The National Gambling Board v The Free State Gambling Board and Others

The Free State Gambling and Racing Board invited applications for special licences for the operation of slot machines in the Free State for a period of one year. This was done in 1998 before regulations were made in terms of section 17 of the National Gambling Act 33 of 1996 and before a central electronic monitoring system was established. The National Gambling Board objected to this, arguing that the Free State Board was not entitled to issue special licences before the promulgation of the section 17 regulations and the functioning of the central monitoring system. The Free State Board launched an application in the High Court for a declaratory order (effectively that it could not issue such licences), with the National Board supporting this application as first respondent. Ninety-nine applicants for special licences were cited as respondents, one of whom (the 14th respondent) brought a counter-application to compel the Free State Board to consider all pending applications without delay. The High Court (Lichtenberg JP) dismissed the Free State Board's application and granted the counter-application, finding that special licences under section 38 of the Free State Gambling and Racing Act 6 of 1996 stood independently of other provisions. The court also refused the National Board leave to appeal, finding it had no locus standi. The National Board then sought leave from the Supreme Court of Appeal.

• Whether special gambling licences issued under section 38 of the Free State Gambling and Racing Act are exempt from the provisions of the National Gambling Act and other provisions of the Free State Act
• Whether a special licence for a period of one year qualifies as a licence for 'specified dates' under section 38 of the Free State Act
• Whether the National Gambling Board has locus standi to appeal despite not being the original applicant and no order being made directly against it
• Whether the Free State Board was entitled to issue special licences before the promulgation of national regulations and establishment of a central monitoring system
• The interpretation of 'notwithstanding any other provision' in section 38(1) of the Free State Act
• The application of cooperative governance principles under Schedule 4 of the Constitution in relation to concurrent national and provincial legislative competence

The appeal was upheld. The orders of the court below (paragraphs 1(a) and 2) were set aside and substituted with: (i) a declaration that the Free State Board was not entitled to consider or award the special slot machine licences applied for by the 6th to 104th respondents; and (ii) dismissal of the counter-application by the 14th respondent. The costs order made against the Free State Board in the court below remained in place. No costs order was made regarding the leave to appeal application in the SCA (each party to bear own costs). The 14th, 78th and 90th respondents were ordered to pay the costs of the appeal jointly (including costs of two counsel). The 14th, 23rd, 26th, 37th, 42nd, 46th, 59th, 78th, 85th and 90th respondents were ordered to pay the costs of the leave to appeal application in the court below jointly (including costs of two counsel).

The binding legal principles established are: (1) Special gambling licences under section 38 of the Free State Gambling and Racing Act remain subject to the general provisions of both the Free State Act and the National Gambling Act - they are only 'special' regarding their temporal limitation and certain procedural exemptions. (2) A 'special licence for specified dates' means a licence for a specified day or days, not an extended period such as a year. (3) A statutory body with functions and objects directly affected by a court order has locus standi to appeal that order, even if it was not the original applicant and even if no order was made directly against it. The test is whether the party has a direct and material interest in the litigation. (4) Provincial gambling boards exercising powers under provincial legislation enacted pursuant to concurrent legislative competence must comply with the provisions, norms and standards of national legislation in the same field. Specifically, they cannot issue gambling machine licences until national regulations prescribing maximum numbers are promulgated and required monitoring systems are established. (5) In interpreting legislation falling within areas of concurrent national and provincial competence, courts must apply section 150 of the Constitution and prefer interpretations that avoid conflict between the two spheres of legislation.

The court made several obiter observations: (1) If special licences were completely exempt from the Act's provisions, serious anomalies would arise - contraventions would not be punishable under section 86, and disqualified persons under section 22 could nevertheless hold special licences. (2) The interpretation limiting special licences may restrict their field of application, but this fits the general scheme of the Act - for instance, special licences were likely never intended for casinos, given that section 13(1)(j) of the National Act limits casino licences in the Free State to four. (3) The court noted that relevant regulations under section 17 of the National Act had since been promulgated (RG 6977, Government Gazette of 21 December 2000), but these did not affect the outcome of the appeal. (4) The court expressed disapproval of the National Board's application for leave to appeal, noting it was not succinct, was accompanied by unnecessary documents, and included a misconceived condonation application relating to proceedings in the court below which were not the concern of the SCA. While the National Board would normally be entitled to costs for the leave application in the SCA, no order was made to signify this disapproval. (5) The court noted that parties with joint interests may be joined either as applicants or respondents, giving the example of co-owners seeking an interdict.

This case is significant for several reasons: (1) It clarifies the interaction between national and provincial gambling legislation under the framework of concurrent legislative competence in Schedule 4 of the Constitution. (2) It establishes principles for interpreting 'special' or exceptional licensing provisions - such provisions do not create complete exemptions from the regulatory framework but should be read in context to apply only to specific aspects (here, temporal and procedural). (3) It provides important guidance on locus standi for statutory bodies and third parties in administrative law litigation, confirming that a party with a direct statutory interest may appeal even if not the original applicant and even if no order was made directly against it. (4) It demonstrates the application of section 150 of the Constitution requiring courts to prefer interpretations that avoid conflicts between national and provincial legislation. (5) It establishes the principle that provincial gambling authorities must comply with national framework legislation, including waiting for prescribed regulations and monitoring systems before implementing provincial licensing schemes. The case illustrates cooperative governance principles in the sphere of gambling regulation.