Chairperson, Eastern Cape Gambling and Betting Board and Another v Vukani Gaming Eastern Cape (Pty) Ltd and Others

Vukani Gaming Eastern Cape (Pty) Ltd was one of two licensed route operators of limited pay out machines (LPMs) in the Eastern Cape province, each allocated 1000 LPMs. In June 2015, the Eastern Cape Gambling and Betting Board (the Board) commissioned a study to formulate policy for further licensing of LPMs, which recommended rolling out 4000 additional LPMs. The Board resolved to commence licensing of 400 additional LPMs. In September 2017, the Board issued a request for proposals (RFP) for 10 independent site operator licences (ISOs) across named municipalities in the Eastern Cape. In February 2018, the Board awarded ISOs to various companies, including the Golden Palace and Spin and Win applicants. Vukani brought an application to review and set aside both the RFP and the subsequent ISO licences, arguing that the Board failed to comply with Regulation 59(3) of the Eastern Cape Gambling Regulations, which required the Board to be satisfied that additional LPMs would not lead to over-saturation in the Province. Vukani's review failed at first instance before Dawood J but succeeded in the full court, which found the RFP unlawful for non-compliance with Regulation 59(3). The Board and successful licence holders applied for special leave to appeal to the Supreme Court of Appeal.

• What is the proper interpretation of Regulation 59(3)(a) of the Eastern Cape Gambling Regulations, specifically the requirement that the Board be 'satisfied' that additional LPMs will not lead to over-saturation?
• Does the concept of 'over-saturation in the Province' require a province-wide aggregative assessment or a granular locality-specific assessment?
• When must the requirements of Regulation 59(3) be complied with - at the stage of issuing the RFP or only when granting licences?
• Was the study upon which the Board relied so irrational and flawed as to vitiate the RFP?
• What degree of deference should courts afford to regulatory decision-makers in assessing compliance with statutory requirements?

1. The applicants were granted special leave to appeal. 2. The appeal was upheld with costs, including the costs of two counsel, where employed. 3. The order of the full court was set aside and replaced with: 'The appeal is dismissed with costs, including the costs of two counsel, where employed.'

The binding legal principles established are: (1) Regulation 59(3)(a) of the Eastern Cape Gambling Regulations requires an aggregative, province-wide assessment of over-saturation, not a locality-specific assessment; (2) When a regulatory provision requires a decision-maker to be 'satisfied' of certain matters, the decision-maker must have reasons that provide a rational basis for the conclusion reached, but those reasons do not require the concurrence of a reviewing court; (3) Over-saturation in some areas of a province does not preclude a finding that the province as a whole is not over-saturated, as over-saturation under Regulation 59(3)(a) is an aggregative concept determined across the province; (4) The determination of the number of additional LPMs to be licensed (an aggregative judgment) is distinct from the allocation of those LPMs to specific areas within the province (an allocative decision); (5) For a study relied upon by a decision-maker to be so flawed as to vitiate a decision on grounds of irrationality, it must be shown that the study provides no evidence or reasoning that could sustain the decision-maker's conclusions, not merely that it contains errors or limitations.

The court made several notable obiter observations: (1) The use of descriptors 'subjective' and 'objective' in administrative law is not always helpful and may obscure more than explain - what matters is the proper interpretation of the power conferred on the decision-maker; (2) The concept of 'deference' in public law may be apt to mislead - what matters is determining the nature and scope of the power, and once that is done, the court's duty is to give effect to its understanding of that power, not to apply deference or otherwise; (3) Aggregative judgments are common in guiding many policies (whether a country is over-populated, an economy over-taxed, or a society unequal) and can yield affirmative conclusions even though parts of the whole indicate otherwise; (4) The court declined to determine whether the issue of an RFP constitutes administrative action reviewable under PAJA or action reviewable under the principle of legality, finding this distinction immaterial to the grounds of review advanced and unnecessary to decide the appeal.

This case provides important guidance on the interpretation of regulatory provisions in the gambling industry and administrative law more broadly. It clarifies the approach to interpreting requirements that a decision-maker be 'satisfied' of certain matters, finding that such provisions require the decision-maker to have a rational basis for their conclusion but do not require concurrence by a reviewing court. The judgment makes an important distinction between subjective and objective tests in administrative law, cautioning that these labels may obscure rather than clarify the true nature of the power conferred. The case also clarifies the concept of 'deference' in judicial review, emphasizing that courts should focus on determining the nature and scope of the power rather than applying an a priori deferential or non-deferential approach. The distinction drawn between aggregative judgments (determining total numbers province-wide) and allocative decisions (determining distribution within the province) provides useful guidance for interpreting similar regulatory schemes. The judgment also sets a high threshold for challenges based on flawed expert studies, requiring a showing that the study provides no rational basis whatever for the decision, not merely that it contains errors or could have been better conducted.