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[2010] ZAGPPHC 89
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Casino Enterprises (Pty) Limited (Swaziland) v Gauteng Gambling Board and Others (28704/04) [2010] ZAGPPHC 89; 2010 (6) SA 38 (GNP) ; [2011] 1 All SA 305 (GNP) (16 August 2010)
IN THE NORTH GAUTENG
HIGH COURT,
PRETORIA REPUBLIC
OF SOUTH AFRICA
CASE NO:
28704/04
DATE:16/08/2010
In the matter
between:
CASINO ENTERPRISES
(PTY) LIMITED (SWAZILAND) Plaintiff
and
GAUTENG GAMBLING
BOARD First Defendant
NATIONAL GAMBLING
BOARD Second Defendant
MINISTER OF TRADE
AND INDUSTRY Third Defendant
JUDGMENT
Introduction
1. The plaintiff
owns and operates a land based casino tn Swaziland. It also operates
an online
1
casino from Swaziland. It is licensed Under Swazt law to do so. This
case concerns its online casino operation.
2. The plaintiff
advertised its online casino through radio stations broadcasting in
the province of Gauteng. The first defendant
("the GGB")
warned the broadcasters to atop broadcasting the plaintiffs
advertisements. The GGB asserted that the plaintiff
was not licensed
to conduct a casino in Gauteng and that its internet casino operation
was thus conducted in contravention of S
77(1) of the Gauteng
Gambling Act 4 of 1995 ("the Provincial Act") and the
National Gambling Act 7 of 2004 ("the
National Act").
Section 77(1) reads, to the extant relevant:
No
person shall gamble at any place other than the licensed premises.
3. Representative of
the plaintiff and the GGB met and it became clear that the GGB took
the view that gambling through the plaintiffs
online casino takes
place where the player and his computer are situated. The plaintiff
took a contrary view, maintaining that
the gambling taKes place
solely in Swaziland because that is where its computer equipment
2
Is situated and where its online casino is licensed.
4. By notice of
motion dated 29 October 2004, the plaintiff launched an application
for orders declaring that to the extent that
gamblers in Gauteng
gamble on the plaintiffs online casinos in accordance with the
procedures specified by its expert Mr Verardi,
such gambling takes
place legally in Swaziland and not in Gauteng in any manner that
contravenes the Provincial Act and that any
advertising occurring in
Gauteng in respect of the plaintiffs "casino in Swaziland"
is not unlawful and does not constitute
a contravention of the
provisions of s71(1) of the Provincial Act. Mr Verardi, a lawyer
practising in the Isle of Man, explained
in one of the founding
affidavits put up by the plaintiff how the online casino worked. The
application was opposed by the GGB
and the NGB.
5. The plaintiff
does not hold any license under the Provincial or the National Act.
6. The application
was set down for hearing on 3 March 2006. At the plaintiff a request
it was referred to trial. This is the contemplated
trial, Mr Ginsburg
SC, Mr Dunne SC and Mr Miltz SC appear for the plaintiff. Mr Semenya
SC, Mr Maleka SC and Ms Nharmuravate appear
for the GGB and the NGB.
The Minister abides the decision of the court.
The pleadings
7. The plaintiff a
case as made in its declaration is that the gambling which takes
place "at the plaintiff's online casino"
does not take
place in Gauteng and is thus not required to be licensed under the
Provincial Act. Accordingly, so runs the declaration,
the provisions
of the Provincial Act prohibit neither any activities in Gauteng "at
and on the plaintiffs online casino"
nor the advertising of
those activities within Gauteng.
8. The plaintiff
claims further in its declaration that gambling “at the
plaintiffs online casino" is not an interactive
game as
contemplated by the National Act, does not take place within the
Republic of South Africa and is not unlawful under either
the
Provincial or the National Act. In the alternative.If any of these
propositions is decided against the plaintiff, the plaintiff
contends
that such interactive gaming is only made available in Swaziland and
not in Gauteng or anywhere else in the Republic in
any manner that
contravenes either the Provincial or the National Act.
9. Only the GGB has
delivered a plea. However, I was informed by counsel that the NGB has
made common cause with the GGB.
