Court reinstates 4Racing’s betting levy share

The Gauteng Local Division of the High Court 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 will now be reinstated, giving back the totalisator its 3% share of the betting levy.

Phumelela instituted a review of the amendment under the Promotion of Administrative Justice Act 3 of 2000. On 1 December 2021, 4Racing took over Phumelela’s totalisator and race-meeting licences in Gauteng and intervened in Phumelela’s review application. The MEC and the Gauteng Gambling Board opposed Phumelela’s review application and 4Racing’s application for leave to intervene in the application.

The Court found that 4Racing was plainly interested in the proceedings and that its application for leave to intervene had to be granted. The Court was also satisfied that the amendment to Regulation 276 constituted unlawful administrative action that fell to be reviewed and set aside because it was procedurally unfair.

The Court furthermore rejected a counter-application instituted by the MEC and the Board to declare the pre-amendment regulation unconstitutional to the extent that it facilitates the payment of the betting levy to the holder of the totalisator licence.

The Court held that the effect of the relief would be that 4Racing would begin receiving its half of the betting levy raised under the Gauteng Gambling Regulations from the date of the order. In addition, the Court held that the order should have retrospective effect.  Accordingly, the Court directed the respondents to pay Phumelela and 4Racing the total amount of the levy that is due and payable in terms of Regulation 276 in the form it took before the amendment was made, in the case of Phumelela for the period from 1 April 2019 to 30 November 2021, and in the case of 4Racing for the period from 1 December 2021 to 30 May 2024. The respondents were also directed to pay interest on the aforesaid sums at the prescribed rate with the capital and interest required to be paid on or before 1 December 2024.

“We believe the judgement is fair and beneficial to the whole industry. 4Racing has always maintained that betting revenues are needed to contribute to the transformation of the industry, and to provide better conditions for its workers – this outcome will go a long way in achieving this. We also look forward to continuing to build strong relationships with all regulators, and driving greater impact in accordance with our mandate,” said 4Racing Chief Executive Officer, Fundi Sithebe.