Provincial Gambling Board

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Physical: 31 MacDougall Street, Monument Heights, Kimberley 8301 Postal: Private Bag X6108, Kimberley, Northern Cape, 8301, South Africa Tel: +27 (0) 81 761 9101 Fax: +27 (0) 53 831 1483. The Limpopo Gambling Board is an equal opportunity and affirmative action employer and to this extent conducts targeted recruitment for previously disadvantaged individuals. The institution is established for the purpose of regulating gambling activities in the Limpopo Province. Post: Company Secretary. The Board is charged with receiving and investigating applications for licences pertaining to the various sectors of the gambling and betting industries in the Province, considering licence applications and exercising regulatory authority over the conduct of gambling and betting operations by all entities and persons licensed by it.You are here:SAFLII >> Databases >> South Africa: Supreme Court of Appeal >> 2019 >> [2019] ZASCA 116 | Noteup | LawCite KwaZulu-Natal Bookmakers’ Society and Another v Phumelela Gaming and Leisure Ltd and Others (889/2018) [2019] ZASCA 116; [2019] 4 All SA 652 (SCA) (19 September 2019) Download original filesLinks to summaryTHE SUPREME COURT OF APPEAL OF SOUTH AFRICAJUDGMENTReportableCase No: 889/2018
In the matter between:
KWAZULU-NATAL BOOKMAKERS’ SOCIETYFIRSTAPPELLANT
GAUTENG OFF-COURSE BOOKMAKERS’
ASSOCIATION SECOND APPELLANT
and
PHUMELELA GAMING AND LEISURE LTD FIRST RESPONDENT
KENILWORTH RACING (PTY) LTD SECOND RESPONDENT
GOLD CIRCLE (PTY) LTD THIRD RESPONDENT
GAUTENG GAMBLING BOARD FOURTH RESPONDENT
KWAZULU-NATAL GAMING AND BETTING BOARD FIFTH RESPONDENT
EASTERN CAPE GAMBLING AND BETTING BOARD SIXTH RESPONDENT
LIMPOPO GAMBLING BOARD SEVENTH RESPONDENT
NORTH WEST GAMBLING BOARD EIGHTH RESPONDENT
MPUMALANGA GAMBLING BOARD NINTH RESPONDENT
WESTERN CAPE GAMBLING BOARD TENTH RESPONDENT
FREE STATE GAMBLING AND LIQUOR BOARD ELEVENTH RESPONDENT
NORTHERN CAPE GAMBLING BOARD TWELFTH RESPONDENT
THE NATIONAL GAMBLING BOARD THIRTEENTH RESPONDENT
THE NATIONAL LOTTERIES BOARD FOURTEENTH RESPONDENT
GIDANI (PTY) LTD FIFTEENTH RESPONDENT Casino peak location.
ITHUBA HOLDINGS (PTY) LTD SIXTEENTH RESPONDENT
THE PREMIER, KWAZULU-NATAL SEVENTEENTH RESPONDENT
Neutral citation: KwaZulu-Natal Bookmakers’ Society v Phumelela Gaming and Leisure Ltd (889/2018) [2019] ZASCA 116 (19 September 2019)
Coram: Navsa, Tshiqi, Swain, Van der Merwe and Molemela JJA
Heard: 26 August 2019
Delivered: 19 September 2019
Summary:National Gambling Act 7 of 2004 – meaning of totalisator betting on sports – Lotteries Act 57 of 1997 – meaning of ‘sports pool’ – does not include totalisator betting on horse racing and other sports –provinces entitled to regulate and control totalisator betting on horse racing and other sports.ORDER

On appeal from:Gauteng Division of the High Court, Pretoria (Molopa-Sethosa J):
The appeal is dismissed with costs, such costs to include the costs of two counsel where employed.
JUDGMENT
Swain JA (Navsa, Tshiqi, Van der Merwe and Molemela JJA concurring):
[1]The issue to be decided in this appeal is whether bookmakers, in addition to their right to take bets on horse racing, possess thesole right to take bets on other sports, to the exclusion of totalisator operators, who are said to be confined to taking betson horse racing.