10. In the plea, the
GGB admits that it advised three named radio stations to desist from
advertising or distributing any information
concerning the
"plaintiff's online casino in Gauteng ...”. The GGB
further denies that the plaintiff's online operation
is such that
gambling does not take place within Gauteng. The GGB pleads that such
gambling can only take place lawfully if the
plaintiff holds a
license under the Provincial Act. The GGB places in issue the
questions whether the gambling activities which
take place pursuant
to the plaintiffs online casino operation constitute interactive
games and whether the plaintiffs online casino
operation is made
available to or engaged in by persons in Gauteng.
11. No replication
was delivered.
Issues for
determination
12. The main Issue
is whether and to what extent that which takes place when a player in
Gauteng interacts through the Internet
with the plaintiffs servers in
Swaziland constitutes gambling for the purposes of the Provincial Act
or the National Act. In What
follows, I shall postulate, as counsel
did, that the player is in Gauteng. Of course, because the Internet
is involved, the player
could be anywhere at all. Internet access is
available, from right next to the plaintiff's servers in Swaziland to
the other ends
of the earth.
13. Within that
enquiry, the question arises whether, to the extent that such
gambling does take place, such gambling takes place
in both Swaziland
and South Africa or only In Swaziland.
14. A further issue
which arises is whether, at a discretionary level, the declarators,
or any of them, should issue.
The evidence
15. Two witnesses
gave evidence before me: Professor Hazelhurst for the plaintiff and
Professor von Solms for the defendants. Both
men gave evidence as
experts. Both are highly qualified in the field of information
technology. In regard to all relevant matters
except one, with which
I shall deal separately, they are in agreement on the evidential
material that I need to decide this case.
They sometimes used
different terminology and emphasised different aspects but not to the
event that I need to resolve any disputes
between them.
16 .In a room in
Swaziland, the plaintiff maintains and operates several servers which
are connected to the Internet. The plaintiff
makes available to an
aspirant player, on application, a suite of software
3
which the aspirant loads on to his own electronic device
4
which, forth the purposes of this enquiry, is physically located at
the aspirant's home in Gauteng.
17. After loading
the plaintiffs software, the aspirant connects over the Internet to
the plaintiffs servers in Swaziland. The aspirant
can read the
following messages on the plaintiffs webpages:
"Getting
started
Register an account
today and begin your journey of gaming pleasure. In just a few easy
steps you can start playing all your favourite
casino games from the
comfort of your own home."
and
"How to play
online slots
Imagine being able
to enjoy all your favorite [sic] slot machine games in your own
personal cozy abode where you can just relax
and be at home."
18. The aspirant
then registers an account with the plaintiff. For this purpose he or
she obtains a unique username and password
and a "wallet".
This wallet is an electronic account with the plaintiff, into which
the aspirant transfers money in the
form of SA rands
5
.
At this stage the aspirant is in a position to become a player, if
the aspirant chooses not to wager any money but merely to play
the
online games accessible through the plaintiffs servers, or a gambler.
This trial concerns the gambler so l shall use that term
to refer to
the person in Gautang who has chosen to gamble through the facilities
made available by the plaintiff.
19. The gambler
chooses the online casino option and the software on the gambler's
device, displays a screen where the gambler makes
certain choices,
using a mouse or other pointing device. The first of these choices is
the game to be played.
20. When the game
has been selected, a screen appears with graphics approximating the
visual appearance of the game as it would
appear in the real (as
opposed to virtual) world. In the example shown by Prof Hazelhurst in
court, the game was a slot machine
but the principle applies to any
casino game made available by the plaintiff, including roulette.
21. The gambler then
selects the stake to be wagered per payline and the number of
paylines selected. So, If the gambler wages R3
and chooses three
payllnes, the total bet will be R9.
22. The gambler then
positions his mouse on the simulation of a button on the screen
marked "SPIN" and "presses"
the button, usually
by leftclicklng the mouse
6
.The
gambler's computer begins to display spinning wheels or whatever is
best suited to simulate the operation of the gambling device
in the
real life situation. This simulation continues, provided there is no
system or connection failure, until the result is reported
to the
gambler as I shall describe below.
23. Upon the
activation of the spin button, a packet of data is transmitted over
the internet to the plaintiff's servers in Swaziland
where the data
are validated to establish, amongst other things; that they have been
sent from the specific gambler in question
and that the gambler has
sufficient funds in his wallet to fund the bet. What follows
describes what happens when there are sufficient
funds.
