STRATEGIC PLAN 2015/ /20

Transcription

1 STRATEGIC PLAN 2015/ /20

2 TRADITIONAL HORSE RACING IN THE EASTERN CAPE

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4 FOREWORD BY THE CHAIRPERSON OF THE BOARD The ECGBB s new Five Year Strategic Plan is guided by the Medium Term Strategic Framework (MTSF), which reflects prevailing provincial priorities. As such, the Board has a responsibility to ensure that the work of the ECGBB is aligned with achieving these priorities, both provincially and nationally. The development and implementation of the Strategic Plan is taking place at a time when the province is facing significant fiscal pressure, brought about by recent budget austerity measures implemented by the National Minister of Finance. These measures call upon all of us, including the management of the ECGBB, to ensure that financial prudency is exercised while also ensuring that policy priorities are implemented. The gambling industry in the Eastern Cape continues to create jobs, promote tourism and contribute significantly towards investment in infrastructure development in the province. To this end, the estimated R2.1 billion invested in the four licensed casinos, bingo halls and other modes of licensees in the province attracted over 6.3 million visitors during 2013/14. During the first nine months of the 2014/15 financial year, ECGBB collected R73.4 million from the province s various casinos and close to R18 million from Limited Payout Machines (LPM) operations. A total of R7.2 million came from bingo halls and R5.6 million from horse racing. This revenue was paid over to the provincial fiscus as required by our governing legislation. The industry is expected to grow further following the proposed issuance of the Zone 4 casino license, the roll out of the recently awarded bingo licenses, including the awarding of various Type A, B, and C licences to the emerging entrepreneurs in the Province. The Board is the second largest contributor to the provincial fiscus following revenue emanating from motor vehicle licensing. To date, the Board has contributed a staggering R586 million to the fiscus in the last five years (2009/ /14). Traditional horseracing has become a very popular sport and recreational activity among rural communities in the Eastern Cape. This sport, however, is not regulated and has received no formal support from government agencies in the Province. Consequently, the Board conducted research on the status of Traditional Horse Racing in the Province in the 2013/14 financial year. The findings and recommendations of the research suggested, inter alia, that there is a need to develop a policy aimed at standardizing and enhancing Traditional Horse Racing in the Province. The Board strategy in the next five year aims to achieve a revenue collection target of R780 million for the Provincial Fiscus by 2019/20 and intensify compliance in the gaming industry. The Board s clear and consistent strategy demonstrates the required combination of focus and flexibility to deliver results within limited budget allocation. The Board of Directors as the accounting authority is therefore confident that Management will implement this five year strategic plan. To this end, Management has the support and commitment of the Board to ensure that the priorities for the next five years are implemented. Adv. N Mayosi Chairperson of the Board 1

5 OFFICIAL SIGN-OFF It is hereby certified that this Strategic Plan: Was developed by the management of the Eastern Cape Gambling and Betting Board under the guidance of the Board and the Hon. Member of the Executive Council for Economic Development, Environmental Affairs and Tourism; Takes into account all the relevant policies, legislation and other mandates for which the Eastern Cape Gambling and Betting Board is responsible; and Accurately reflects the strategic outcome-oriented goals and objectives which the Eastern Cape Gambling and Betting Board will endeavour to achieve during the period 2015/ /20. Mr. R. Hill Signature: Chief Financial Officer Mr. L. Tshoko Signature: Head Official Responsible for Planning Mr. R.M. Zwane Signature: Chief Executive & Accounting Officer Approved by: Adv. N. Mayosi Signature: Accounting Authority and Chairperson of the Board Endorsed: Signature: Hon S Somyo, MPL MEC for Economic Development, Environmental Affairs and Tourism Executing authority 2

6 CONTENTS PAGE NO. Foreword by the Chairperson of the Board... 1 Official Sign-Off... 2 List of Abbreviations and Acronyms... 6 List of tables Table 1: Relevant Court Rulings Table 2: Employment Opportunities Created by Licensees in the Past Five Years Table 3: Eastern Cape Statistics on Infrastructure Development Table 4: ECGBB s Commissioned Research Work over the Past Five Years Table 5: Eastern Cape Casinos, Per Zone or Municipal Boundaries Table 6: Profile of Operating Eastern Cape Casinos Table 7: Profile of Eastern Cape RO and LPMs Table 8: Profile of Eastern Cape BM Industry Table 9: Profile of Eastern Cape Tote and Racecourse Table 10: Profile of Eastern Cape Bingo Halls Table 11: Strengths and Weaknesses of the ECGBB Table 12: Justification of Strategic Outcome-Orientated Goals Table 13: Justification of Strategic Objectives List of Figures Figure 1: Revenue Collected for the Eastern Cape Fiscus over the Past Five Years Figure 2: Taxes / Levies & Fees Contribution, Per Province over the Past Five Years Figure 3: Average RTP%, Per Gambling Mode over the Past Five Years Figure 4: Map of the Eastern Cape Showing Casino Licence Zones and Locations Figure 5: ECGBB Organisational Structure Figure 6: Diagrammatic Representation of the ECGBB Strategy Map