[2]The claim by the bookmakers is based upon the argument that totalisator betting on sports other than horse racing, falls withinthe definition of a ‘sports pool’ in s 1 of the Lotteries Act 57 of 1997 (the Lotteries Act). The first appellant, the KwaZulu-Natal Bookmakers’ Society, together with the second appellant, the Gauteng Off-Course Bookmakers’Association, being voluntary associations whose members hold bookmaker’s licences (hereafter collectively referred to as‘the bookmakers’), contend that on a proper interpretation of the Lotteries Act, the legislature has prohibited totalisator betting on sports other than horse racing in the absence of a sports pool licence, issuedin terms of the Lotteries Act.
[3]The first respondent, Phumelela Gaming and Leisure Ltd (Phumelela), the second respondent, Kenilworth Racing (Pty) Ltd (Kenilworth)and the third respondent Gold Circle (Pty) Ltd (Gold Circle), (hereafter collectively referred to as the ‘tote respondents’),operate totalisator betting in relation to horse racing and other sports events. Phumelela and Kenilworth maintain that they doso in accordance with licences to conduct and operate totalisators, issued to them by the relevant provincial Gambling Boards.It is not disputed that Gold Circle lawfully does so in KwaZulu-Natal, in terms of a totalisator licence, issued by the KwaZulu-NatalGaming and Betting Board in accordance with the KwaZulu-Natal Gaming and Betting Act 8 of 2010 (the KwaZulu Act).
[4]The bookmakers by way of application proceedings launched in the Gauteng Division of the High Court, Pretoria, challenged the validityof the licences held by Phumelela and Kenilworth, on the basis that the relevant provincial statutes did not authorise the holderof a totalisator licence to take bets on sporting events, other than horse racing. As regards Gold Circle, the appellants acceptedthat the KwaZulu Act did provide for such express authorisation, but submitted that the KwaZulu Act purported to deal with an areaover which a provincial legislature did not enjoy legislative competence. Joined as further respondents were the various provincialgambling boards, the National Gambling Board and the National Lotteries Board. Gidani (Pty) Ltd and Ithuba Holdings (Pty)Ltd were also joined as the first and second operators of the National Lottery, as was the Member of the Executive Council forFinance in KwaZulu-Natal (the MEC), who was responsible at the time the proceedings were instituted, for the administration ofgaming and betting in KwaZulu-Natal. The Premier of KwaZulu-Natal (the Premier), was subsequently substituted as the seventeenthrespondent, when he assumed responsibility for the portfolio.
[5]The relief sought by the bookmakers in the court a quo was the following:
(a) An order declaring that Phumelela and Kenilworth were unlawfully operating a totalisator sports betting operation in contraventionof their totalisator licences and/or the Lotteries Act.
(b) An interdict restraining Phumelela and Kenilworth from unlawfully operating a totalisator sports betting operation in contraventionof the Lotteries Act.
(c) An order directing the fourth to twelfth respondents, being the various provincial gambling boards, to the extent necessary,to take all appropriate steps to withdraw any permissions that may have been granted to Phumelela and Kenilworth and which unlawfullypurported to authorise the operation of totalisator sports betting operations.
(d) An order directing the tote respondents and the MEC (now the Premier) to pay the costs, jointly and severally, including thecosts of two counsel.
[6]Before the court a quo (Molopa-Sethosa J), the application was successfully opposed by the tote respondents and the Premier. Theapplication was dismissed on the ground that tote betting on horse racing and other sports, fell within the exclusionary clausein the definition of a ‘sports pool’, contained in the Lotteries Act. The court a quo rejected the bookmakers’ argument that in the absence of a sports pool licence issued in terms of the Lotteries Act, on a proper interpretation of the definition, the Lotteries Act had prohibited tote betting on sports other than horse racing. Central to this finding by the court a quo, was the fact that whenthe Lotteries Act was passed, Phumelela was ‘already offering totalisator betting in respect of sports such as soccer and rugby in terms of provinciallegislation’. The court a quo therefore decided that the purpose of the Lotteries Act in this regard, was not only to preserve the totalisator system of betting in respect of horse racing, but also in respect of allsports.
