Case No: 17891 / 06

Date heard: 7—8 / 11 / 07

Date of judgment: 30 / 07 / 08

and

THE CHAIRPERSON OF THE GAUTENGGAMBLING BOARD

THE SOUTH AFRICAN BUREAU OF STANDARDSGLI AFRICA

SA BINGO (PlY) LTD

CREAM MAGENTA 309 (PTY) LTD

GALAXY BINGO EAST RAND (PTY) LTDGALAXY BINGO DEVELOPMENTS (PTY) LTDVIVA BINGO (NORTH PARK) (PlY) LTDINTERNATIONAL GAME TECHNOLOGY..AFRICA

(PTY) LTD

THE NATIONAL GAMBLING BOARD 10th Respondent

IN THE HIGH COURT OF SOUTH AFRICA

ROVINCIAL DIVISION)DELE7E WHICHEVER IS NOT APPLICABLE(1) REPORTABLE: V/S/No(2) OF !NTEREST1O OTHER JUDGE:(3) REVIsED.

In the matter between:

AKANI EGOLI (PlY) LTD

EMERALD SAFARI RESORT (PlY) LTDPEERMONT GLOBAL (EAST RAND) (PTY) LTDAFRISAN GAUTENG (PTY) LTD

ISOGO SUN CASINOS (PTY) LTD

SUN INTERNATIONAL (SOUTH AFRICA) (Pfl') LTD

1st Applicant

2nd Applicant

3rd Applicant

4th Applicant

5Eh Applicant

61h Applicant

1S! Respondent

2 Respondent

3rd Respondent

4th Respondent

5th Respondent

61h Respondent

7th Respondent

81h Respondent

91h Respondent

2

JUDGMENT

DU PLESSIS J:

It took me far too long to prepare and deliver this judgment. For that

offer to the parties my sincere apologies.

An Electronic Bingo Terminal is a composite electronic gambling device.

An American company International Game Technology Inc manufactures

(through a subsidiary company) such Electronic Bingo Terminals under the trade-

mark Real Touch Bingo (RTB). InternationaiGame Technology-Africa (Pty) Ltd

(IGT) is a South African registered subsidiary of the American company. It

distributes RTB's in South Africa. 1ST, albeit under a somewhat garbled version

of its name, is cited as the ninth respondent in these proceedings.

Purporting to act under a power duly delegated to him by the Gauteng

Gambling Board (the first respondent), the chief executive officer (CEO) of the

Board approved the RTB device "foruse in licensed bingo premises [or bingo

outletsj in the Gauteng gambling jurisdiction".1 Thesixth, seventh and eighth

The quote is from three similarly worded letters wherein the Board recorded the cEo'sdecisions

3

respondents respectively hold bingo licences under theGauteng Gambling Act,

4 of 1995 ("the GautengAct"). They are using the RIB in their bingo premises.

The applicants in this application hold casino licences in terms of the

Gauteng Act. They seek to have the CEO's decisions to approve the RIB for

use in bingo premises reviewed and set aside on various grounds. In essence

they contend that the RIB is none other than an ordinary slot machine commonlyfound, I am informed, in casinosand that the game played on it is not bingo. In

the alternative, if the game played on the device is bingo, then the applicants

contend that the game is not played in accordance with the bingo rules

promulgated by the Board. Finally, the applicants contend that the game fails toyield a minimum return to

players that the Gauteng Act and its Regulations

prescribe in respect of bingo. For any of these reasons, the applicants contend,the CEO in effect approved an unlawful activity.

There is some confusion on the papers as to whether the GautengGambling Board ratified the CEO's approval of the RIB device. To theextentthat it did so, the applicants seek an order, on the same bases, to have the

Board's decision reviewed and set aside.

Although the first, fifth, ninth and tenth (the National Gambling Board)respondents filed answering affidavits, only first and ninth respondents,

respectively the Gauteng Gambling Board and IGT, opposed the application.

4

It will in the course of thisjudgment be necessary to refer to both the

Gauteng Act and the NationalGambling Act, 7 of 2004 ("the National Act)

because in terms of Part A of Schedule 4 to the Constitj of the Republicof South Africa, 1996,

"casinos1 racing, gambling and wagering excludinglotteries and sports pools" constitute functionai areas of concurrent national andprovincial legislative competence. Against that background, the first part of thelong title to the National Act reads as follows: "To provide for the co-ordination of

concurrent national and provinciallegislative competence over matters relating to

casinos, racing, gambling and wagering, and to provide for the continued

regulation of those matters; for that purpose to establish certain uniform normsand standards applicable to national and provincial regulation and licensing of

certain gambling activities; to provide for the creation of additional uniform normsand standards applicable throughout the Republic . The Preamble of the Actis to the same effect.