24.The game is then
further played according to the rules of the game on one of the
plaintiffs servers called the game server: Via
a connection with an
electronic device in Swaziland called a pseudo-random number
generator, which introduces the factor of chance
into the game, a set
of numbers applicable to the wager is identified. The result of the
wager is then recorded in the database
server, the balance in the
gambler's wallet is updated to reflect the result of the wager and
the updated balance is retrieved.
25. The confirmed
game result and the updated balance are then, again provided there is
no system or connection failure, sent over
the Internet to the
player's computer where the simulated wheals or other gambling device
stop moving and the results are displayed.
That is the end of the
game.
The dispute
between the experts
26. I have mentioned
above that there is one matter upon which the experts are not in
agreement.This is about whether the game as
a whole could properly
within their academic discipline be described as an atomic unit of
work, ie one in which either the entire
transaction takes place or,
in electronic terms, no transaction takes place at all.
27. Prof Van Soirna
thinks that the game as a whole, from the moment that the gambler
begins making his or her choices to the moment
the reported result
becomes visible on the gambler's video device, is an atomic unit of
work.
28. Prof Hazelhurst
says that on an academically rigorous analysis, what takes place in
Gauteng both before and after the plaintiffs
servers in Swaziland are
engaged, is not part of an atomic unit of work because none of this
has any effect on what happens in
Swaziland. Prof Hazelhurst points
out that the result would be the same whether or not the result is
reported to the gambler. It
therefore follows, Prof Hazelhurst
reasons, that the electronic actions in Swaziland are an integral
atomic unit of work discrete
from what preceded and what followed
these actions in Gauteng.
29. The evidence
hardly qualifies me to take sides in this dispute. I point out only
that it seems from an extract from a reputable
work handed up by
counsel tor the defendants
7
that the notion of an atomic unit of work can for academic purposes
legitimately be used both as Prof von Solms and as Prof Hazelhurst
did. I suppose that it should be made clear in each case whether the
term is being used in the narrow technical sense or in the
wider
sense, described by counsel for the plaintiff, somewhat pejoratively,
as the philosophical sense.
30. So I think that
the dispute between the experts is not one of substance in the
context of this case. Whatever labels the experts
give to the
electronic transactions involved:
30.1 the game starts
when the gambler in Gauteng communicates his selections to the
plaintiffs servers and ends when the results
of the game are reported
to the gambler in Gauteng; and
30.2 the operation
of the electronic equivalent of the gambling device
8
on which the outcome of the wager is decided (analogous to the
roulette wheel) takes place solely in Swaziland.
31.The question I
must determine is whether any of what happens in Gauteng is hit by
the legislation in question.
Evaluation
32 The following
actions take place in Gauteng:
32.1 The software,
which is to be loaded onto the gambler's device to enable access to
the plaintiffs servers, is made available;
32.2 The gambler
takes and implements the decisions to load the software, put funds
into the wallet, select the game and stake and
press the spin button;
32.3 The gambler
receives the results of the game.
33. Counsel for the
plaintiffs submitted that the Provincial Act does not deal at all
with electronic gambling. I agree. Under the
provincial statute,
gambling within the province may only take place at licensed
premises.
34. Gambling is
defined in s 1, the definition section of the Provincial Act, to
mean;
The wagering of
stake of money or anything of value on the unknown result of a future
event at the risk of losing all or a portion
thereof for the sake of
a return, Irrespective of whether any measure of skill is involved or
not and encompasses all forms of
gaming
9
and betting, out excludes [two types of machine not relevant to this
enquiry].
35. "Licensed
premises" means the place or premises specified on a license. As
I have mentioned, no person may gamble
except at licensed premises.
10
Furthermore, only gambling on the result of an event or continency in
a casino game, bingo game or gambling machine is permitted
and no
person may gamble on the result of such an event or contingency with
any unlicensed person.
11
The Provincial Act thus envisages only gambling which takes place at
a real world location, between the gambler and the holder
of a
license
12
and within a casino or bingo game or through a gambling machine. As
the Provincial Act stands, therefore, any gambling, as defined,
within the province which takes place at a location which is not
licensed premises as defined, or takes place between the gambler
and
a person other than the holder of a license, is unlawful.
36. It therefore
follows that if what I have identified as taking place in Gauteng
constitutes gambling as defined, such actions
are unlawful.
37. Gambling as
defined "encompasses all forms of gaming". Gaming means
"the playing of a casino game". A casino
game means any
game played with any device used to determine win or loss in the
outcome of a wager for money.