7 PART A: STRATEGIC OVERVIEW Vision Mission Values Legislative and Other Mandates Constitutional Mandate Legislative Mandates Policy Mandates Relevant Court Rulings Situational Analysis Performance Environment Organisational Environment Description of the Strategic Planning Process Organisational Structure Strategic Outcome-Oriented Goals of the ECGBB Strategy Map of the ECGBB PART B: STRATEGIC OBJECTIVES Introduction and Background Budget Programmes to be implemented by the ECGBB Overall Budget Requirements Budget Programme One: Corporate Services Management and Administration Budget Programme Purpose Budget Programme Description Key Categories of Personnel Priorities for the Next Five Years Selected Strategic Objectives, Performance Indicators and Targets for Budget Programme one: Corporate Services Management and Administration Resource Considerations Risk Management Budget Programme Two: Gambling Regulation and Consumer Protection Budget Programme Purpose Budget Programme Description Key Categories of Personnel Priorities for the Next Five Years

8 14.5 Selected Strategic Objectives, Performance Indicators and Targets for Budget Programme Two: Gambling Regulation and Consumer Protection Resource Considerations Risk Management Budget Programme Three: Research, Learning & Knowledge Management Budget Programme Purpose Budget Programme Description Key Categories of Personnel Priorities for the Next Five Years Selected Strategic Objectives, Performance Indicators and Targets for Budget Programme Three: Research and Development Resource Considerations Risk Management PART C: LINKS TO OTHER PLANS Links to the Long-Term Infrastructure and Other Capital Plans Conditional Grants Public-Private Partnerships PART D: ANNEXURE Annexure A: Socio-Economic Development and Empowering Projects and Activities Over the Past Five Years 78 Annexure B: Technical Indicator Descriptions 80 5

9 LIST OF ABBREVIATIONS AND ACRONYMS AFS AGSA AO APP BBBEE BM CEO CFO COL DEDEAT DoRA ECGBB GAAP FIS FM GGR GIMS GRAP HDI HoD HRM HRD IA IDP IGR IT IYM LPM MEC MTEF MTSF NDP NGB NIA NPA NRGP NTR PFMA Annual Financial Statements Auditor-General of South Africa Accounting Officer Annual Performance Plan Broad-Based Black Economic Empowerment Bookmaker Chief Executive Officer Chief Financial Officer Conditions of Licence Department of Economic Development, Environmental Affairs & Tourism Division of Revenue Act Eastern Cape Gambling and Betting Board Generally Accepted Accounting Practices Financial Information System Financial Management Gross Gaming Revenue Gaming Information Management System Generally Recognised Accounting Practices Historically Disadvantaged Individuals Head of Department Human Resource Management Human Resource Development Internal Audit Integrated Development Plan Inter-Governmental Relations Information Technology In-Year Monitoring Limited Payout Machine Member of the Executive Council Medium-Term Expenditure Framework Medium-Term Strategic Framework National Development Plan National Gambling Board National Intelligence Agency National Prosecuting Authority National Responsible Gambling Programme National Treasury Regulations Public Finance Management Act 6

10 PPP PGDP RO RTP SARS SAPS SA SCM SCOA SCOPA SED SLA SMART SMME THR ToR TOTE Public-Private Partnership Provincial Growth and Development Plan Route Operator Return To Player South African Revenue Services South African Police Service South Africa Supply Chain Management Standard Chart of Accounts Standing Committee on Public Accounts Socio-Economic Development Service Level Agreement Specific, Measurable, Attainable, Realistic & Time-Bound Small Medium Micro Enterprise Traditional Horse Racing Terms of Reference Totalisator 7

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12 PART A: STRATEGIC OVERVIEW 1. Vision The Best, Most Efficient and Empowering Gaming Regulator. 2. Mission We commit to promoting a socially responsible industry through regulation, licensing and law enforcement. We will ensure that the Eastern Cape Gaming Industry is conducted honestly and competitively with maximum contribution to society. We will achieve this by providing excellent service to our stakeholders and through facilitating and broadening access to socio-economic benefits to the communities within which we operate. 3. Values The Eastern Cape Gambling and Betting Board s activities and operations will be anchored on the following values in the next five years, and beyond: Value Consultation Friendliness Teamwork Respect Service Delivery Honesty Empowerment Community Development Behaviour How We Will Demonstarte This Keeping stakeholders informed by involving them in decision-making processes on issues which affect them. Encouraging friendly working relationships and a friendly environment. People working together towards achieving common goals and targets. Equal treatment of staff, honesty on organisational issues and nondisclosure of confidential information. Timely and quality professional service to all our stakeholders. Providing open feedback to staff and stakeholders on all issues. Providing training and development to employees and through procurement of services from B-BBEE suppliers and SMMEs. Giving back to our communities. 8

