially handedover on 30 July by Mr. RickertHermann, a committee member ofWindmill and Mr. Sam Chaka, aboard member of Windmill andChairperson of Thabo Trust.

”We are so humbled to receivethese machines as it will help ourcentre as we train people who arewilling to make a difference intheir lives and for others”, saidJulia Letele, the Centre Manager.The donation ceremony was

attended by other board membersof the centre and the employees ofthe Windmill Casino, Ms. KarenCoetzer and Evone Fernandes.

The Windmill CSI Thabo Trust wasformed as a way of giving back tothe community of Botshabelo andThaba-Nchu after the Thaba-NchuSun closed down and people losttheir jobs. The dividends for thetrust are from Windmill Casinoand the trust has already helpedwith a building at BotshabeloCentre for vulnerable childrenworth R450,000, MoiponePrimary School in Thaba-Nchuand renovations at the Ereskuldworth R47,000 and Mmabanareceived a kiln worth R112,000.

WINDMILL CSIDONATES TEXTILEMACHINES TOBCDC

PAGE 4 I OCTOBER 2009 I ISSUE S IXTEEN

BUILDING AN EFFECTIVE REGULATORYFRAMEWORK: HOW DO WE MEASURE UP?

l egalWATCHl e g a l W A T C H

continued on back page

No one could have accuratelypredicted the recent expansion ofgaming worldwide. History will viewthe 1990s as the world’s greatexperiment with casino gaming.Twenty years ago, Nevada was alonein the United States in using thegaming industry to stimulate tourismand growth. Outside the United States,only a few casino venues existed.

With expansion has come confusion,particularly in the area of regulation.Jurisdictions that rushed and blindlyadopted the regulatory systems ofNevada, New Jersey or Great Britainfound they created more problemsthan they solved. While Nevada, NewJersey and Great Britain have effectiveregulatory systems, their authorsdesigned their respective systems toreflect unique policy goals,capabilities, expertise, and history.Little chance exists that a newjurisdiction will have the samecircumstances as an existingjurisdiction to allow mere copying of aregulatory system.

Regulation is important to assurepublic confidence in the integrity of thegames and to increase publicacceptance by removing anyperception that criminals haveownership interest in the casinos.Governments should also be awarethat regulation can inadvertently stiflethe growth of an industry. If the goal ofa jurisdiction is to use casino gamingto stimulate tourism and raise revenue,the best regulatory system will achieveits regulatory goals at the least cost tothe regulated and with the leastinterference with the operator’sbusiness judgment. This is important ina world economy with increasedcompetition.”

Foreword: International Casino Law(Cabot et al, 1993) by Grant Sawyer:Governor of Nevada (1959 – 1967)

Some twelve years into the formalregulation of licensed casino gamblingin South Africa, it is appropriate tofocus critically on what has beenachieved to date, in an attempt notonly to determine whether our currentregulatory framework meets theobjectives it was intended to serve inthe most efficient and effective manner,from the perspective of regulators andlicensees alike, but also, equallyimportantly, whether it is flexible anddurable enough to meet the demandsposed by the ever-changing economicand technological landscape in whichit operates.

Sawyer’s remarks above contain asalutary reminder of a central truthwhich is often overlooked; namely thateffective regulation is a two-way streetwhich benefits the regulator and theindustry alike. When regulation iseffective, a stable and vibrant gamingindustry will follow, resulting in ademand from new operators seekingto invest in gaming operations in therelevant jurisdiction.

What then are the central elements ofgood regulation in the South Africancontext? As part of the answer to thisquestion, it is important to establishwhat the legalisation of the industrywas designed to achieve. TheWiehahn Commission, which in 1995released its seminal “Report onGambling in South Africa”, which wasto form the philosophical bedrock ofthe subsequent legalisation ofgambling in the country, highlightedthe following key considerations inmotivating the legalisation of theindustry:

(i) the virtually completeprohibition on gamblinghad been, and wouldcontinue to be, unsuccessful andwould continue to feed the growthof a predatory illegal industry;

(ii) the continued ban on gamblingwould drive revenue outside of thecountry to neighbouring states,where no such ban existed,whereas licensed gambling wouldprovide much-needed revenue tothe fiscus;

(iii) the legalisation of gamblingwould result in economicdevelopment and the creation ofemployment opportunities, and

(iv) the Board foresaw “that manyfacets of the tourist, leisure, andfree-time industry in South Africacould benefit substantially from alegalised system of gambling”.

