gambling and the lottery

gambling and the lottery chapter six HOUSE: THE NATIONAL ASSEMBLY MEDIUM: ORAL MEMBER: MR. B G BELL (DP) LIMITED PAYOUT MACHINES QUESTION: 285 Whether, with reference to his reply to Question No 845 on 23 July 2001, licences for limited payment machines have been issued; if not, why not; if so, (a) how many licences have been issued by each province and (b) what revenue is anticipated from the operation of these limited payment machines; (1) Whether the central monitoring system is in place; if not, why not; if so, what are the relevant details; (2) Whether he will make a statement on the matter? The Mpumalanga Gambling Board has granted and issued 6 licenses to route operators. On 19 September 2002 this Board granted 300 site licenses in the first phase. The revenue expected from the application and license fees from this phase will be R500 000 and once the machines are operational the Board will collect 11% of the total turnover, which is expected to be R2.4 million. No licences have been issued in the Eastern Cape. The Gambling Board in the Eastern Cape will be considering Request For Proposals (RFP) on 30 September 2002, which will invite interested parties to apply for licenses for 2000 limited payout machines. No licenses have been issued in the Free State. The Free State Gambling Board is in the process of stakeholder consultation and will publish an RFP in November 2002 inviting interested parties to apply for 1500 limited payout machines licenses. No licenses have been issued in Gauteng. The Department of Finance and Economic Affairs, in conjunction with the Gauteng Gambling Board, is currently conducting a socio-economic impact study of gambling in the province and once this is finished the Gauteng Gambling Board will consider its position on the licensing of limited payout machines. No licenses have been issued in the Western Cape. The reason advanced by the Western Cape Gambling Board is that there is insufficient clarity on the legal framework within which the industry is going to operate. The Board intends to go out with its RFP once clarity in that regard has been obtained. In the Northern Cape, Limpopo and the North West Province, no licenses have been issued. The Gambling Boards in these provinces are currently engaged in stakeholder consultations and will publish their RFPs once the process is over and invite interested parties to apply for the limited payout machine licenses in their respective jurisdictions. In KwaZulu-Natal no licenses have been issued. There are discussions (Section 41) with the relevant players in this province regarding the issuing of licenses. Finality on the limited payout machines in this province will depend on the outcome of those discussions. (b) Revenue is dependent upon the number of machines in operation and the volume of wagering on these machines. Provincial gambling taxes are levied at various rates on the gross gambling revenue of an operator. The anticipated annual revenue based on the licensing and operation of all limited payout machines allocated to provinces is estimated as follows: the gross gambling revenue of operators at R2.8 billion and the provincial gambling taxes at R396 million. 78 Central Electronic Monitoring System for all gambling machines outside casinos. (2) During December 2000, I issued national regulations in terms of Regulation Gazette No. 6977 dated 21 December 2000. Regulation 8, under the heading “Central Electronic Monitoring System”, reads as follows: “8[1] The central electronic monitoring system referred to in section 13[1][l] of the act must comply with the standards from time to time laid down by the South African Bureau of Standards and must be approved by the Board. [2] A single central electronic monitoring system shall be operated by a person appointed on the terms and conditions as laid down by the Board after consultation with the Minister”. Pursuant, again, to these provisions, I, in consultation with the National Gambling Board, embarked upon a major project at a cost, of some R5 million, to identify a national CEMS operator. The tender was finally awarded to Zonke Monitoring Systems (Pty) Ltd (“Zonke”) The National Gambling Board on 14 December 2001 signed a Service Level Contract with Zonke, which inter alia, provided that Zonke was to be the operator of the Central Electronic Monitoring System on behalf of the National Gambling Board. In terms of section 13(1)(l) of the National Gambling Act 1996, Act No. 33 of 1996, all gambling machines outside casinos shall be linked to a central electronic monitoring system for the purpose of the monitoring and detection of significant events associated with each gambling machine. During June/July 2001, the premier of KwaZulu-Natal (KZN) indicated that his province