13 4. Legislative and Other Mandates 4.1 Constitutional Mandate Constitution of the Republic of South Africa (Constitution Act No. 108 of 1996), Schedule Legislative Mandate The ECGBB derives its mandate from, and strives towards full implementation and compliance with, the following pieces of legislation that govern the rendering of effective and efficient service delivery: National Gambling Act, 2004 (Act No. 5 of 2004) (as amended) This Act provides for the co-ordination of concurrent national and provincial legislative competence over matters relating to casinos, racing, gambling and wagering, and to provide for the continued regulation of those matters; to establish certain uniform norms and standards applicable to national and provincial regulation and licensing of certain gambling activities; to provide for the creation of additional uniform norms and standards applicable throughout the Republic. Gambling and Betting Act, 1997 (Eastern Cape) (Act No. 5 of 1997) (as amended), and Regulations in terms of this Act (as amended) This Act provides for control over gambling and betting in the Eastern Cape; and for matters connected therewith. This is the Act which establishes the ECGBB. Public Finance Management Act 7 of 1999 and Treasury Regulations This Act regulates financial management in the national and provincial governments; to ensure that all revenue, expenditure, assets and liabilities of those governments are managed efficiently and effectively; to provide for the responsibilities of persons entrusted with financial management in those governments; and to provide for matters connected therewith. The ECGBB is a PFMA schedule 3 entity and as such is obliged to comply with this Act. Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 This Act gives effect to Section 9, read with item 23(1) of schedule 6, of the Constitution of the Republic of South Africa, 1996, so as to prevent and prohibit unfair discrimination and harassment; to promote equality and eliminate unfair discrimination and provide for matters connected therewith. The ECGBB is aligned with the spirit and purpose of the Constitution, and in extension, all legislation delegated to uphold the principles of the Bill of Rights. Preferential Procurement Policy Framework Act 5 of 2000 This Act gives effect to Section 217(3) of the Constitution by providing a framework for the implementation of the procurement policy contemplated in Section 217(2) of the Constitution; and to provide for matters connected therewith. The ECGBB is aligned with the spirit and purpose of the Constitution, and in extension, all legislation delegated to uphold the principles of the Constitution. 9

14 Broad-Based Black Economic Empowerment, 2013 (Act no 46 of 2013) (as amended) This Act establishes a legislative framework for the promotion of Black Economic Empowerment; to empower the Minister to issue codes of good practice and to publish transformation charters; to establish the Black Economic Empowerment Advisory Council; and to provide for matters connected therewith. The ECGBB is aligned to the spirit and purpose of the Constitution, and as a regulator ensures the compliance with all legislation delegated to uphold the principles of the Constitution. Labour Relations Act 66 of 1995 (as amended): This Act governs labour relations and, for that purpose: - Gives effect to Section 27 of the Constitution; - Regulates the organisational rights of trade unions; - Promotes and facilitate collective bargaining at the workplace and at sector level; - Regulates the right to strike and the recourse to lockout in conformity with the Constitution; - Promotes employee participation in decision-making through the establishment of workplace forums; - Provides simple procedures for the resolution of labour disputes through statutory conciliation, mediation and arbitration (for which purpose the Commission for Conciliation, Mediation and Arbitration is established), and through independent alternative dispute resolution services accredited for that purpose; - Establishes the Labour Court and Labour Appeal Court as superior courts, with exclusive jurisdiction to decide matters arising from the Act; - Provides for a simplified procedure for the registration of trade unions and employers' organisations, and to provide for their regulation to ensure democratic practices and proper financial control; - Gives effect to the public international law obligations of the Republic relating to labour relations; and - Amends and repeals certain laws relating to labour relations; and to provide for incidental matters. As such, the ECGBB undertakes to conduct its labour relations and ensure that its licensees conduct their labour relations in a manner which is compliant to this Act. Basic Conditions of Employment Act 75 of 1997 (as amended) This Act gives effect to the right to fair labour practices referred to in Section 23(1) of the Constitution by establishing and making provision for the regulation of basic conditions of employment; and thereby to comply with the obligations of the Republic as a member state of the International Labour Organisation; and to provide for matters connected therewith. As such, the ECGBB undertakes to ensure that its conditions of employment for its staff and that its licensees conditions of employment are aligned to this Act. Employment Equity Act 55 of 1998 (as amended) This Act provides for employment equity and all things incidental thereto. The ECGBB undertakes to ensure compliance with this Act and the Constitutional provisions in relation thereof, for both the ECGBB and its licencees. 10