It is clear from the above that as thelicensed gambling industry in SouthAfrica was born of the need primarily“to use casino gaming to stimulatetourism and raise revenue”, Sawyer’sremarks are a useful touchstone formeasuring the effectiveness of regulationin this country. It is therefore important tofocus on the extent to which theregulation of casino gambling hascreated enough scope for the growth ofthe industry, and steered clear of over-regulation, in order to achieve thisunderlying objective.

In South Africa, as anywhere in theworld, policy goals must be clearlydefined by government, conveying aclear vision as to what the industryshould achieve; effectively publishedand consistently applied, so as toensure predictable outcomes andjurisdictional stability. The NationalGambling Act, Act 33 of 1996,

OCTOBER 2009 I ISSUE SIXTEEN I PAGE 5

EMFULENI RESORTS TOINVEST R1 BILLION IN

PORT ELIZABETH

The casino and its adjoiningEntertainment World have attractedmore than 24 million visitors since openingin October 2000, but the licence expires in 2010. The final granting of the new 15-year licence depends on the approval of the responsible provincial MEC, and thenegotiation of conditions.

In terms of the bid, Emfuleni will invest R1 billion in a five-star hotel, an internationalconvention centre, a new smoking casino,the longest water tunnel in the world, musicalfountains, a spa and fitness centre, newgaming machines and additional parking.

It is proposed that the total number of directjobs would increase from 480 to about2100 once the development is fullycompleted. The total number of indirect jobs

would almost double from 4300 to about8300 in 2025.

At the start of the new 15-year licence period,Emfuleni would have an effective blackeconomic empowerment (BEE) shareholdingof 52.1 percent, of which 35.6 percentagepoints would be held in the Eastern Cape.

In addition to this, the Boardwalk would becommitted to sourcing at least 55 percent of its goods and services from locals and 65 percent of the total from BEE supplierscountrywide.

Emfuleni projected that it would also commit1 percent of its net profit after tax towardsthe social investment projects and 3 percent to the development of newenterprises over the licence period. Thiswould amount to an estimated R120 million

and most of it would be allocated tocommunity projects aimed at benefitingblack residents of the Eastern Cape andwould also be of significant benefit to localcommunities.

During the licence period it is estimated thatthe Boardwalk would contribute aboutR600m to the fiscus by way of taxes, leviesand fees and as much as R26bn to indirecthousehold income in the Eastern Capeprovince. It is predicted that by 2025 thecumulative contribution to gross domesticproduct could amount to as much as R50bn.

The renewal of the licence would mean acontinuation of a subsidy now paid to theFish River Sun, together with a capitalinjection of R30m, which will in turnmaintain critically needed jobs in adepressed area.

Emfuleni Resorts has been chosen by the Eastern Cape Gambling and Betting Boardas the preferred bidder for the casino licence in Port Elizabeth following their specifiedplans to enlarge and improve the Boardwalk Casino.

PAGE 6 I OCTOBER 2009 I ISSUE S IXTEEN

Suncoast’s partnership with Vukukhanye,a public benefit organization based inChesterville, Durban, aims to contributepositively to the social, environmental andlaw enforcement levels of the community.

“We are humbled and privileged to beable to play a part in improving the qualityof life for the entire community ofChesterville, both through financial supportand the investment of time and effort by ourstaff,” said Suncoast’s executive directorMike Dowsley. “The introduction of thebursary sponsorship is especially excitingfor us as it adds a new dimension to any ofour previous CSI commitments and we lookforward to seeing the impact of the supportfor a long time to come.”

Suncoast will provide eight school andtertiary bursaries, which will include schoolfees and financial support for otherexpenses. In addition, sports equipmentand gear will be donated to Vukukhanye’s‘Sport For All’ project, with 100 childrenbeing enrolled to take part in the project.

