At the beginning of October, the United Kingdom is expected to tighten the laws that govern its online gambling market. One of the new clauses of the UK Gambling Act is that any online gambling company that wants to serve UK players will need to have obtained a remote gambling license from the Gambling Commission. This is a big step away from current laws which allow UK facing companies to hold licenses from jurisdictions approved by the UK Gambling Commission – those that appeared on the Commission's 'white list' such as Gibraltar, Malta and the Isle of Man.
For the first time, big names in the industry such as William Hill and Ladbrokes will need to prove to the Gambling Commission that they are 'worthy' of a license and meet certain criteria.
With this in mind, how will Britain's new gambling laws affect South Africa?
Let's look at the 'criteria' mentioned. In order for an online gambling company to be eligible for a remote gambling license until Britain's new laws, it will have to make sure that no more than 3% of its revenues don't come from what is defined as 'grey' areas. In addition, they will need to prove why they are operating in these grey areas in the first place.
South Africa is a classic example of what the Commission would term as a 'grey' area. It means that the government is seriously considering the introduction of online gambling regulation and there is wide support for online gambling activities among the local South African population, however due to political considerations, government foot-dragging and other matters, there is no regulation of the industry just yet.
Other examples of grey areas are Australia and Russia.
According to online gambling analyst, Richard Richardson in an article he wrote recently on the subject: "It could be difficult to find a legal rationale for some popular markets (Australia, Russia and South Africa come to mind). There may be some legal wiggle room for other significant markets that lack a clear regulatory scheme for online gambling (think Canada, Germany and even Sweden, Finland or others in the EU)."
All eyes will be on the UK on October 1st, even from South Africa, as the news laws come into effect.