The first and second appellants were licensed bookmakers in Gauteng authorised under the Gauteng Gambling Act 4 of 1995 to accept fixed-odds bets on horse racing. The respondent, Phumelela Gaming and Leisure Limited, operated a national computerised totalizator (tote) system known as Saftote, pooling bets and publishing dividends after races. The appellants began offering so‑called ‘exotic’ bets (such as trifectas and trios) to punters, where winnings were calculated by reference to the dividends later published by the respondent’s totalizator for identical bets. Although the appellants bore the betting risk and did not operate a pool system, their payouts mirrored the tote dividends. The respondent obtained an interdict in the Pretoria High Court restraining the appellants from offering such bets on the basis that they were not fixed‑odds bets and that the practice constituted unlawful competition. The appellants appealed to the Supreme Court of Appeal.
The appeal succeeded in part. The interdict restraining the appellants from offering the exotic bets on the basis that they were not fixed‑odds bets was set aside. However, the interdict based on unlawful competition was upheld, restraining the appellants from offering bets calculated by reference to the respondent’s totalizator dividends.
The case clarifies the interpretation of ‘fixed odds bets’ under South African gambling legislation, confirming that odds need not be immediately calculable when a bet is placed. More importantly, it is a leading authority on unlawful competition by misappropriation, demonstrating that the use of a competitor’s business system and performance, even without copying in the intellectual property sense, can be unlawful where it amounts to parasitic exploitation in a competitive market.