15 Skills Development Act 97 of 1998 This Act provides for an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce; to integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act, 1995; to provide for learnerships that lead to recognised occupational qualifications; to provide for the financing of skills development by means of a levy-grant scheme and a National Skills Fund; to provide for and regulate employment services; and to provide for matters connected therewith. Skills Development Levies Act 9 of 1999 This Act provides for the imposition of a skills development levy. In terms of this Act, it is mandatory for the ECGBB, as an employer, to comply with the provisions pertaining to the imposition of levies for skills development and all things incidental thereto. Promotion of Access to Information Act 2 of 2000 This Act gives effect to the Constitutional right of access to any information held by the State and any information that is held by another person and that is required for the exercise or protection of any rights; and to provide for matters connected therewith. The ECGBB, being an organ of state, is obliged to comply with the provisions of this Act as applicable. Promotion of Administrative Justice Act 3 of 2000 This Act gives effect to the right to administrative action that is lawful, reasonable and procedurally fair and to the right to written reasons for administrative action as contemplated in Section 33 of the Constitution and to provide for matters incidental thereto. The ECGBB, being an administrator in terms of this Act, is obliged to comply with the provisions of this Act. National Archives and Records Service of South Africa Act 43 of 1996 This Act provides for a National Archives and Record Service; the proper management and care of the records of governmental bodies; and the preservation and use of a national archival heritage; and to provide for matters connected therewith. As an organ of state, the ECGBB is obliged to comply with the provisions of this Act in crafting and implementing its document management system. The ECGBB is currently constrained in the full implementation of the document management system due to limited budget allocation. Income Tax Act 58 of 1962 (and all provisions of the Taxation Laws Amendment Act, as promulgated from time to time) This Act consolidates the law relating to the taxation of incomes and donations, to provide for the recovery of taxes on persons, to provide for the deduction by employers of amounts from the remuneration of employees in respect of certain tax liabilities of employees, and to provide for the making of provisional tax payments and for the payment into the National Revenue Fund of portions of the normal tax and interest and other charges in respect of such taxes, and to provide for related matters. The ECGBB as an employer is obliged to comply with the provisions of this Act in its administration of taxation matters for the ECGBB and its employees. 11

16 Financial Intelligence Centre Act 38 of 2001 This Act establishes a Financial Intelligence Centre and a Money Laundering Advisory Council in order to combat money laundering activities and the financing of terrorist and related activities; to impose certain duties on institutions and other persons who might be used for money laundering purposes and the financing of terrorist and related activities; to amend the Prevention of Organised Crime Act, 1998, and the Promotion of Access to Information Act, 2000; and to provide for matters connected therewith. The principal objective of this Act is to assist in the identification of the proceeds of unlawful activities and the combating of money laundering activities and the financing of terrorist and related activities. As a regulator of the provincial gambling industry, the ECGBB is obliged to ensure that the provincial gambling industry complies with this Act. 4.3 Policy Mandate Treasury Framework for Strategic Plan and Annual Performance Plans Policy Framework for the Government-Wide Monitoring and Evaluation System King III Report on Corporate Governance for South Africa 2009 Provincial Growth and Development Plan (PGDP) Medium-Term Budget Policy Statement Medium-Term Strategic Framework National and Provincial Programme of Action National Development Plan VISION 2030 Other Provincial and National Treasury guidelines LPM Policy 4.4 Relevant Court Rulings Table 1 in the following page depicts a list of High Court litigation cases against the ECGBB in the Eastern Cape Division, which are of persuasive and binding value to the ECGBB as a provincial gambling regulator and the provincial gambling industry. 12

17 Table 1: Relevant Court Rulings CASE CITATION SUMMARY OF THE CASE AND STATUS ONGOING IMPACT ON THE OPERATIONS OF THE ECGBB Ekuphumleni Resort (Pty) Ltd and Another v Eastern Cape Gambling & Betting Board and Others (402/2007) [2010] ZAECGHC 5 (18 February 2010) The first respondent, ECGBB, awarded a casino licence to the third respondent, Peermont Global Queenstown (Pty) Ltd, and to the fourth respondent, Peermont Global Mthatha (Pty) Ltd for Zone 3 and 4 respectively. The first and second applicants had submitted bids for these licences and had expended considerable sums of money in doing so. Dissatisfied with the award to the third and fourth respondents, they launched legal proceedings seeking an order reviewing and setting aside first respondent s decision in that regard. The documents at the heart of this dispute are the score sheets which the individual members of the Board completed in the course of adjudicating upon the competing bids it received for the casino licences for Zones 3 and 4. The application was upheld with costs. As a provincial gambling regulator, it is imperative that the ECGBB is aware of the attitude of the Courts in addressing cases which arise in the normal scope of the gaming industry and legal precedent created thereby, as it has a binding effect to national courts and tribunals. Vukani Gaming Eastern Cape (Pty) Ltd and Others v Eastern Cape Gambling & Betting Board (606/10) [2010] ZAECGHC (19 August 2010) The applicants brought an application by way of urgency seeking the following order: - Declaring that the second to 66 th applicants ( the affected licence holders ) are entitled in terms of their existing gaming machine site licences, with immediate effect, to operate limited gambling machines in association with the first applicant (as holder of a route operator licence in the Eastern Cape) as envisaged in section 49 (1) (b) of the Eastern Cape Gambling & Betting Act, Act 5 of Directing the respondent to do all things necessary and within its power to allow the exercise of such rights. - Alternatively, an order approving the applications submitted by the affected licence holders to the respondent on 2 January 2010 with regard to the standard site agreements concluded with the first applicant on that date; alternatively directing the respondent to approve the aforementioned applications forthwith. - Alternatively, an order directing the respondent to consider and decide upon each of the affected licence holders applications for the approval of the standard site agreements concluded with the first applicant on 2 January 2010, and submitted to the respondent on that date, within two (2) weeks from the date of this order, alternatively a date determined by this Honourable Court. - Directing the respondents to pay the applicants costs of the application. The application was upheld and the respondent was ordered to pay the costs occasioned thereby. 13