[7]However, the court a quo did not decide the central argument of the tote respondents, which is also advanced on appeal, that theLotteries Act does not apply to tote betting on sports, which is governed by the National Gambling Act 7 of 2004 (the National Gambling Act). The toterespondents submitted that the National Gambling Act expressly refers to tote betting and empowers provincial authorities to license tote betting on any event, or combination of events. Thetote respondents submitted that the provincial legislation does not limit tote betting to horse racing and consequently these statutesand the licences issued to the tote respondents, by the provincial gambling boards, permit totalisator betting on all sports. Theappeal is with the leave of the court a quo.
[8] Consequently, the first issue to be decided is the meaning of a ‘sports pool’ as defined in the Lotteries Act and the meaning of ‘totalisator betting’, in the National Gambling Act. Thereafter it must be decided whether totalisator betting on sports, other than horse racing, falls within the definition of a ‘sportspool’. In doing so, the correct approach to statutory interpretation as set out in Cool Ideas 1186 CC v Hubbard2014 (4) SA 474 (CC) para 28, must be followed;
‘[a] fundamental tenet of statutory interpretation is that the words in a statute must be given their ordinary grammatical meaning,unless to do so would result in an absurdity. There are three important interrelated riders to this general principle, namely:
(a) that statutory provisions should always be interpreted purposively;
(b) the relevant statutory provision must be properly contextualised; and
(c) all statutes must be construed consistently with the Constitution that is, where reasonably possible, legislative provisionsought to be interpreted to preserve their constitutional validity.’ (Footnotes omitted.)
[9] Gold Circle and the Premier submitted that the context in which the Lotteries Act and the National Gambling Act were passed must include a consideration of the legislation which had previously regulated gambling and wagering, as well as the constitutionalsetting. A consideration of this legislation is said to be of importance in determining the purpose of the Lotteries Act and the National Gambling Act, as well as the meaning of a sports pool in the Lotteries Act and totalisator betting in the National Gambling Act. They maintained that such an exercise makes it clear that totalisator betting has always been recognised as differing from sports pools.
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[10] Gold Circle submitted that the legalised forms of gambling are divided into two sections in terms of s 104(1)(b)(i), read with Schedule 4 of the Constitution. First, lotteries and sport pools that are regulated nationally in terms of the Lotteries Act by the National Lotteries Board and second, gambling, casinos and wagering (including all wagering on horse racing and sporting events)that are regulated concurrently at both the national and provincial level. This distinction is said to be reflected in the factthat totalisators of all kinds were regulated by the provinces and that the rights of the provinces and the totalisator operators,in relation to tote betting on sports, other than horse racing, existed before the passing of the Lotteries Act.
[11] In marked contrast, the approach of the bookmakers to the interpretation of what constitutes a ‘sports pool’ in theLotteries Act is linguistic, without regard being had to prior legislation regulating gambling and wagering. With regard to the significance ofthe Constitution, the bookmakers submitted that in terms of s 104(1)(b)(i), read with Schedule 4 of the Constitution, the power of provincial legislatures to pass legislation dealing with lotteries andsports pools, is precluded. The bookmakers therefore contended that it is incumbent on the court to interpret the legislation toconform to the Constitution, unless that interpretation was not reasonably open to the court. Accordingly, where a provincial statutemight be read so as to allow tote betting on sporting events other than horse racing, this should be read restrictively, so asto exclude it.
