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PRESENTATION THIRD QUARTER PERFORMANCE REPORT: 1 October – 31 December 2014

PRESENTATION THIRD QUARTER PERFORMANCE REPORT: 1 October – 31 December 2014. PORTFOLIO COMMITTEE ON TRADE & INDUSTRY 13 March 2015 Cape Town Presenters: Ms Caroline Kongwa and Tumelo Baleni (Accounting Authority). CONTENT. Executive summary Performance against business plan

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PRESENTATION THIRD QUARTER PERFORMANCE REPORT: 1 October – 31 December 2014

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  1. PRESENTATION THIRD QUARTER PERFORMANCE REPORT: 1 October – 31 December 2014 PORTFOLIO COMMITTEE ON TRADE & INDUSTRY 13 March 2015 Cape Town Presenters: Ms Caroline Kongwa and Tumelo Baleni (Accounting Authority)

  2. CONTENT • Executive summary • Performance against business plan • Progress on actions in the risk register • Report against post audit implementation plan • Financial report • PFMA and Treasury regulation compliance checklist/ calendar • Conclusion

  3. EXECUTIVE SUMMARY • Prosecution of online gambling continues to prove to be a key challenge of the NGB. • Engaged with the National Lotteries Board on sports pool betting and reached agreement on resolution of the matter. • The illegal operator’s module concept document and the national registry concept document has been developed. • The NGB gathered national gambling statistics and information about the performance of the South African legalised gambling industry from all Provincial Licensing Authorities

  4. EXECUTIVE SUMMARY cont.... • The number of operational gambling positions in the Casino industry increased by 4.7% from FY14 to FY15 (Quarter 2) mainly as a result of the increased number of operational gambling positions in Gauteng, Western Cape, KwaZulu-Natal and Eastern Cape. • The number of active LPMs increased by only 4.1% from FY14 to FY15 (Quarter 2) , the highest number of site operators and active LPMs are still located in KwaZulu-Natal, followed by Gauteng and Western Cape. • Bingo showed a decrease of 0.6% in generated GGR as noticed from FY15 (Quarter 2) , despite the constant increase in the number of operational bingo positions from FY13 to 30 September 2015. The reason for the decrease during the second quarter (FY15) is unclear as yet. Growth in this sector is expected due to the recent roll-out of traditional bingo positions in KwaZulu-Natal. • GGR increased by 13.6% from R18 417 million in FY12, to R20 914 million in FY13 and by 4.3% to R 21 802 668 831 in FY14. A total amount of R11 718 398 248 in GGR was generated during quarter 1 and 2, FY15. A slightly lower increase of 1.9% in GGR generated was noticed from the first quarter, FY15 to the second quarter, FY15. During FY15, as at 30 September 2014, casinos accounted for the highest GGR being 71.6% as compared to other gambling modes. Compared to all other provinces, Gauteng at a 43.2% share, accounted for the highest amount of GGR. The GGR per gambling mode and province is reflected in Graphs 1 & 2 below.

  5. EXECUTIVE SUMMARY cont.... GGR per gambling mode, all provinces, FY15, Quarters 1 & 2 Casinosector continues to dominate other gambling modes or sectors in terms money wagered, GGR generated and taxes/levies collected. The racing and betting sector accounts for the highest increase in GGR relative to all other modes as an increase of 14.7%. Increases have been noticed in the bookmaker and totalisator industry, relative to betting on sport and horse racing. The LPM sector showed an increase of 8.7 % in generated GGR. The bingo sector reflected a decrease of 0.6% in generated GGR.

  6. EXECUTIVE SUMMARY cont.... GGR per province, all modes, FY15, Quarters 1 & 2 Gauteng accounts for the highest amount of GGR generated ,followed by KwaZulu-Natal , and Western Cape. Gauteng still accounts for the highest number of Casinos and operational gambling positions, followed by Western Cape and KwaZulu-Natal. The highest number of licensed bookmaker outletsare still situated in the Western Cape, whereas Gauteng accounts for the most operational bookmakers and totalisatoroutlets. The highest number of site operators and active LPMs are still located in KwaZulu-Natal, followed by Gauteng and Western Cape. Growth in the bingosector is expected due to the recent roll-out of traditional bingo positions in KwaZulu-Natal.

  7. EXECUTIVE SUMMARY cont.... Key challenges Proposed action Self-funding model for adequate financial resources. Capacitating the organisation in critical areas, prevention and to ensure detection of illegal gambling as well as enforcement. Fast tracking of legislative reform to further empower all licensing and oversight bodies. Recruitment of multi-skilled professional staff. • Continued proliferation of unlicensed internet cafes offering illegal server based gambling remains a massive problem. • Collection of illegal gambling statistics from the PLA’s remains a challenge as the information is not timeously updated. • Vacant posts continue to create a vacuum in the effective operation of the NGB.

  8. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES

  9. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  10. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  11. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  12. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  13. PROGRESS ON ACTIONS IN THE RISK REGISTER

  14. PROGRESS ON ACTIONS IN THE RISK REGISTER (CONT…)

  15. PROGRESS ON ACTIONS IN THE RISK REGISTER (CONT…)

  16. Report against post audit implementation plan

  17. REVENUE AND EXPENDITURE VERSUS BUDGET (R’000)

  18. REVENUE AND EXPENDITURE VERSUS BUDGET (R’000) (cont.)

  19. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JULY 2014 – 30 SEPTEMBER 2014

  20. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JULY 2014 – 30 SEPTEMBER 2014

  21. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JULY 2014 – 30 SEPTEMBER 2014

  22. CONCLUSION • 69% of the annual performance targets were achieved. • The financial position of the entity has been stabilised and a surplus is projected for the end of the financial year. The year to date variance is at approximately 12%. • The NGB continues to monitor the market conduct and market share: • A slightly lower percentage increase of 1.9% in GGR of R11 718 million generated was noticed in FY15 (Quarter 2). GGR in the gambling sector increased by 4.3% to R 21 803 million in FY14 . • A total amount of R 154 262 billion was wagered (turnover) in FY15 (Quarter 2). • Direct employment in the gambling sector has been monitored annually. Based on the information submitted by PLAs direct employment per province and mode for FY14 as per figures received from PLA’s is 19 475 permanent and temporary employment. • Based on the information submitted by PLAs, the average BBBEE status or level of the South African gambling industry as at 31 March 2014 per gambling mode and operator, was as follows: • Average BBBEE level for casino operators: 2 – 3. • Average BBBEE level for totalisators: Level 2 – 6. • Average BBBEE level for LPM operators: Level 2 – 4. • Average BBBEE level for bingo operators: Level 1 - 5 (currently only operational in Gauteng, Mpumalanga, North West and Eastern Cape).

  23. ACRONYMS Act : National Gambling Act, 2004 (Act No 7 of 2004) ARC : Audit and Risk Committee COTII : Council of Trade and Industry Institutions DOC : Department of Communications DPCI : Directorate for Priority Crime Investigation GRC : Gambling Review Commission MTEF : Medium Term Expenditure Framework NCEMS : National Central Electronic Monitoring System NGPC : National Gambling Policy Council NLB : National Lotteries Board NPA : National Prosecution Authority PLA : Provincial Licensing Authority PPP : Public Private Partnership RFP : Request for Proposals SAPS : South African Police Service SCM : Supply Chain Management

  24. Thank you 420 Witch-Hazel Avenue Eco-Glades 2, Block C,Eco Park, Centurion Telephone: 0100033475 Facsimile: 0866467150 info@ngb.org.za

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