18 5. Situational Analysis This section presents broad information on the performance and broader institutional environment of the ECGBB, based on detailed information gathered in the strategic planning process. The situational analysis of the ECGBB was conducted with a focus on performance and the organisational environment. A summary of key issues facing the ECGBB is provided with important background information on demand for services. A range of explanatory indicators are reflected to indicate the demand for services as well as challenges to be addressed over the next five years. With regard to the organisational environmental analysis and the capacity and structure of the ECGBB, in particular, as well as other internal factors that have informed the development of this five year strategic plan, three business models were utilised to assess organisational capacity. These models are the McKinsey 7 s Business Model, Pestle and the resultant outputs of the two business models, which provided a SWOT analysis of the ECGBB as an organisation. A list of issues to be addressed in the next five years also emerged and is indicated accordingly. 5.1 Performance Environment Key Issues in the Delivery Environment Contribution of the gaming sector to the South African economy 1 In terms of a study conducted by the National Gambling Board in 2012, the total value-added impact of the gambling sector was R21.9 billion nationally. This comprised R10.9 billion in initial or direct GDP contribution (Gross Value Added) with an additional R11 billion spill over (indirect) effect to other sectors of the economy. This total value-added impact of the gambling sector of R21.9 billion represented 0.8% of the GDP of South Africa in 2012, almost equal to the 0.9% measured in It is expected that this contribution of the gambling sector to the economy of approximately 1% will remain at this level for the foreseeable future. The GDP multiplier of the gambling sector is calculated at 2.0. This means that for every R100 value added (GDP) generated by the gambling sector itself, a further R100 value added (GDP) is produced through indirect and induced effects (multiplier) in other sectors of the economy Revenue Contribution to the Provincial Fiscus The ECGBB is the second largest contributor to the provincial fiscus in terms of its tax collections from licensed operators. The total contribution to the provincial fiscus over the past five years (2009/10 to 2013/14) from gambling & betting taxes and fees, including interest received and exclusivity fees, amounted to R586 Million. The ECGBB is projecting revenue collection of approximately R780 Million by 2019/20 for the provincial fiscus as a result of licences issued. Figure 1 in the following page indicates the sources of revenue and revenue collected over the past five years. 1 The analysis of the information in this paragraph has been provided by Casino Association of South Africa (CASA) in 2011/12. 14

19 Figure 1: Revenue Collected for the Eastern Cape Fiscus in the Past Five Years REVENUE COLLECTED OVER THE PAST FIVE YEARS R' , ,000 80,000 60,000 40,000 20,000 0 Casino Taxes Bookmaker Taxes Totalisator Taxes Bingo Taxes LPM Taxes Fees & Interest Exclusivity Fee 2OO9/1O 70,595 2,370 4, ,356 1, O1O/11 73,768 2,272 3, ,187 1,965 42,738 2O11/12 78,887 2,851 3, ,711 2,502 20,000 2O12/13 89,044 3, , O13/14 95,283 3,862 3, ,984 2,884 0 SOURCES OF REVENUE COLLECTED Source: ECGBB Annual Reports *Bingo Operators commenced operations in 2013/ Taxes / Levies Contribution, Per Province Gambling tax is levied and collected by the various provincial licensing authorities. Figure 2 below depicts the total taxes / levies contribution per province over the past five years. The Eastern Cape consistently ranks fourth after Gauteng, KwaZulu-Natal and the Western Cape. Figure 2: Taxes / Levies & Fees Contribution, Per Province over the Past Five Years Source: NGB Gambling Statistics 15

20 Average Return to Player Percentage (RTP%) per gambling mode Return to Player is an average achieved over a significant number of game plays and not each time the gaming machine is played. Figure 3 below depicts Average RTP% per gambling mode over the past five years. Figure 3: Average RTP% per gambling mode over the past five years. Source: NGB Gambling Statistics Decent Employment Opportunities Through Inclusive Growth 2 Employment in the gambling industry requires high levels of integrity and honesty. The Board is responsible for receiving and processing applications for key persons and gambling employees 3. The number of key and gambling employees has increased in response to the continued development of the LPM industry. The gambling industry continues to create jobs, promote tourism and facilitate and contribute to significant infrastructural development and investments. In the financial year 2013/14 the industry employed an additional 602 people and contributed to local economic development. In 2013/14 more than 6.3 million people visited provincial casinos, making them key facilitators of tourism. Bingo operators have already created 180 jobs during the first three quarters of 2014/15. Table 2: in the following page depicts Employment opportunities created by licencees in the past five years. 2 Decent employment opportunities through inclusive growth. This responds to National Outcomes 4 and implementation of NDP. 3 Key employees refers to managers, supervisors, pit bosses, in house inspectors, surveillance personnel, the directors of a company or members of the close corporation registered in terms of section 61 of the ECGBB Act. Gambling employees refers to cashiers and ticket-sellers, counting room personnel, dealers and croupiers, machine mechanics, bookmakers clerks, security personnel and others whom the Board consider to be gambling employees. 16

