Phumelela Gaming and Leisure Limited v Gründlingh and Others

Phumelela Gaming and Leisure Limited, a licensed totalisator operator, conducted a national computerised betting system on horse racing and other sports. Its totalisator dividends and race results were widely published. Two licensed bookmakers, André Gründlingh and Ulrich Osmund Schüler, used Phumelela’s published totalisator dividends as a reference when offering certain bets, particularly exotic bets. Phumelela alleged that this conduct amounted to unlawful competition, arguing that the bookmakers were unlawfully appropriating the fruits of its business system and goodwill. The Pretoria High Court granted an interdict in Phumelela’s favour, but the Supreme Court of Appeal (SCA) reversed that decision, holding that the bookmakers’ conduct was lawful and not wrongful. Phumelela sought leave to appeal to the Constitutional Court, contending that the SCA failed to develop the common law of unlawful competition in line with section 39(2) of the Constitution and that the conduct infringed its property rights under section 25.

Leave to appeal to the Constitutional Court was refused, and the application for direct access to challenge provisions of the National Gambling Act 7 of 2004 was also refused.

The case clarifies the relationship between unlawful competition, constitutional values, and legislative policy in South African law. It affirms that while section 39(2) of the Constitution applies to the development of the common law, courts will be reluctant to entertain new constitutional arguments raised for the first time at the Constitutional Court. The judgment underscores that legislative sanction over a long period is a strong indicator of public policy and the legal convictions of the community in determining wrongfulness.