The entire South African Gambling Board has been suspended for being an alleged hotbed of corruption, mismanagement and wasteful spending, according to the country’s trade and industry minister, Rob Davies.
Davies relieved the National Gambling Board of South Africa (NGB) of its authority last month, although the reasons for the move were not made clear until last Friday, when the minister explained his decision in a letter to Parliament’s Trade and Industry Portfolio Committee.
Among the allegations against the members of the board, each of whom are personally appointed by Davies, is the failure to “prevent irregular, fruitless and wasteful expenditure, and making overdraft on the entity’s bank account without the approval of the minister of finance.”
According to Democratic Alliance Member of Parliament Dean Macpherson, board members had allegedly “increased their own remuneration by a staggering 46 percent in the 2013/14 period.” The regulatory body spent R2.7 million, or almost $250,000, on travel over the course of the year, including more than $150,000 while attending a conference in Norway.
We didn’t know there was even that much fun to be had in Norway.
Furthermore, the board, “acting either individually or jointly,” had allowed “members whose term of office had expired to continue participating in the board’s activities and representing the NGB,” a breach of the National Gambling Act. The alleged indiscretions were brought to the minister’s attention by the Auditor General.
However, Davies told the committee that he had also received a tip-off from a whistleblower who disclosed “alleged corrupt activities regarding the National Central Electronic Monitoring System” and the “unlawful appointments of staff.” The whistleblower had also revealed a culture of what the minister described, oddly, as “intimidation/bullying/disregard of constitution/witch-hunt”, as well as alleged “theft of evidential material.”
Davies said the suspensions were “cautionary” pending a “forensic investigation” into the allegations. “[This] will mainly cover the assets of the National Gambling Board, and the minister has also appointed two administrators to oversee the day to day assess of the National Gambling Board,” said a spokesperson. “We are able to say how long this will take.” [sic]
The opposition Democratic Alliance said it would be asking Parliament when the investigation is likely to be completed and would demand that criminal charges are brought against anyone who has acted illegally.
South Africa’s Gambling Landscape
South Africa has a thriving land-based casino market, with resorts like Sol Kerzer’s Sun City; a mammoth resort that was actually declared an independent state during the apartheid regime (a concession that allowed it to hold topless revue shows that were banned elsewhere in South Africa). Gross gambling revenue for 2013-14 was $1.9 billion for the entire country, with over 75 percent of that coming from the land-based casino industry, and the government benefited from $190 million in tax revenue.
While sports betting is the only form of online gambling that is currently legal in South Africa, the Trade and Industry Portfolio Committee is currently mulling over a draft gambling bill that would completely open up the market, allowing provincial licensing authorities to issue as many remote gambling licenses as they wish. However, with the apparent intransigence of the ruling ANC on the issue, and the entire gambling commission suspended, don’t expect this to happen anytime soon.