would not participate in the implementation of the activities of a national CEMS operator but would employ its own provincial electronic monitoring system. [Further details omitted as timebound.] Zonke will commence operating and going live with the Central Electronic Monitoring System in Mpumalanga on 02 December 2002 where limited payout machine licenses have been issued as indicated earlier in my reply to the first question. (3) The Minister of Trade and Industry will not be making a statement in this regard. LOTTERY RECIPIENTS: ANIMAL WELFARE ORGANISATIONS HOUSE: THE NATIONAL COUNCIL OF PROVINCES MEDIUM: WRITTEN MEMBER: MS C-S BOTHA (NNP) 1. Whether current legislation and regulations make provision for animal welfare organisations to benefit from the national lottery; if not, why not; if so, under which category are animal welfare applications considered; 2. Whether any applications have been received from animal welfare groups, if so, what are the relevant details? 3. Whether any national lottery funds have been allocated to animal welfare groups; if not, why not; if so, what amount? 1. Current legislation does not make provision for any specific beneficiary. Five broad categories are identified in the Lotteries Act and these include Charities, Miscellaneous Purposes and Sport and Recreation. Qualifying criteria are identified by the publicly nominated Distributing Agency Members. 79 Any organisation wanting to apply for funding has to meet with the criteria as stipulated in the regulations. The applications must have been submitted by the deadline. 2. Applications have been received from animal welfare groups. Their applications will be “Their applications will be adjudicated and if they meet the requirements laid down, they will qualify adjudicated and if they meet the requirements laid down, they will qualify for funding. The requirements include the following: • The organisation must be able to demonstrate sound financial management; • The organisation must be able to show a clear and urgent need for lottery funding; • The organisation contributes to general development in the country. for funding.” HOUSE: THE NATIONAL ASSEMBLY MEDIUM: WRITTEN MEMBER: MS C-S BOTHA (NNP) PAYMENTS MADE TO ANIMAL WELFARE ORGANISATIONS QUESTION: 158 (1)Whether any animal welfare groups or organisations applied for funding from the National Lottery during the year that ended 31 March 2002; if so, what groups or organisations? (2) Whether any of these groups or organisations received funding; if not, why not; if so, (a) which groups or organisations and (b) what amount did each receive? “For the financial year ended 31 March 2002, 27 animal welfare groups or organisations received funding from the National Lotteries. A (1) The criteria for funding for charitable organisations, including animal welfare organisations, as stipulated by the National Lotteries Board stated that preference would be given to organisations that were scaling down operations or facing closure due to lack of funding. In addition, organisations were also asked to provide their last three years’ audited financial statements so that the adjudicating committees could satisfy themselves that the applicants were indeed facing financial crises. Moreover, the organisation or project for which the funds will be used must be sustainable. The various branches of the Society for the Prevention of Cruelty to Animals (SPCA) applied for funding from the National Lotteries. The following branches submitted their applications: Eastern Cape: Free State: Gauteng: Cradock and Port Alfred & Bathurst District Virginia Brakpan, Germiston, Johannesburg, Krugersdorp, Midrand, Randburg, Rooderport, The Society for Animals in Distress and Westonaria KwaZulu-Natal: Limpopo: Mpumalanga: North West: Western Cape: Amanzimtoti, Dundee, Estcourt, Kloof, Newcastle, Pietermaritzburg and Zululand Ellisras, Phalaborwa and Polokwane Middelburg and Witbank Mafikeng and Rustenburg Oudtshoorn total of R1, 8 million was granted to these organisations.“ (2) For the financial year ended 31 March 2002, 27 animal welfare groups or organisations received funding from the National Lotteries. A total of R1, 8 million was granted to these organisations. 80 SPORTS ORGANISATIONS HOUSE: THE NATIONAL ASSEMBLY MEDIUM: ORAL MEMBER: MR. BW DHLAMINI (IFP) QUESTION: 295 1. Whether any sporting bodies have received funds from the National “In the 2001/2002 financial year, the Sport and Recreation Distributing Agency disbursed over R70 million to 251 organisations.” 