The Gauteng Government has failed in a bid to appeal against a High Court ruling that found it unlawfully ended a levy to Phumelela Gaming and Leisure.
This, says a Business Day report, could mean the government has to pay about R500m it unlawfully denied to racing companies.
The provincial government must now restore the levy, benefiting the local industry and possibly other operators.
The ruling sets a precedent for operators that may face similar regulatory disputes.
The High Court specifically noted the benefit must flow to Phumelela, the designated provincial operator at the time, and its new licence holder, 4Racing, after Phumelela went into business rescue.
Phumelela estimated it is owed R500m.
A report by then Public Protector Busisiwe Mkhwebane recommended the gambling board stop paying over the levy the regulator receives from bookmakers.
The board did so and it was this implementation that was challenged.
The impugned regulation provided that 6% of punters’ winnings from bets placed with bookmakers would be paid: 3% as a tax and 3% as a levy to racing companies which held totalisator licences. Gauteng MEC Lebogang Maile stopped the 3% going back to the horse racing companies.
As a result of the court’s May ruling, the 3% had to be reinstated.
Maile and the gambling board sought leave to appeal, which suspended the reinstatement of the betting levy.
Justice Wilson dismissed the MEC and gambling board’s appeal this week. ‘I am not persuaded that the appeal now proposed stands reasonable prospects of success,’ he wrote.
For background, on 1 June 2024 the Sporting Post reported that 4Racing had then welcomed the decision of the Gauteng Local Division of the High Court who had reviewed and set aside the decision to amend Regulation 276 of the Gauteng Gambling Regulations in the matter between Phumelela Gaming and Leisure Limited and the MEC for Economic Development, Environment, Agriculture and Rural Development (Gauteng), Premier of Gauteng, Gauteng Gambling Board and 4Racing (Pty) Ltd.
Until 1 April 2019, Regulations 273 and 276 of the Regulations provided that 6% of the winnings of punters on horseracing placed with bookmakers would be paid in the following proportions: 3% would be paid as a tax in terms of Regulation 270 and 3% would be paid as a levy in terms of Regulation 273 to the holder of the totalisator licence contemplated in section 53 of the Gauteng Gambling Act.
This had been reinstated, giving back the totalisator its 3% share of the betting levy.