[12] In my view, a consideration of the prior national and provincial legislation, regulating gambling and wagering, is essentialto a proper interpretation of the definition of a ‘sports pool’, in the Lotteries Act. The legislative history of a statute may be used as an aid in its interpretation. As stated in Joosub Ltd v Ismail1953 (2) SA 461 (A) at 466 D, ‘The history of the sub-section may throw light on the proper construction of the words.’ The first actto be considered is the Gambling Act 51 of 1965 (the 1965 Gambling Act) which came into force on 1 July 1969, in terms of whichlotteries and sports pools were prohibited. A ‘lottery’ was defined as a scheme where a prize could be won by lot, diceor other method of chance and a ‘sports pool’ was defined as:
‘any scheme under which –
(a)any person is invited or undertakes to forecast the result of any sporting event or series or combination of sporting events (whetheror not in conjunction with any event other than a sporting event or series or combination of events other than sporting events)in competition with other participants; and
(b)a prize is to be awarded to the competitor who forecast the said result correctly or whose forecast is more nearly correct thanthe forecasts of other competitors, or a number of prizes are to be awarded on the basis of aforesaid,
and for the purposes of this definition the forecast of a result includes not only the forecast of the person or team that is tobe victorious or otherwise, but also any forecast relating to the system of scoring employed in the sporting event concerned, orto any person responsible for the score.’
[13] Gold Circle submitted that the key feature of a ‘sports pool’ as defined in the 1965 Gambling Act, was that itinvolved the awarding of prizes to competitors who were invited to make predictions about sports events in contrast to betting,whether totalisator betting or bookmaker betting, which required the staking of money and the receipt of the dividend based onthe amount staked, or pay-out based on the odds fixed. According to the Premier, of significance is that a sports pool did notinvolve the pooling of money and the award of a dividend but instead a prize, which did not bear any relation to amounts paid bythe competitors to participate. These distinguishing features between a sports pool and totalisator betting, were central to theargument of the tote respondents and the Premier, that the Lotteries Act does not apply to totalisator betting on sports, as this form of betting does not fall within the definition of a sports pool.
[14] Of significance in relation to the legislative competence of the provinces to control and regulate betting and wagering, wasa savings provision in s 10(a) of the 1965 Gambling Act, which provided that nothing in that Act restricted the powers conferred under paragraph 8 of the FirstSchedule, or paragraph 12 of the Second Schedule, to the Financial Relations Act 65 of 1976 (the Financial Relations Act). Theseschedules dealt with ‘[s]ources through which a provincial council could raise revenue and in respect of which it had powerto legislate either directly, or because such power had been transferred to the provinces by the President’.
[15] Paragraph 8 of the First Schedule to the Financial Relations Act gave power to provinces in respect of ‘[l]icensing oftotalisators and the imposition on the licensees of a duty in respect of the takings thereof; and licences, taxes and fees in connectionwith horse and other racing, betting and wagering, and the dissemination of information as to betting and wagering’. TheSecond Schedule dealt with ‘[m]atters the control of which and the power to legislate in respect of which may be transferredby the State President to a province’.
[16] Paragraph 12 of the Second Schedule to the Financial Relations Act permitted the devolution of control to provinces in respectof: Morongo casino high limit slots real money.
‘The restriction, regulation and control of horse racing, the prohibition, restriction, regulation and control of other racing andthe restriction, regulation and control of betting and wagering (whether as to circumstances, locality or premises), the prevention, control and regulation of the dissemination of information as to betting within the province and the licensingof any instrument, machine or contrivance, commonly known as a totalisator and the imposition of a duty in respect of the takingsthereof, upon the licensees.’(Emphasis added.)
The former provinces were therefore afforded the power to regulate and control betting and wagering, as to circumstances, localityor premises. I accordingly agree with the submission by Gold Circle, that despite the prohibition on a ‘sports pool’in the 1965 Gambling Act, the express reference to the Financial Relations Act in this Act made it clear that it was the provincesthat regulated betting and wagering, including totalisator betting and they could determine what forms of betting to licence, orto prohibit. In other words, the prohibition on a ‘sports pool’ should not be construed as impinging on the provincialpower to regulate totalisator and other betting in general.
[17] Prior to the passing of the 1965 Gambling Act and the Financial Relations Act in 1976, the former Province of Natal had in1957, promulgated the KwaZulu-Natal Regulation of Racing and Betting Ordinance 28 of 1957 (the Ordin

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