I have pointed out that the applicants contend, in the first place, that he

game played on the RIB is notbingo and therefore, that the CEO authorised an

unlawful activity when he approved the RIB for use in bingo premises. It is

necessary to explain why it would be unlawful to use the RTB in bingo premisesif the game played on it is not bingo. That explanation follows.

5

In the first place, the Gauteng Act, under which the relevant respondents

were granted bingo licences, provides that only the holders of casino licences

and bingo licences may maintain premises where the gambling game of bingo isplayed" (See section 46(1) and (2) of the Gauteng Act). In terms of section 47(1)and (2) of the Gauteng Act, a bingo licence authorises only 'the conducting or

providing of the game of bingo" on the relevant premises it follows that the only

gambling game that the holder ofa bingo licence may provide is the game of

bingo.

The applicants contend that the game played on the RIB is not bingo.

The respondents contend the contrary I shall return to that issue. Suffice it atthis stage to point out that, whether the game played on the RIB is bingo or not,

making the RIB available for play amounts to a 'gambling activity" in terms of theNational Act. I say that for the following reasons: Under section 3(c)(i) of theNational Act, an "activity is a gambling activity if it involves.., making available forplay, or playing ... jgo or another gambling game in terms of section 5". If, onthe one hand, the game played on the RIB is bingo, making it available for playconstitutes a "gambling activity". If, on the other hand, the game played on theRIB is not bingo, it is manifest on the evidence that it is a "gambling game2" andtherefore making the RIB available for play remains a "gambling activity" undersection 3(c)(i).

2 I shall later in this judgment deal in detail with the functioning of the RIB,

6

in terms of section 8(a) of the National Act, nobody may engage in,

conduct or make available a gambling activity" unless that gambling activity is

licensed, if the game played on the RTB is bingo then the relevant respondents

are licensed to make it available for play on their premises. If not, making it

available for play on the premises would be unlawful (See, again, sections 46

and 47 of the Gauteng Act but, as I shall illustrate in the next paragraph, the

National Act is to the same effect.)

According to section 1 of the NationalAct, "casino" means, relevant to this

judgment, "premises where gamblinggames are played, or are available to be

played, but does not include premises inwhich - (a) only bingo and no other

gambling game is played or available to beplayed" or "limited pay-out machines

are available to be played and bingo, butno other gambling game is played or

available to be played Thus, if the game played on the RIB is not bingo, it

may only be made available for play in licensedcasino premises. Making it

available for play in licensed bingo premises would be unlawful.

Against that background, I now turn to the issues between the parties.

The Board and its CEO concedethat, if the game played on the RTB is not

bingo, the relevant decisions wouldamount to purported authorisation ofan

unlawful activity and would be liable to be reviewed and set aside. From that

perspective the issue simply is whether the game played on the RIB is bingo or

7

not. The ninth respondent hadanother string to its bow, however. I deal with

that first.

Counsel for the ninth respondent contended that the CEO's decisions

amounted to no more than type approval" of the RIB. I shall explain this term in

due course. The argument continued that the decisions to grant 'type approval"

did not amount to administrative action as defined in section 1 of the Promotionof Administrative Justice Act, 3 of 2000 (PAJA) because not one of the

decisions can be described as a decision "which adversely affects the rights of

any person and which has a direct, externallegal effect" (See the definition of

"administrative action" in section 1 of PAJA).

The term "type approval" is not used in the Gauteng or the National Acts.

The parties used it to describe a two stage procedure provided for in regulation208 of the Regulations

promulgated under the Gauteng Act. In terms of

regulation 6 Chapters 52 to 56 of theRegulations apply "only in respect of

licensed manufacturing, supplier or maintenance operations" and thus, it is

common cause, to lOT. In terms of regulation 208, that forms part of the

chapters mentioned, "a licensee shall not distribute any gaming of associated

equipment, device or game unless it has, on application ... been approved by the

board (Regulation 208(1)). Regulation 208(2) provides that only "equipment,

devices and games meeting the technical standards as determined by the board,

shall be approved for distribution". It is implicit in the two sub-regulations that

8

equipment and devices must first meet the technical standards set by the Board

(the first stage). Only after that can the equipment or device be approved for

distribution (the second of the two stage procedure).

It is for such type approval that IGT applied. The Board had delegated its

power to grant such approval to the CEO. It is the CEO's decisions (there were

three of them in respect of different models of RIB devices) to grant the approvalthat is under attack.