Vukukhanye was formed in 2001 inresponse to the serious threat to child andfamily welfare caused by the HIV/Aidsepidemic in Chesterville and Cato Manor.The organisation’s activities cover a widerange of areas including feeding schemes,the establishment of the Zamokuhle andBamba Izandla creches, adult literacytraining, skills training and incomegeneration projects, a rape crisis centre, adisabled people’s support group andHIV/Aids education and care via theChesterville Satellite Hospice.

“Our focus is on the holistic development ofthe community of Chesterville,” saysVukukhanye’s chief executive officer Anthonyvan der Meulen. “Areas of strategic activityinclude orphans and vulnerable children,early childhood development, youth andadult education, development andcommunity safety and HIV/Aids.”

Suncoast supportscommunity upliftmentwith VukukhanyeCommunity

As part of the ‘TouchingLives’ Campaign, Suncoast

has announced theirsupport of ‘Vukukhanye

Community UpliftmentInitiatives’ as their chosen

charity for the nextfinancial year.

OCTOBER 2009 I ISSUE SIXTEEN I PAGE 7

Amy Filander joined Mykonos Casinoin January 2008 as a payrolladministrator. She has had theopportunity to attend numerous trainingcourses giving her the opportunity todevelop herself within her chosencareer. “Working in the casino industryhas definitely given me a broaderknowledge and skill base, says Amy.“

EMPOWERMENT

PAYS

The project is financed by a R770 000grant from Mykonos Casino andSaldanha Bay Municipality made theground available. The skatepark is to bedesigned and built by Clive Crofton whohas designed 20 skateparks over the last12 years. Crofton said that Langebaan’spark is to be a combination skatepark andplaza and it will be up to internationalstandards.

Apparently skate plazas are the latest ininternational trends. With handrails, banksand ledges, they reflect the street essenceof skateboarding. Skateparks feature halfpipes and designed ramps. Langebaan’spark will have a bit of both, said Crofton.There will be a 4-foot half pipe, bowl,double set stairs with handrail, curved andstraight ledges, wall rides and manualpads.

The park will suit all skateboarding levelsand styles, from easy for beginners tobeing fun for advanced skateboarders. Thepark will also include a small youth centre

with a hall, canteen, kiosk, outdoor eatingarea and ablution facilities.

Play together with the Langebaan BikerBoys and other role players have formed acommittee to drive the project. ChristieOosthuizen, project manager, said theyexpect to have the skatepark completed bymid-September and construction on theyouth centre will then commence. A datefor the official opening of the skateparkand centre has not been set, but it is hopedthat it will be up and running by December.

A management team will be appointed totake care of daily supervision at the parkand to ensure that no illegal activities suchas drug trafficking take place. A nominalfee will be asked for use of the skatepark.

In an eco-friendly touch, the plannedinstallation of a water tank for the collectionof rain water in turn will be used forsprinkling the lawn and garden areas.

In Vredenburg a similar project is hoping toget off the ground soon.

MYKONOS CASINO MAKESLANGEBAAN’S SKATEPARK A REALITY

Langebaan’s firstskatepark and youthcentre was officiallyannounced in July2009. What beganthree years ago as

Lynn Pearson of Play’s(Parents Lobbying for

Active Youth) littledream has resulted

in a R770 000 project that organisershope will set a trend

for similar youthprojects in surrounding

towns.

In 2006, 35 keen locals from the rural Amadibacommunity in the Eastern Cape were given the opportunityto be trained as tourist guides through a 12-monthregistered THETA course by the Esayidi FET College.

The Wild Coast Sun provided the trainingfacilities and assisted the students withnine months of practical experience inguiding tourists on the Wild Coast SunHeritage Beach Walk to the Petrified Forest.

In the end, 32 students qualified andreceived their Tour Guide certificates in2007. Three students, and residents of theMzamba community, were employed bylocal tour operator Mzamba Tours, whichalso heads up the Wild Coast Sun HeritageBeach Walks on behalf of Wild Coast Sun.

Nkosinathi (Bennie) Mbotho, lead tourguide at Mzamba Tours, and who

regularly guides the Wild Coast Sunvisitors to the fossil beds said “I am thankfulthat the hotel is so vigilant in protecting thefossil beds, as this has given the communityan opportunity to be part of the tourismindustry and promote small businessdevelopment in the area”.