21 Table 2: Employment Opportunities Created by Licensees in the Past Five Years 4 CATEGORY 2009/ / / / /14 Casinos Horse Racing Industry Limited Payout Machines (Including Route Operators) Bingo Halls Shareholding and Empowerment within the Gambling Industry The ECGBB, in its capacity as both an organ of state as well as a public entity, is committed to promoting Broad-Based Black Economic Empowerment within the province. In this regard the ECGBB has set a target of Level Two by 31 December 2015 for existing licensees and a revised target of Level 2 (or such level as determined by the National Gambling Policy Council in terms of the amended Codes) for new licences. This is in addition to the target groups essential minimum requirement of local PDI shareholding ranging from 26% to 51% effective economic interest and management control for every licence issued, save for Type A sites. This has significantly contributed to new entrants into the gaming sphere and is further enhanced by regulations which require that 60% of limited payout machines in the province must be in the hands of PDIs. 4 Employment opportunities created by licensees in Table 2 represent only registered employees performing gambling-related duties. 17

22 Trusts Established in terms of Licence Conditions The establishment of Trusts by licence holders has been utilised as a mechanism to contribute to communities who are in the immediate vicinity where licensees operate. The intention and strategy of the Board is to ensure that licensees effectively play a role of community development which is characterised by sustainable projects and equal opportunities. Consequently, the following Trusts have been established: NO NAME OF THE TRUST 1 Eastern Cape Educational Trust ESTABLISHED BY OBJECTIVES OF THE TRUST VALUE OF INVESTMENT Vukani Gaming EC (Pty) Ltd 2 Amatola Trust Hemingways Casino 3 Boardwalk Community Development Trust Boardwalk & Entertainment World Casino (& Fish River Sun) Provision of scholarships, bursaries and awards for study, research and teaching to benefit the community of the Eastern Cape. Provision of health care services to the poor and needy To obtain funds, assets and/or donations and to utilise the capital and income from the assets of the Trust for the benefit of the beneficiaries To promote and improve the social, economic and educational wellbeing of the beneficiaries, provided that the activities of the Trust shall be limited to public benefit activities An initial R once-off donation in 2005 and another R1m once-off donation in 2012, plus 1% of GGR monthly contribution from 1 April 2015 R10 million once-off donation made in % shareholding in the licensee 4 Mbizana Development Trust Wild Coast Sun International Casino To engage in public benefit activities, but on the basis that the beneficiaries are to apply for funds, assets or other resources for the exclusive benefit of the community To facilitate and stimulate community development initiatives in the Zulukama area in partnership with communities, professionals, business, local government and national and provincial government To promote and create awareness of the social, economic, educational and general welfare needs of the beneficiaries, provided that the activities of the Trust shall be limited to public benefit activities 30% Shareholding in the licensee 5 Zulukama Trust Queens Casino 4.5% shareholding in the licensee 6 African Pioneer Foundation Trust Pioneer Slots Once-off Donation of R1m by April 2016 and 1,15% of GGR thereafter 18

23 Contributions towards Infrastructure Development in the Eastern Cape 5 The gambling industry in general has made significant contributions towards capital investment, infrastructure development, tax payments and employment in South Africa since Between 1997 and 2000, the industry committed fixed capital investments of some R10 billion, which constituted 2.1% of South Africa s total fixed capital investment during that period 6. As a result of the conditions imposed on gambling licensees, these investments reached beyond the development of the immediate gambling premises and resulted in the establishment of new hotels, shopping malls, entertainment and convention centres. Thus, since gambling was legalised in South Africa, casino resorts have added almost hotel rooms to South Africa's tourism infrastructure, developments which would not necessarily have occurred without the inducement provided by the gambling industry. Nationally, the casino industry, with some slot machines, has been responsible for more than R12 billion in new investments that has added more than R36 billion to GDP, including the effects of economic multipliers. In 2013/14 alone, the industry accounted for nearly R2.2 billion in provincial gaming taxes and Value Added Tax (VAT) which, together with company tax, contributed to government revenue 7. Table 3: below depicts Eastern Cape statistics on infrastructure development. Table 3: Eastern Cape Statistics on Infrastructure Development Description Bizana: Wild Coast Sun Casino Port Elizabeth: Boardwalk & Entertainment World Casino East London: Hemingways Casino Queenstown: Queens Casino Date Opened December 1981 October 2000 September December Total Capital Initial Investment R188 Million R484 Million R239 Million R129 Million Re-Investment Year N/A Re-Investment Value R340 Million R1 Billion R400 Million Research and Development Work over the Past Five Years The ECGBB is committed to compiling a reliable body of valid data and research about gambling in the province that will ensure that all decisions relating to gambling are evidence-based. The gambling industry requires rigorous and continuous research due to various factors. These include: Constant technological advances on gaming which require the regulator to be well informed and ready to regulate effectively at all times. Responsibilities of regulators in ensuring that the public is protected, informed and advised against the negative effects of excessive gambling. To this end, there have been six research projects commissioned over the past five years. These are reflected in Table 4 in the following page. 5 Contributions towards infrastructure development in the Eastern Cape address National Outcome The analysis of the information in this paragraph has been provided by Casino Association of South Africa (CASA), 2011/12. 7 The analysis of the information in this paragraph has been provided by Casino Association of South Africa (CASA). 2011/12 19