1. The Sport and Recreation Distributing Agency funds organisations that are involved in the following areas: • Providing much-needed jobs in the renovation and upgrading of existing sporting facilities; • Assisting in the development of the sporting capabilities of the people in previously disadvantaged communities; • Providing opportunities for the youth of South Africa; • Teaching the youth to respect their bodies and avoid drugs and irresponsible sexual practices, thereby preventing the spread and contraction of HIV/AIDS. In the 2001/2002 financial year, the Sport and Recreation Distributing Agency disbursed over R70 million to 251 organisations. The new round of applications for this current financial year in this category closed on 7 June 2002. The adjudication process is ongoing, and depending on the whether the applications meet the set criteria, funds will be allocated to qualifying organisations in the Sport and Recreation category. 2. In addition to the above-mentioned criteria, the priority areas also include capacity building in sport, that is, training of managers, coaches, administrators and technical officials. Applications are called for from national, regional and local sporting organisations, and tertiary institutions that are involved, or who plan to involve themselves, in any of the priority areas already mentioned and if they can demonstrate the capacity to deliver. Lottery; if so, (a) which sporting organisations and (b) what amount have they received in total; 2. Whether any criteria are used to determine which sporting bodies receive funding; if not, why not; if so, what criteria? 2002 COMMONWEALTH GAMES TEAM HOUSE: THE NATIONAL ASSEMBLY MEDIUM: ORAL MEMBER: MR. NS BRUCE (DP) QUESTION: 1104 (selection) (1) Whether any national lottery funds were granted to the South African team participating in the 2002 Commonwealth Games; if so, (a) what amount and (b) who took the decision to make this funding available; (2) What is the (a) largest amount granted by the national lottery board to an applicant for funding and (b) name of the applicant who received this amount; 1. (a) Yes. The national lottery funds were granted to the South African team participating in the 2002 Commonwealth Games. An amount of R3 million was allocated for this purpose. 81 (b) The National Lotteries Board was appointed by the Minister of Trade and Industry as a Distributing Agency for the category of Miscellaneous Purposes. The Board, upon receiving applications for funding, reviews and makes recommendations for approval. (2) (a) & (b) An amount of R3,5 million was granted to the Eastern Province Hockey Federation. This represents the largest amount granted by National Lottery Board to an applicant. R3 million for the SA team in the Commonwealth Games. HOUSE: NATIONAL ASSEMBLY MEDIUM: MEMBER: ORAL MRS ANNA VAN WYK (NNP) ARTS AND CULTURE ORGANISATIONS QUESTION: 5 (WRITTEN QUESTION NO 981) 1(a) What were the (i) founding regulations and (ii) raison d’ etre for the establishment of the Arts, Culture and National Heritage Distribution Agency; (b) What was the date of its inception; (c) What amount has the Agency received from national lottery funds since its inception; (d) (i) How many and (ii) what type of applications have been received by the Agency and; (e) What criteria apply with regard to the applications; 2. Whether the Agency receives funds from any other sources; if so, to what extent? The Distribution Agency (had) received R99,313,412.00 from the National Lottery funds for the period 1st April 2001 to March 2002. 1. (a) The Arts, Culture and National Heritage Distribution Agency was established in terms of section 30 of the Lotteries Act No.57 of 1987. (b) The Distribution Agency came into to being on 28 November 2000 and the members were appointed on the same date for a period of 5 years. The agency met for the first time on 1st February 2001. (c) Since its inception, the Distribution Agency had received R99,313,412.00 from the National Lottery funds for the period 1st April 2001 to March 2002. (d) The number of applications received that met the criteria were 742. Various categories were invited to apply for funding ranging from community, youth, women, faith and school groups from different socio-economic backgrounds. (e) In order to qualify for funding, organisations had to show that their activities addressed the production and promotion of cultural products and/or performance, education, training and skills transfer and the building of new audiences that increase access to the arts. 2. No, the Distribution Agency does not have any other source of funding. 82 CRITERIA FOR FUNDING HOUSE: THE NATIONAL ASSEMBLY MEDIUM: WRITTEN MEMBER: MR M WATERS (DP) QUESTION: 1346 (selection) “All applications are captured on a Grant Management System developed especially for the National Lotteries Board.” 