38. Neither “garne”
in its noun or verb sense nor the verb "to play" is
defined, l shall identify their ordinary
meanings by reference to
dictionary definitions.
13
In its present day meaning, counsel for the plaintiffs accepted, a
"game" for present purposes is a diversion in the
nature of
a contest, played according to rules and displaying in the result the
superiority either in skill, strength, or good
fortune of the winner
or winners. The most appropriate meaning of the verb "to play"
in the present context is in my
view to employ oneself or engage in a
game. It is interesting to note that the verb "to gamble"
derives from words in
ancient languages carrying the meaning of
playing or gambolling or taking part in a diversion.
39. So in my
judgment, on the clear language of the Provincial Act, the gambler on
the plaintiffs online casino is playing, in Gauteng,
one of the games
offered by the plaintiff. That, under the Provincial Act, the player
may not do because the gambler is not at
licensed premises when he or
she does so and because the gambler is not gambling with a person who
is the holder of a license.
40. Counsel for the
plaintiff submit that this conclusion would be wrong. They point out
that it was formally agreed before the
trial that the Provincial and
National Acts do not have extra-territorial application and contend
that the legislature could not
have intended the clear language I
have mentioned to have the effect I have described because a finding
that the Provincial Act
(to limit the enquiry for the moment to that
enactment) has such an effect would offend against the presumption,
based on the principle
of comity between nations, that statutes are
presumed not to operate extra-territorialiy. The intention of the
legislature in relation
to the Provincial Act, it was argued, was to
limit that reach of the statute only to gambling where all the
participants in the
game are playing it in Gauteng. The gambler's
involvement, so runs the submission, is an "Insignificant
portion of the entire
gambling process"
14
which does not create a real and
substantial link
from a jurisdictional perspective as that concept la used in
international law.
41. I do not agree,
I am mindful, as counsel for the plaintiff said I should be, of the
risks of an interpretative approach that
pays too much attention to
the ordinary language of the words in a statute and that I should
employ a purposive approach to statutory
Interpretation.
42. The purposes of
the Provincial Act and the National Act can be established from their
respective preambles. The purposes are
broadly similar.
43. The preamble to
the Provincial Act reads:
whereas
gambling and betting have the potential to make a substantial and
lasting contribution to the growth and development of
tourism and the
economy in the Province of Gauteng, and to the prosperity of its
people: AND whereas it is recognised that gambling
and betting are
privileged activities which should stimulate the creation of
employment opportunities and assist in the advancement
of deprived
communities, and thereby promote the improvement of the quality end
standard of living of the people of the Province;
AND
WHEREAS gambling and betting can be a significant source of public
revenue for the Province, and so contribute to the well-being
of all
its people In the general interest;
AND
WHEREAS the special risks and dangers entailed by Opportunities for
gambling and betting justify the imposition of appropriate
restrictions, regulations and controls
44. The preamble to
the National Act reads:
CONSIDERING that the
Constitution of the Republic of South Africa, 1996 (Act 106 of 1996),
establishes that casinos, racing, gambling
and wagering are matters
of concurrent national and provincial legislative competence; It is
desirable to co-ordinate ectivities
relating to the exercise of that
concurrent competence within the national and provincial spheres of
government;
It is desirable to
establish certain uniform norms and standards, which will safeguard
people participating in gambling and their
communities against the
adverse effect of gambling, applying generally throughout the
Republic With regard to casinos, racing,
gambling and wagering, so
that-
gambling
activities are effectively regulated, licenced, controlled and
policed;
members of the
public who participate in any licenced gambling activity are
protected;
society and
the economy are protected against over-stimulation of the latent
demand for gambling; and
the licensing
of gambling activities Is transparent, fair and equitable;
It is expedient to
establish certain national institutions, and to recognise the
establishment of provincial institutions, which
together will
determine and administer national gambling policy in a co-operative,
coherent and efficient manner.
45. The statutes
reflected a profound change in legislative policy. Before the
enactment of the interim Constitution of 1893, no
industry of casino
gambling and no lotteries existed in South Africa as then
geographically constituted because these activities
were prohibited
under the Gambling Act, 51 of 1965. Only after the Interim
Constitution and of course the final Constitution made
provision for
these activities from a fiscal perspective, were provincial and
national statutes enacted which legitimised and regulated
the
gambling industry by way of licenses and otherwise.