24 Table 4: ECGBB Commissioned Research during the Past Five Years RESEARCH TOPIC YEAR CONDUCTED KEY FINDINGS KEY RECOMMENDATIONS The Socio- Economic Impact of Legalised Gambling in the Eastern Cape 2009/10 The shift to legalised gambling and growth in the sector has given an additional choice of entertainment to consumers. Legalised gambling has given rise to the eradication of illegal (casino type) gambling. Considerable tax revenue has been generated through legal gambling. Expenditure on CSI programmes has increased. Incomes have been generated, jobs created and tourist attractions established. Responsible gambling campaigns and marketing of ECGBB as the regulator needs to be heightened as 60% of gamblers and 45% of problem gamblers are unaware of any gambling entities/support programmes. Assessment of Gamblers Perceptions of Consumer Protection Processes & Mechanisms in the Gambling Industry of the Eastern Cape 2012/13 As far as additional measures to promote responsible gambling were concerned punters suggested: Removal of large denomination bill acceptors; Imposing mandatory breaks during gambling. Display of time on the screens of electronic gambling machines Displays of limits placed on total expenditure, duration of play per session, expenditure per session played, winnings and losses per session on cards only for personal viewing Establishment of the concept of Gamblers Anonymous in the community Establishing a complaints mechanism in all establishments that ECGBB would monitor 50% of gamblers indicated that they were somewhat satisfied with the effectiveness of awareness campaigns It is necessary to have specific responsible gambling awareness campaigns aimed at this group of gamblers, to be delivered at their workplaces Screening real life stories of effects of irresponsible gambling at gambling sites Developing a gambling card system linked to employed gamblers bank cards so that they can use only a specified amount to gamble per month There should be regular exchanges of ideas between the ECGBB and gambling establishment management on how to balance the interests of gamblers with that of the gambling industry The establishment, as a matter of priority, of a Responsible Gambling Forum comprising industry (gambling machine manufacturers; casino and route operators; gambling establishment management) and government and community leaders Licensee Satisfaction Survey 2012/13 92% of respondents rated the ECGBB above average in the execution of its gambling regulation mandate 84% of the respondents rated the ECGBB s communication as being above average 85% of the respondents rated the ECGBB s response to applications, queries and concerns as being above Since the majority of the regular gamblers surveyed at all gambling establishment categories were in full-time employment, there is a need to have a specific responsible gambling awareness campaign that is targeted at this group of gamblers at their workplaces 20

25 average 89% of respondents rated the ECGBB s alignment with the provisions of the Act and the objectives of the industry as being above average The Status of Traditional Horse Racing in the Eastern Cape 2012/13 Traditional horse racing is commonly practiced in the local municipalities of Ngqushwa (Peddie), Mbashe (Idutywa), Nkonkobe (Fort Beaufort/Alice), Mnquma (Butterworth /Centane) and Buffalo City Metropole (King William s Town) in the Amathole District Municipality. Traditional horse racing is not limited to the Eastern Cape and is also practiced in both KwaZulu-Natal and Lesotho Historically traditional horse racing was used as a form of cultural entertainment Three styles are practiced: umphalo (speed/turf/galloping), umhambo (tripple) and umkhwelo (endurance) A number of clubs and associations have been established in order to facilitate mdyarho (high speed races) events. These vary considerably in size, focus and organisation A policy should be developed in order to support and enhance traditional horse racing in the province A policy should be developed in order to support and enhance traditional horse racing in the province Implement education projects to improve horse care and rider safety Assessment of the potential for establishing jockey training programmes based on the current knowledge system Ensure cooperation between government departments in order to support the enhancement of traditional horse racing, including other public entities and municipalities Conduct a detailed investigation into how the sport can be developed as a tourism product Performance Survey of the ECGBB 2013/14 ECGBB should provide more advance notice of audits, additional support in preparing information for audits and more feedback ECGBB must strengthen efforts to combat illegal gambling through involvement of the industry and members of the public Greater visibility of the ECGBB and strategic partnerships with stakeholders, including SAPS Improve consumer protection and public education programmes Speed up the licensing process and reduce the red tape associated with licence applications Review specific systems processed and regulations Licensees indicated that they would benefit from support in developing CSI programmes Moreover, licensees need to accrue maximum benefit through partnering with others in the Industry Identification of meaningful staff training has also been identified as an area where licensees require guidance ECGBB should do more to detect illegal gambling and should respond decisively to licensee s reports of illegal gambling Improved communication via SMS technology wherein licensees are informed well in advance on inspection/audit dates 21