1. (a) What criteria are used to determine whether an organisation qualifies for funding from the National Lottery and (b) who makes the decision; 2. Whether an administrative system captures all the applications for funding onto the computer; if not, why not; if so, what are the relevant details; 3. Whether any amounts have been paid to non-charity organisations such as the RDP projects or sporting clubs; if so, (a) to which organisations, (b) what amount was paid in each case and (c) (i) on what dates and (ii) in respect of which projects were such payments made? 1(a) & (b) The Minister of Trade and Industry together with the National Lotteries Board and the relevant distributing agency determine the criteria to be used in the allocation of lottery funds. The applications are processed by the Central Applications Office of the National Lotteries Board (NLB) and presented for adjudication to the relevant distributing agency. (2) Yes, all applications are captured on a Grant Management System developed especially for the National Lotteries Board. (3)(a) – (c) No grants were made in the RDP category. Grants were made in the Sport and Recreation category. A full list of allocations made in the 2002 financial year will be included in the Annual Report of the NLB that will be tabled in Parliament. AMENDMENTS TO LEGISLATION HOUSE: THE NATIONAL ASSEMBLY MEDIUM: WRITTEN MEMBER: ADV D M BAKKER (NEW NP) QUESTION: 1606 (1) Whether he will consider amending legislation (a) speed up the process of disbursing the money received from the National Lottery and (b) decentralise the activities of the National Lotteries Board; if not why not; if so, what are the relevant details; (2) Whether any administrative problems have been experienced with regard to the disbursement of the money received from the National Lottery; if so, what are the relevant details? 1) The Minister of Trade and Industry is envisaging proposing amendments to the legislation only for the following purposes: • To combine the RDP and miscellaneous distributing agencies, to form one distributing agency for special purposes. The rationale for this distributing agency is to contribute to the alleviation of poverty, social development and the improvement of the quality of life; 83 • To enable natural persons and not just juristic persons to apply for grants to charitable work done by them; • To allow the Minister of Trade and Industry, in making allocations to distributing agencies, to consider the general development in South Africa and not the number of people or number of lottery tickets sold in each province. (2) The distributing agencies have been extremely efficient in processing applications within a period of six months, which is line with international best practice. In the financial year ending 31st March 2001, there was an operating surplus of R439 million in the National Lottery Distribution Trust Fund (NLDTF). The allocation amount to good causes amounted to just over R222 million. In comparison, all the other lotteries that existed prior to the National Lottery in South Africa only donated approximately R30 million to good cause over a five-year period. A multi-strategy approach will be developed with regards to enhancing the distribution of funds and to enable distributing agencies to consider more applications for large amounts that would be capable of having a social impact. Included in this strategy would be a public education campaign on how to apply for funding and the type of information that needs to be provided by an organisation. (3) No, the Minister of Trade and Industry will not make a statement in this regard. The allocation amount to good causes amounted to just over R222 million. HOUSE: THE NATIONAL ASSEMBLY MEDIUM: ORAL MEMBER: MR H J BEKKER (IFP) IMPROVING PAYOUTS QUESTION: 264 Whether, in light of the report recently released by the Centre for Civil Society on payouts from the National Lottery, he intends taking any steps to improve payouts to charities; if not, why not; if so, what steps; (1) Whether he will take into consideration the areas of concern highlighted by the report; if not, why not; if so, what are the relevant details? (1) The National Lotteries Board, a statutory body established in terms of the Lotteries Act No. 57 of 1997 is entrusted, inter alia, to ensure that the funds in the National Lottery Distribution Trust Fund (NLDTF) are administered and invested in terms of the Act. As at 09 September 2002, an amount of R210 million had been disbursed to charitable organisations. The distributing agencies meet regularly to adjudicate and process applications for funding. If the applications meet the set criteria, the National Lotteries Board then verifies the banking details and a Funding Agreement is signed between the charitable organisation and the Board. The dti is of the view that the process of disbursing funds to charitable organisations is satisfactory, taking into account the need to distribute funding in a responsible