46.The preambles
recognise certain benefits and dangers which the legislatures regard
as inherent in the gambling activity. The
industry is held to have
the potential to contribute to tourism and thus promote the economy.
No doubt legislative policy holds
that many tourists like to gamble
when they are on holiday and that for many people, tourists and
otherwise, gambling represents
a pleasant and exciting recreational
activity. In the policy view taken by the legislature, the
establishment of regulated and
strategically placed gambling
establishments can promote the advancement of deprived communities
and thus improve the quality of
life of members of such communities,
the vast majority of whom were disadvantaged by the
pre-Constitutional dispensation. And finally,
on the positive side,
the creation of a well regulated gambling industry can be a
significant source of public revenue.
47. The legislatures
also recognised certain negative aspects attendant upon the
establishment of a gambling industry. One of these
was manifestly the
undesirability of allowing unlicensed, and thus unregulated, industry
operators to compete, probably at a cost
advantage in regard to
infrastructure and taxation, with industry operators which had spent
large sums of money to get the necessary
licenses to enter the
market.
48. Another negative
aspect, to my mind of the greatest importance, is the risk posed by
gambling to vulnerable individuals and,
by extension, their families.
This risk is expressly recognised in the fourth paragraph of the
preamble to the Provincial Act and
in the third asterisk point In the
third paragraph of the preamble to the National Act. For certain
susceptible individuals, the
gambling experience is addictive. Many
losers do not know when to stop. Such individuals and their families
can face ruin through
their propensity to gamble money they cannot
afford to lose.
49. The South
African gambling market is finite, it would be subversive of their
own declared purposes for the legislatures to allow
a foreign
organisation to benefit from the local gambling market without fiscal
compensation, whether in the form of licenses,
infrastructure, job
creation or otherwise.
50. In coming to
this conclusion, I do not overlook the high value our Constitution
places on personal privacy, which would include
the right to engage
in recreational activities. As was pointed out in Investigating
Directorate; Serious Economic Offences and
Others v Hyundai Motor
Distributors (Pty) Ltd and Others; in Re Hyundai Motor Distributors
(Pty) Ltd and Others v Smit NO and Others
15
,
the right to privacy lies upon a continuum. The more a person moves
from his or her innermost core and interacts with other people,
the
more the right to privacy is attenuated. To restrict gambling to
licensed premises or to regulate the conduct of persons who
gamble
from within their own homes on a basis broadly equivalent to the
regulation of the conduct of persons who travel to licensed
premises
to enjoy the gambling experience seem to me legitimate legislative
choi ces which, moreover, are entirely appropriate
given the clear
purposes of the Provincial and the National Acts.
51. The
vulnerabilities of individuals and the risk of harm to their families
ere if anything greater where the gambling takes place
in a private
home rather than in a public place, where limitations on reckless
gambling and access, eg by children and other vulnerable
persons, can
be prevented or regulated. The Provincial legislature has exercised a
dear policy choice against the enjoyment of
the casino experience
from, to use the language on the plaintiffs webpages, the gambler's
personal cozy abode where the gambler
can just relax and be at home.
52 . In my judgment,
the legislatures did not seek to restrict the extent of their fiscal
and regulatory net. They Intended to cast
it as widely as possible.
53. In Otherchoice
(Pty) Ltd v Independent Communications Authority of SA and Another,
TPD case no 19718703, unreported, a judgment
delivered on 21 April
2006, at pp8-9, the court approved the following dictum in Treacy v
Director of Public Prosecutions
[1971] AC 537
HL 564E;
The rules of
International comity... do not call for more than that each sovereign
state should refrain from punishing persons for
their conduct within
the territory of another sovereign state where that conduct has no
harmful consequences within the territory
of the state which imposes
the punishment [my emphasis].
54. I respectfully
agree. The harmful consequences in the present context include the
unregulated access to gambling, the movement
of money out of South
Africa with no concomitant local benefit and the potential loss of
revenue from taxation and from license
fees. On the construction of
the Provincial Act contended for by the defendant the legislature is
not seeking to legislate extra-territorially
but to regulate the
conduct of persons physically within Gauteng and the consequences of
the plaintiffs actions whithin the province.
55. Counsel for the
plaintiff referred me to the doctoral thesis of Dr Michelle Geissler
titled Bulk unsolicited electronic messages
(spam) a South African
Perspective. The author concludes that the mere uploading of data
onto the Internet ought not to confer
jurisdiction on a state merely
because such data were downloadable in the state in question. The
author observes:
This is absurd
because it makes all of cyberspace subject to the law of the state.
