New law may hobble job-rich racing sector

Proposed changes to gambling legislation could cost a lot, writes

PROPOSED changes to South Africa’s gambling laws, sincerely intended to maintain pace with technological advances, could have profound consequences for the horse-racing industry, which in the main operates cohesively and harmoniously.

Industry leaders welcome many of the revisions.

The strides taken to compel adherence to BEE objectives align with our existing and voluntary compliance with generic BEE guidelines in recognition of horse racing’s transformative capabilities to uplift lives. This, as well as empowering the National Gambling Regulator to promote a responsible industry, and continued recognition that the horse-racing industry is selfregulating, are aspects we applaud.

Horse racing supports more people than any other in the gambling sector — many thousands more than casinos. Around 180 000 South Africans depend on horse racing’s diverse centres of activity, from workers on farms and in stables to betting staff, vet services and event staff, with their dependants.

This is 23 times more jobs than those generated by casinos, per R1-million of gross gambling revenue.

Horse racing also makes significant contributions to provincial tax coffers, enabling the delivery of vital services. In the past year, the Gauteng government was paid over R57-million in gambling taxes on sports including horse racing, and the Western Cape over R7.9-million. That’s a lot of houses, schools and hospitals.

Realistically, however, horse racing in South Africa is not profitable on its own. Some operators rely on subsidies from other gambling operations.

All of the socioeconomic gains stand to be lost under the proposed changes.

The key changes seek to prevent tote operators offering bets on sports other than horse racing, seemingly in order to benefit the national lottery.

But there is no evidence of a reasonable probability that people will place their sports bets with the lottery.

An alternative suggested in the draft legislation is that multiple licences be issued by the lottery, but without clarity on issuing criteria.

A risk is that bets will shift to illegal bookmakers, bypassing the lottery trust fund and tax collection.

Furthermore, tote operators will have limited scope to continue to subsidise horse racing, if at all.

The South African Horse Racing Operators believes prudence and circumspection are necessary.

The industry knows what the problems are and how we can resolve them. We’re committed to collaborating with the government to spur on our mutual goals of a transformed, empowered industry, and our wider economy.

It would be a beautiful irony if horses — symbols of an outmoded economy — were a key to new, sustained growth for a modern South Africa.

Mnganga is chairwoman of Gold Circle and spokeswoman for the South African Horse Racing Operators