KwaZulu-Natal Bookmakers' Society and Another v Phumelela Gaming and Leisure Ltd and Others

The appellants were two voluntary associations representing bookmakers holding bookmaker licences. They challenged the validity of totalisator licences held by the first, second and third respondents (Phumelela, Kenilworth and Gold Circle - the "tote respondents"), which permitted totalisator betting on sporting events other than horse racing. The bookmakers argued that totalisator betting on sports other than horse racing fell within the definition of a "sports pool" in the Lotteries Act 57 of 1997 and was therefore prohibited in the absence of a sports pool licence issued under that Act. They sought declarations of invalidity, interdicts, and orders directing provincial gambling boards to withdraw permissions granted to the tote respondents. Gold Circle operated under a licence from the KwaZulu-Natal Gaming and Betting Board pursuant to the KwaZulu-Natal Gaming and Betting Act 8 of 2010, which expressly authorised totalisator betting on sporting events other than horse racing. The bookmakers accepted this express authorisation but challenged the constitutional competence of the provincial legislature to enact such legislation. The Gauteng Division of the High Court, Pretoria dismissed the application, finding that tote betting on horse racing and other sports fell within the exclusionary clause in the definition of "sports pool" in the Lotteries Act.

• Whether totalisator betting on sporting events other than horse racing falls within the definition of 'sports pool' in the Lotteries Act 57 of 1997
• Whether the Lotteries Act prohibits totalisator betting on sports other than horse racing in the absence of a sports pool licence
• Whether provincial legislatures have constitutional competence to authorise totalisator betting on sporting events other than horse racing under the National Gambling Act 7 of 2004 and provincial gambling legislation
• The correct interpretation of the exclusionary clause in the definition of 'sports pool' in the Lotteries Act
• The distinction between 'lotteries and sports pools' and 'casinos, racing, gambling and wagering' in the Constitution

The appeal was dismissed with costs, including costs of two counsel where employed. The totalisator licences held by the respondents were found to be valid. Provincial gambling boards were confirmed to have the constitutional and legislative authority to license totalisator betting on sporting events other than horse racing.

Totalisator betting on sporting events, including sports other than horse racing, does not fall within the definition of "sports pool" in section 1 of the Lotteries Act 57 of 1997. A "sports pool" involves a scheme where participants forecast results and win prizes, whereas totalisator betting involves the pooling of stakes and payment of dividends in proportion to amounts staked. The exclusionary clause in the definition of "sports pool" - "excluding any scheme or competition in respect of horse racing which is authorised by the board, or which is conducted in the same format and manner and under the same circumstances as a scheme or competition in respect of horse racing that existed prior to 18 June 1997" - extends beyond horse racing to include all forms of totalisator betting on sports that were conducted in the same manner as horse racing schemes before that date. Provincial legislatures have constitutional competence under section 104(1)(b)(i) of the Constitution, read with Schedule 4 (which provides for concurrent national and provincial legislative competence over "casinos, racing, gambling and wagering, excluding lotteries and sports pools"), to regulate and license totalisator betting on all sporting events. The National Gambling Act 7 of 2004 and provincial gambling legislation validly provide for totalisator betting on any event or combination of events, and provincial gambling boards may lawfully issue licences authorizing such betting.

The Court made several non-binding observations: (1) If the Department of Trade and Industry believes totalisator betting on sports other than horse racing should not be licensed by provinces, it should make the necessary legislative changes rather than relying on policy documents. (2) The fact that totalisator betting on various sports has been openly conducted for almost two decades since the legislation was enacted, without intervention, supports the interpretation that it is lawful. (3) The bookmakers' application appeared to be opportunistic and aimed at achieving a monopoly in respect of betting on sports other than horse racing. (4) Policy determinations cannot override, amend or conflict with laws - policy should be reflected in legislative instruments to bind the public. (5) The Court expressed concern about challenges raised for the first time in replying affidavits or on appeal, particularly where the respondent was not given adequate notice and opportunity to respond, and where relevant parties (such as provincial gambling boards) did not participate in the proceedings to provide necessary information.

This case is significant in South African law because it clarifies the constitutional and legislative framework for the regulation of gambling and wagering. It confirms the distinction between sports pools (regulated nationally under the Lotteries Act) and totalisator betting (regulated concurrently by national and provincial governments under the National Gambling Act and provincial legislation). The judgment affirms provincial legislative competence in the area of gambling and wagering, including totalisator betting on all sporting events, not just horse racing. It demonstrates the importance of contextual and purposive statutory interpretation, particularly having regard to legislative history and constitutional allocation of powers. The case also illustrates proper application of rules regarding the scope of issues that may be raised in application proceedings and the need for clear formulation of challenges in founding papers. The decision has practical implications for the gambling industry, confirming the validity of long-standing provincial licensing practices for totalisator betting on various sports.