If every state adopted this approach, the result
would be that every
conceivable body of law would govern Internet-related activities.
56. At the level of
principle, I do not agree. The question of jurisdiction is
determined, in South Africa at any rate, by reference
to South
African law.If under our law our courts have jurisdiction, no
absurdity arises, regardless of whether another state may
also claim
jurisdiction.
57. I also do not
agree with the submission that the issue should be decided by
reference to the significance of the actions which
take place in the
province. The Provincial Act proscribes those acts which it
characterises as gambling. If those acts are committed,
they are
illegal. This is so whether or not they are part of a course of
conduct in which other acts do not constitute gambling
for the
purposes of the Provincial Act, no matter how significant those other
acts are in the context of the course of conduct
as a whole.
58. In my view the
conduct which takes place in Gauteng cannot be described as
insignificant. The decision to play the game at all
is made in
Gauteng and the act of communicating that decision to the plaintiff
is performed in Gauteng. Although the result of
the game stands after
it has been determined in Swaziland, whether or not it has been
reported to the gambler, the rules of the
game require that it be so
reported. It is crucial to the gambling experience that the player
knows the result.
59.Gambling of this
type is not a game in which it matters not whether you won or lost
but how you played the game.
16
Winning is the predominant purpose of the game. A gambler who is
losing and who continues playing does so in the hope that his
or her
luck will change. So the process by which the result of the game is
reported to the gambler in Gauteng, far from being insignificant,
is
of the greatest importance. If the result were not barring accidents,
reported immediately, it would be most unlikely that gamblers
would
continue playing.
60. Counsel for the
plaintiff placed reliance on Bishop and Others v Conrath and Another
1947 2 SA 800
T 803 and 804. In that case a syndicate had been formed
in the Transvaal to send money from South Africa to Rhodesia with
which
to buy, in the name of one of the syndicate members, tickets in
the Rhodeaian State Lottery to be drawn on the Durban July Handicap.
One of the tickets drew the winning horse. The syndicate member
received the prize money into his bank account in Johannesburg.
After
his death, his executrix refused to pay out to the other members of
the syndicate on the ground that under s 1(c) of Law
7 of 1890 of the
Zuid-Afrikaanse Republlek
17
,
participation in any lottery, wheresoever conducted, was unlawful. On
exception, the court found that, on a proper construction
of the
section, what was prohibited was the taking or purchase of a ticket
or the acquiring of a share in a tickat where the positive
act of
taking, buying or acquiring took place in the old Transvaal.
61. I do not think
Bishop's case helps the plaintiff. The question is statute specific:
what conduct does the statute in question
proscribe? In my view, as I
have said, the Provincial Act does indeed proscribe gambling in
Gauteng other than at licensed premises.
62. Counsel for the
plaintiff also referred me to the dictum in S v Bssson
2007 3 SA 582
para 237, that it would be against the comity owed to a foreign
country for a South African court to punish a person for a conspiracy
to commit acts which can lawfully be committed in that foreign
country. I do not think that this dictum is in point what is under
attack is not the decision to gamble (analogous to the conspiracy to
commit a certain act which would be criminal if committed
in South
Africa) but the implementation of that decision (analogous to the
execution of that criminal act).
63. These
conclusions are decisive because the context in which the present
case arose is that the plaintiff objected to the stance
taken by the
GGB in relation to the plaintiff's advertising on radio stations
broadcasting from Gauteng. The GGB told the radio
stations that in
its view the radio stations could not, lawfully, advertise or
distribute any information concerning the plaintiffs
online casino
within the province of Gauteng. In my view the GGB got it right The
radio stations could not lawfully do so because
persons in Gauteng
interacting with the plaintiff's online casino are engaged in
gambling in the Province
18
in respect of which a license is not in force.
64. I shall
nevertheless give my views on the questions which the parties
addressed in relation to s 11 read with ss 5(1)(a)(i)
and (ii) of the
National Act because these questions were fully argued, Section 11
reads:
A person must not
engage in or make available an interactive game except as authorised
in terms of this Act or any other national
law.
Section 5(1 )(a)
read:
An activity is a
gambling game if-
(a) It meets the
following criteria:
(i) It is played
upon payment of any consideration with the chance that the person
playing the game might become entitled to,
or receive a pay-out; and
(ii) the result
might be determined by the skill of the player, the element of
chance, or both;...