and accountable manner. (2) The report by the Centre for Civil Society, although it offers a few valuable insights, is nevertheless based on misinformation and factual inaccuracies. For example, the report confuses the role of the Ministry of Trade and Industry, with that of the National Lotteries Board and the act and regulations that governs the establishment of the board. The regulations, and not the act as 84 asserted by the report, stipulate that 10% of the total funds are to be allocated to the distributing agencies. It must be further noted that the beneficiary categories were chosen and agreed to by Parliament, in consultation with civil society during the lotteries bill debates before the Lotteries Act was passed in 1997. There are other inaccuracies that could be raised in respect of the report by the Centre for Civil Society. The concerns raised in this report are noted. However, the dti is satisfied with the National Lotteries Board’s execution of its mandate as stipulated in the act. There will be a continuous monitoring of its effectiveness and efficiency. New processes and procedures would be implemented if and when they make good business and good corporate governance sense. My department welcomes inputs from all sources provided that they are sound, unbiased and seek to improve the lives of all South Africans. DAILY LOTTERY DRAW HOUSE: THE NATIONAL ASSEMBLY MEDIUM: ORAL MEMBER: MR. CT FROLICK (UDM) QUESTION: 298 Whether his department has come out in support of the proposal for a daily The introduction of the daily lottery will be put on hold. The Minister of Trade and Industry has announced in Parliament that the introduction of the daily lottery will be put on hold, whilst an investigation into the effects of such a daily draw is underway and an assessment is made of whether it is important for the long-term sustainability of the lottery. The Minister of Trade and Industry has legislative powers, which could be used to prevent the introduction of daily draws. However, this would be based on clear evidence that the effects of such a draw would have negative consequences on society as a whole. lottery draw; if not, what power does his department have to prevent the institution of such daily draws; if so, why? NATIONAL LOTTERY BOARD MEMBERS HOUSE: THE NATIONAL ASSEMBLY MEDUIM: MEMBER WRITTEN MR G A J GROBBLER QUESTION: 18 (WRITTEN QUESTION NO 1188) (a) What are the monthly remunerations of the Board of Directors of the National Lottery Board; (b) Who are the members? (a) The Board members of the National Lottery are currently remunerated at R200 per hour, with the exception of the Chairperson who is remunerated at the level of the Director-General in the Public Service. (b) The National Lotteries Board is constituted by the following members: • Mr J Foster (Chairperson) • Dr A Ruiters (Director-General of the dti) – not remunerated • Advocate Dukada 85 • Mr Henry Gordon Makgothi • Ms Nora Nkuna-Fakude • Ms Shelly Thomas • Mr Norman Axten HOUSE: THE NATIONAL COUNCIL OF PROVINCES MEDIUM: MEMBER: WRITTEN MR K D S DURR BUDGETS OF GAMBLING BOARDS QUESTION: 43 1. (a) What is the total payment package of the (i) chairman and (ii) chief executive officer of the (aa) National Gambling Board of South Africa and (bb) provincial gambling board in each province, (b) what was the (i) staff complement and (ii) total budget of the (aa) National Gambling Board and (bb) provincial gambling board in each province for the 2001-02 financial year; 2. Whether the above positions are permanent and full-time positions; if not, what is the position in this regard? Province National Mpumalanga Chairperson’s Package R198 990 (Part-time) R2 800 per board meeting; R2 600 p.d. for other tasks Northern Cape R43 200 (part-time, R1 200 per meeting, contract renewable 2 yearly) Westerrn Cape R681 909 (Full-time, permanent) Kwazulu-Natal Limpopo Eastern Cape Free State Gauteng North-West R256 621 (Part-time) R46 400 (Part-time) R31 000 (Part-time) Vacant R40 132 (Part-time, R316/hr,) R12 025 (Part-time, R925/meeting) R452 870 (Full-time, permanent) R550 000 (Full-time, permanent) R507 000 (Full-time) R619 820 (Full-time, permanent) R865 638 (Full-time, contract) R585 000 (Vacant, acting) R482 087 (Full-time, permanent) 42 17 23 30 20 74 2 R15 549 775 R5 300 000 R12 000 000 R13 300 00 R25 815 000 R3 000 000 R19 736 000 R206 293 (Currently vacant) 5 R2 268 000 COE’s Package Staff Complement 21 posts 40 Budget 2001/2002 R12 902 965 R12 500 000 R611 000 (Full-time, permanent) R682 500 (Full-time, permanent) 86 TAX REVENUE FROM CASINOS HOUSE: THE NATIONAL COUNCIL OF PROVINCES MEDIUM: MEMBER: WRITTEN MR. KDS DURR QUESTION: 98 a) How many casinos are there in each Province; “The total tax revenue created by the casinos regulated by the nine Provincial