4Racing are reportedly owed around R500 million by the Gauteng government and if it is forthcoming it will provide a massive boost to stakes in the province. (JC Photos)
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.