65. Counsel for the
plaintiff submitted that s 11 of the National Act was not engaged
because gambling at the plaintiff's online
casino was not an
interactive game as contemplated by the National Act. The argument is
that an interactive game, as defined, is
only one where both the
gambler and the casino are physically situated with South Africa's,
territorial borders. Counsel point
to the different elements of the
definition of "interactive game", particularly in relation
to the elements of the game
identified in s 5(1)(a)(i) and (ii) which
I shall call the critical elements.
19
If the critical elements are not to be found physically within South
Africa, counsel submit, the game is not an interactive game
as
defined. I do not agree.
66. In my view the
flaw in the argument is the following: the critical elements identify
a game which is a gambling game. Once the
critical elements exist,
the game in question is a gambling game and thus, for present
purposes, an interactive game. Section 11
does not merely prohibit
engaging in or making available the critical elements. The section
prohibits engaging in or making available
the game as a whole, it
matters not in my view whether the critical elements are to be found
or are generated within the borders
of South Africa or not Section 11
proscribes in my view both engaging in the game, which happens each
time a garnbler presses the
spin button, and making available the
game, which takes place at least when the plaintiffs servers in
Swaziland make it possible
for the gambler in Gauteng to connect
interactively with them though the Internet.
20
67. I agree with
counsel for the defendants that in using the terms "engage in"
and "make available" the legislature
was using simple
non-technical language. I am fortified in my conclusion by the
statements of the plaintiff itself on its webpages
to describe what
it offers through its online casino.
Costs
68. Neither side
asked for costs against the other.
Conclusion and
orde
r
69. It follows that
the plaintiff's action cannot succeed. The plaintiff's claims are
dismissed.
NB Tuchten
Judge of the High
Court
16 August 2010
For plaintiff;
Mr P Ginsburg SCt Mr
EW Dunne SC and Mr / Miltz SC instructed by Hack, Stupel & Ross
For defendants:
Mr AM Semenya SC, Mr
IV Maleka SC and Ms N Nharmuravate instructed by Mdlulwa Nkuhlu Inc
1
In
many instances in the documents placed before me, this word is
written as online, For uniformity. I omit the hyphen when quoting
from these documents.
2
Called “servers” in the evidence.
3
Either
by delivering to him or her a storage device from which the software
may be extracted or by transmitting the software over
the Internet
4
Usually
a desktop or a laptop computer but may be any electronic device
capable of connecting to the Internet and loading the
plaintiffs
software
5
Because
Swaziland and South Africa are members of the Common Monetary area
6
This
moment was described by Prof Hazelhurst as the point of no return
because from then on, the gambler has no control over the
game
7
Bernstein
and Newcomer.
Principles
ot Transaction Processing for the Systems Professional,
1997
ed
at
pp2-3.
8
Under
the Provincial Act. a gambling device" means any equipment
or
thing
used in connection with gambling... Under the National Act. a
"gambling device" means equipment or any olher thing
that
is used
in
determining
the result
of
a
gambling activity.
9
Gaming
is defined m the same section to mean the playing of a casino game.
A casino game is also defined . A casino game is any
game ...' (my
emphasis).
10
Section 77(1).
11
Section 76(1) and (2)
12
A license" is one contemplated under the Provincial Act.
13
I
consulted the Oxford
English
Dictionary,
2nd
ed. 1989
14
I
quote from para
11
of
the plantiff's heads of argument
15
2001
1 SA 545
CC paras 15 and 16. following
Bernstein
and Others v Bester and Others NNO
[1996] ZACC 2
;
1996
2 SA 751
CC
16
To
perpetuate the common misquotation from the poem
Alumnus
Football
by
Henry Grantland Rice
17
"Any
person who whether personally or through a representative
authorised by him, takes or buys any ticket in a lottery
or has any
share therein shall be guilty of a contravention of this Law"
(my translation)
18
In the sense that phrase is used in
Casino
Enterprises (Pty) Ltd (Swaziland) v The
Gauteng
Gambling Board
[2008]
ZASCA 31
para 16
19
The argument accepted that the evidence showed that the other
elements of the definition of "interactive game' were present.
20
l do not find it necessary to decide whether the plaintiff makes the
game available when it provides the aspirant gambler with
the
necessary software