Licensing Authorities was R439 287 100.00 There are currently 29 operational casinos in South Africa. Twenty-two of these are permanent a)There are provincial gambling boards in each of the nine provinces. These boards are responsible for issuing casino licenses. b) What tax revenue is generated by these casinos; and c) How many persons are directly employed in this industry? for the financial year ending 31 March 2002.” casinos, while 9 are temporary operations. b)The total tax revenue created by the casinos regulated by the nine Provincial Licensing Authorities was R439 287 100.00 for the financial year ending 31 March 2002. c)At present the NGB does not have information on the number of people employed by casinos. The Board is currently busy with a study to measure the economic impact of legalised gambling in South Africa since 1994. Employment by casino operators will be one of the deliverables of the study. . UNCLAIMED PRIZE MONEY HOUSE: THE NATIONAL ASSEMBLY MEDIUM: MEMBER: ORAL MR G A J GROBLER (DP) QUESTION: 10 (WRITTEN QUESTION NO 1105) Whether there was an increase in the amount of unclaimed prize money in “There was a decrease in the value of unclaimed prize money in the national lottery during the sixmonth period ended 30 June 2002.” No, there was a decrease in the value of unclaimed prize money in the national lottery during the sixmonth period ended 30 June 2002. The changes could be illustrated as follows: As from the 1st January 2002 to the 30th June 2002, the total of unclaimed and expired prizes amounted to R41 million; 50% of this amount was transferred to the National Lottery Distribution Fund and the other 50% was in the Trust Fund. The interest earned on the 50% kept in the trust fund and on unclaimed prizes amounted to R6 million. the national lottery during the six-month period ended 30 June 2002; if so, (a) what was the (i) percentage increase and (ii) amount involved and (b) what interest was earned on these funds during that period? 87 HOUSE: THE NATIONAL ASSEMBLY MEDIUM: WRITTEN MEMBER: MR. JJ NIEMANN (NNP) APPLICATIONS AND PAYOUTS QUESTION: 1271 + 1272 (a) What (i) organisations and/or associations have received financial payments from the national lottery since its introduction in South Africa and (ii) what amounts have been paid to each such organisation and/or association, (b) On which date did the payments take place and; (c) In which provinces are these organisations and/or associations situated? Applications: Charities Arts etc. Sports etc. Total 2317 902 564 378 1242 received funding. (a) Applications for funding were called for on the 25 March 2001 for the Charities category and on the 31 March 2001 for the Arts, Culture and National Heritage, and Sport and Recreation categories. The deadline for applications was set at 18 and 31 May 2001 respectively. Requirements for funding were published in Government Gazette No. 21696. Priority areas were identified by each of the categories and were included in the individual adverts. A total of 3 783 applications were received by the Central Applications Office by the deadlines. About 2 317 organisations in the Charities category applied, 902 applications were received in the Arts, Culture and National Heritage category and 564 applications were received in the Sport and Recreation category. A total of 1242 applications that met the criteria received funding. Both Charities and the Sports and Recreation categories have allocated over 60% of the amount available. The Arts, Culture and National Heritage category were able to allocate 48% of the amount available. Based on allocations from April to September 2002, there has been an increase in applications that meet the criteria for good causes. Distributing agencies to date have allocated R277 million, a 20% increase over the total for the year ended March 2002. Successful Arts, Culture and Natural Heritage allocations have increased by over 49%. Charities allocations have also increase by 33%. (b) and (c) In the financial year ended 31 March 2002, 32% of beneficiaries were from Gauteng, followed by the Western Cape, which received 24% of funding. KwaZulu-Natal and the Eastern Cape received 14% and 12% of funding respectively. The remaining provinces received 5% and less. It should be noted that the Gauteng figures also included national bodies, and therefore in practice many of these national bodies distributed the funds received from the National Lotteries Distributions Trust Fund to their provincial offices. The National Lottery Board will table a comprehensive list of organisations in each category that received funding for good causes in Parliament this year. As at 09 September 2002, an amount of R210 million had been disbursed to charitable organisations. 88 NOTES 89 NOTES 90 NOTES 91 NOTES 92