The sixth respondent contended that, although the CEO in terms

approved the RTB devices for use in licensed bingo premises, his function was

limited to approving the RTB for distribution. Accordingly, so it was contended,

the decisions did not adversely affect the applicants and it did not have 'a direct,

external legal effect".

It was held in Grey's Marine Rout Bay (Pty) Ltd v Minister of Public

Works 2005 (6) SA 315 (SCA) that the relevant portion of the definition of

administrative action should not be taken literally and that "administrative action

is action that has the capacity to affect legal rights (Para. 23 of the judgment).

In this case the CEO's decisions definitely have the capacity to affect the

applicants' rights. The approval in terms of regulation 208(1) does not take place

in a vacuum. It must be understood,pertinent to equipment for playing bingo, in

the context of regulation 146(1)(a) that provides 'A licensee shall not keep or

9

expose for play any equipment which may be used in the operation of a bingo

game other than equipment which — (a) is identical in all material respects to

equipment which have been approved by the board for distribution by the

manufacturer or supplier". It is, in my view, clear that approval in terms of

regulation 208(1) is approval for distribution to specified licence holders and not

for distribution perse. It is for that reason that the CEO, correctly in my view,

was fully aware thereof that he could only approve the RTB if the game of bingo

is played on it.

For the ninth respondent it was contended that type approval is essentiallyaimed at ensuring that the relevant device meets the technical standards set bythe Board. In my view the contention is based On a misconstruction of regulation

208 in that it equates the firststage (technical approval) with the second

(approval for distribution to specified licensees).

The decision to approve the RTB has the capacity to affect the applicant's

rights because, if the game played thereon is not bingo, the decision would have

the effect of purporting to allow the holders of bingo licences, by using the RTB in

bingo premises, unlawfully to compete with the holders of casino licences.

Surely, once the distribution of RTB devices had been approved, the Board was

no longer in a position to contend that the devices may not be used in bingo

premises in accordance with regulation l46(1)(a).

10

The next question is whether the game of bingo is played on the RTB. For

that purpose it is necessary briefly to describe how the RIB functions. it consists

of a number of touch screen terminals that each has a small electronic

processor The terminals are linked to an electronic server. A minimum of two

players is required. Players log onto the game by inserting a coin or voucher into

a slot on the terminal and by then pressing a button, If a particular player logsonto one of the terminals, theserver is programmed not to allow the game to

start until at least one further player has logged onto another terminal, which may

or may not be in the same premises. Thereafter the server waits for a pre-

determined time to allow further players to log on. When the game starts, each

player selects a bingo card from a set ofbingo cards electronically generated by

the server and displayed on the RTB screen. The bingo cards comprise 5X5 (25)

grids, each grid containing a number between 1 and 75. Each player's card is

displayed on the screen of his or her terminal. Once the cards have been

assigned, the server automatically generates and releases in batches the

numbers ito 75 in random order. Theserver transmits the numbers in their

random order to the processor of the terminal. The numbers then appear on the

screen of the bingo terminal. The outcome of the game, that is, whose card was

first matched, is determined automatically by electronic means. All that is

required of players, in fact all that they could possibly do, is to insert the coin of

voucher, press a start button and select a card. The rest of the game is played

electronically by the server and the processor in the terminal, and the result is

automatically displayed on the screen of the terminal. Players could also win

11

interim prizes and a jackpot prize, but that is not now relevant. The entire game

played on the RIB takes about 1,5 seconds.

Section 1 of the National Act definesthe term "bingo". The Gauteng Act

has no definition of the term. I have earlier quoted the long title of the National

Act. According to its preamble, it is premised on the desirability thereof "to

establish certain uniform norms and standards, which will safeguard people

participating in gambling and their communities against the adverse effect of

gambling, applying generally throughout the Republic with regard to casinos,

racing, gambling and wagering", in view of this stated purpose of the National

Act and the inter-related scheme ofnational and provincial gambling legislation, I

hold that the Gauteng legislature advisedly did not define "bingo" because the

National Act provides the definition. In my view the intention of the national

legislature was to ensure that one definition of the term is applied throughout the

country. By not defining the term, the Gauteng legislature conformed to the

intention of the national legislature. I conclude that the question is whether the

game played on the RTB is "bingo" as defined in section 1 of the National Act.