As a young boy, Mbotho always enjoyedshowing people the natural beauties of hislocal community, including the beaches.More than 30 years later he is still asinspired by the mysteries and wonders ofthe area and shares his passion andknowledge with the guests of the resort.

Mysteries and wonders of the Wild Coast areainspiration for tour guides

20th Floor, 1 Thibault Square, Cape Town, 8001 • Tel: +2721 409 2460 • Fax: +2721 419 7271PAGE 8 I OCTOBER 2009 I ISSUE S IXTEEN

l e g a l W A T C H continued from page 4articulated the broad policy goals ofgovernment, but did not focus on how theoutcomes which it identified were to beachieved. This was left to the variousprovincial legislatures, which entered theterrain of gambling regulation with norelated expertise and, in many cases,relied on the experience of other moreseasoned international regulators. It wasgradually discovered, however, that acopy-and-paste approach to regulationfailed to meet the defining jurisdictionalcircumstances of the country itself, andthat South African solutions would haveto be devised to meet South Africanchallenges. Provincial gambling boards– quite rightly – sought to address thesechallenges as they developed therequired expertise. However, as thevarious boards developed at differentpaces, different priorities and fixedpolicies were formulated at differentjunctures, leading to disparateapproaches to key areas of regulation asbetween provinces. The subsequent thrusttowards greater uniformity andstandardisation has, to a large extent,eased fragmented provincialapproaches towards regulation,although certain challenges remain. Byway of example, in the context of broad-based BEE, the settled policy of thenational government, as set forth in theCodes of Good Practice, continues to besupplemented by various specificrequirements articulated by provincialgambling boards.

As Sawyer remarks, over-regulationshould consciously be avoided where

the objectives of the industry are topromote revenue generation and thestimulation of tourism. Over-regulationgenerally occurs where broad policy isoverlooked in favour of micro-management, or an excessive degreeof attention to procedural detail.Experience in South African has shownthat a risk-based approach toregulation is a key component ofeffective regulation as it enables theregulator to ensure ongoing focus – byregulatory officials and industry alike -on agreed industry objectives. Thisapproach also prevents uncritical,mechanical regulation, which does notmeasure industry performance againstdefined policy goals, and ensuresoptimal use of regulatory resources.Experience has shown that thoseprovinces whose regulation is based onrisk assessments, work-shopped withthe industry, have achieved the mostfocused regulation. However, there isroom for more self-regulation, at apurely procedural level, by licenceholders. In such a scenario, the role ofthe regulator would be to ensure thatthe licence holder addressesprocedural transgressions promptlyand appropriately, and to imposepenalties only when this is not done,rather than to penalise thetransgressions themselves.

In addition, while effective regulationclearly involves protection of the publicinterest, it is important to recognise thatthe public interest can be misconstrued– where gambling has been legalised

by government, moralobjections to gambling havebeen finally considered andshould not be confused withthe public interest, as oftenoccurs. Moreover, the public interestshould be advanced primarily throughongoing education, which research hasproven to be the key to informeddecision-making by the public, ratherthan by knee-jerk regulatory responses.

Effective regulation also recognises thatthe vulnerability of the gambling industryto criminal interference is largely afunction of the technological controlswhich are available and put in place andthat the available controls will thereforedictate the level of regulation required. Itis therefore of crucial importance thatindustry stakeholders provide regulatorswith adequate information as to thenature and effect of the technologicalcontrols in place.

Finally, effective regulation isirreconcilable with complacency. Itrequires continuous critical self-evaluation by regulatory authoritiesand the licensed industry alike. Theongoing development of a vibrantindustry brings with it new demands,which in turn must be communicated,understood and shaped into effectivepolicies based on a mutual goal – themaintenance of a credible andresponsible casino industry in SouthAfrica. While we have gone a longway towards creating an environmentfor effective regulation in South Africa,further improvement is always possible.

Starting his career as a slots attendant, Denver Adams has been in thecasino industry for the past nine years. Denver always knew he hadthe potential to go further, and within one year received a promotion tosenior floor attendant and shortly thereafter another promotion tosupervisor. He has attended several training courses which he says hasmade him a stronger more confident person. Denver currently holds theposition of casino duty manager at Mykonos Casino, and as he says “thebug has bitten”.

BITTEN BY THE BUG