The definition reads as follows:

"bingo" means a game, including a game played in whole or in part by

electronic means—

(a) that is played for consideration, using cards or other devices—

12

(i) that are divided into spaces each of which bears a different

number, picture or symbol; and

(U) with numbers, pictures or symbols arranged randomly such that

each card or similar device contains a unique set of numbers, pictures or

symbols;

(b) in which an operator or announcer calls or displays a series of

numbers, pictures or symbols in random order and the players match each

such number, picture or symbol on the card or device as it is called or

displayed; and

(c) in which the player who is first to match all the spaces on the card

or device, or who matches a specified set of numbers, pictures or symbols

on the card or device, wins a prize, or any other substantially similar game

declared to be bingo in terms of section 6 (4)"

The game played on the RTB conforms to paragraph (a) of the definition

According to paragraph (b) of the definition, thegame is an interactive one

in which an announcer calls or displays numbers, pictures or symbols one byone

and in which players then match each number, picture or symbol as it is called or

displayed.

I shall assume for purposes of the judgment that the server produces the

numbers, pictures or symbols one by one. Being an electronic device, it does so

13

literally at the speed of light. I do not think that in the circumstances it could be

said that there is in the RTB games an operator or announcer': the server does

it all. It is not, as the definition allows,an announcer or operator that does it

whole or in part by electronic means". The game has no announcer or operator.

What in my view is more important is that the player takes no part in the

actual game played on the RTB. He or she does no matching either by

electronic means or otherwise. In that regard, the RTB simply does not provide

for an interactive game with player involvement in accordance with the definition.

By referring to the player "who is first to match"and "who matches", paragraph

(c) confirms the requirement that, for the game to be bingo, the player must be

involved in the matching process albeit that he or she may do it by electronic

means, for instance, by touching a touch screen.

If I am wrong that the definition of the National Act must apply, the term

"bingo" (or "the gambling game of bingo") used in the Gauteng Act must bear its

ordinary grammatical meaning. According to the Shorter Oxford English

Dictionary (5th edition, volume 1) "bingo" is a "popular gambling game like otto,

played esp. in public halls, with cards divided into numbered squares, in which

the first player to cover all or a specified set of numbers on the cards wins a

prize." According to Wikipedia (the free internet encyclopaedia, en.

Wikipedia.org/wijçj/Bingo (US)), there are essentially two versions of bingo, the

US and the UK ones. The 5X5 grid cards are used in the US version which is

14

defined as follows: "Bingo is a game of chance in which selected numbers are

drawn and players match those numbersto those appearing on 5x5 matrices

which are printed or electronically represented and are known as "cards.' The

first person to have a card where the drawn numbers form a specified pattern is

the winner and calls out the word "Bingo!" to alert others and inform the caller of

the win." (The UK version follows the same pattern but the cards are different.)

According to these definitions, the essential feature of bingo is the involvement of

players in the matching process and in theclaiming of a win. As I have pointed

out, the feature of player involvement islacking in the game played on the RTB.

I conclude that the game played on the RIB is not bingo. As it is a

gambling game, it may not lawfully be played or made available for play on bingo

premises. It is, as contended for by the applicant, none other than a slot

machine and may only be used on licensed casino premises.

It follows that the CEO, by approving the RIB for use in licensed bingo

premises purported to sanction unlawful conduct and that the decisions fall to be

reviewed and set aside. I have pointed out that there is confusion on the papers

as to whether the Board ratified the decisions ofthe CEO. In view of my

conclusion, any decision the Board may have taken to similar effect would also

be liable to be reviewed and set aside.

I

15

All the parties were respectively represented by two counsel. The costs of

two counsel must doubtless be allowed.

In the result, the following order is made:

1. An order in terms of prayers 1, 2, 3 and 4 of the applicants'

amended notice of motion and appearing on pages 2a to 2d of the

said amended notice of motion.

2. The first and ninth respondents, jointly and severally, the one

paying the other to be absolved, are ordered to pay the applicants'

costs, including the costs of two counsel.

H__B. R. DU PLESS1s

JUDGE OF THE HIGH COURT

APPLICANT'S LEGAL REPRESENTATION:

KNOWLES, HUSAIN LINDSAY INC

dO Friedlancj Heart & PartnersF

Ref:

Tel: 011 6696000

.jSt RESPONDENT'S LEGAL REPRESENTATION:MDLULwp, NKUHLA ATTORNEYS

Ref: Sibusiso Tshangana/bk/GGB

16

5th & gth RESPONDENT'SLEGAL REPRESENTATION:

BOWMAN GlLFILN

/Ref: Mr. D.M.

Tel: 011 6699000

3rd RESPONDENT'S LEGAL REPRESENTATION:WEAVIND & WEAVIND

Ref: N. VIVierSIDR/G13197

Tel: 0123463098

10th RESPONDENT'S LEGAL REPRESENTATION:MASHILE TWAL,A INC

Ref: Mrs. C. Twala/wa/L5829

1TeI:011

-F_