26 regarding penalties and taxes Licensees have indicated they would benefit from support in developing CSI programmes - accruing maximal benefit through partnering with other in the industry. Of the sampled 498 respondents, 49 (0.7%) to 346(5.3%) people have serious gaming and betting-related problems, which have led to suicidal thoughts Not less than 13 and not more than 228 persons could have gambled at some time during working hours Up to 15% (981) of staff members from head offices engaged in gambling activities on a weekly basis One person indicated that s/he spent up to R10000 per month and another indicated the highest single amount placed on a bet was R4000 Departmental petty cash has been used by some employees to finance gambling activities More than a third of respondents saw gambling as their best hope of solving their financial problems (38%) Prevalence of Gambling and Betting Among Head Office Staff at Eastern Cape Provincial Departments 2013/14 ECGBB should make an effort to mitigate the harms of gambling through intensive responsible gambling awareness campaigns for government employees of the state, including various communities, as it does with increasing access to gaming opportunities in the province Exclusion and self-exclusion programmes that are currently being implemented by licensed gambling operators must be made available or shared with all employees of the Eastern Cape provincial government administration Financial management programmes at the workplace should from time to time cover awareness regarding the dangers of attempting to use gambling as a means to augment one s salary Roll out the research survey to include all other budget programmes, as well as local and district municipalities Target service orientated sectors like education, police, health, etc. to determine the prevalence of gambling and loss of productivity in the work place 22

27 Socio-Economic Development and Empowerment Activities Over the Past Five Years During the 2011 GRAF Conference at Dar ES Salaam in Tanzania, the Chairperson of the Eastern Cape Gambling and Betting Board addressed delegates on the role of regulators as agents of socio-economic change. The Chairperson pointed out that: regulators should not be satisfied with playing just this role and that we should seek to enhance the relevance of our role to the communities in which we perform our function as regulator. We should seek to balance the negative impacts of gambling by seeking, both through our own budget allocations and through the very proceeds of gambling, to be agents of real change in the communities in which we operate. (2011 May) It is against this background that the ECGBB s socio-economic development initiatives are aimed at achieving and sustaining positive socio-economic growth and upliftment of the communities in which the organisation operates, especially in communities that have been designated as the most impoverished in terms of the Eastern Cape Anti-Poverty Strategy. Through various community interventions, ECGBB s effective community re-investment initiatives will further reinforce its values and vision, and achieve its strategic objectives. To this end, the ECGBB funded and supported various community projects as part of contributing to the implementation of the Eastern Cape Anti-Poverty Initiatives. A table detailing ECGBB s socio-economic development and empowering activities is attached hereto as Annexure: A ECGBB supported and established a computer lab with 18 computers at Sunduza Junior Secondary School - Sterkspruit Before support: ECDC in anti-poverty site at Qebe village - Ngcobo After support: ECDC in anti-poverty site at Qebe village - Ngcobo 23

28 Before support: ECDC non anti-poverty site at Qelane village - Mthatha After support: ECDC non anti-poverty site at Qelane village - Mthatha Before support: ECDC in anti-poverty site at Bholani village - Port St Johns After support: ECDC in anti-poverty site at Bholani village - Port St Johns After support: Community garden in anti-poverty site at Ngqinisa village - Buffalo City. Supported with fencing, Jojo tank, water generator, implements & sprinkling materials 24

29 Traditional Horse Racing in the Eastern Cape The Board has not regulated or provided support to THR activities in the province. However, research was conducted during the 2012/13 financial year into the status of traditional horse racing in the province. The research report was presented to the Board and accepted in principle. The key findings of the report include: THR is a cultural and traditional practice or sport, with distinctive training methods, riding styles. It is characterised by certain undocumented rules and horse care methods and is a very popular sport and recreational activity among rural communities in the Eastern Cape. A number of government departments and the private sector have expressed an interest in supporting and promoting THR as well as developing and promoting THR as a tourism product. THR is currently not guided by any existing legislation or policies, but is mainly organised through traditional knowledge passed on through generations in horse owning families. There is therefore a need to develop a policy to regulate and standardise THR in the Eastern Cape that would harness the development of socio-economic opportunities and allow THR to be recognised as one of the niche tourism products of the province. During a strategic review and conversation session of the Board, it was resolved that THR activities in the province must be supported and enhanced as this area of activity is popular with many black African communities in rural areas, who are participating in large numbers. In addition there is a need to transform the industry and ensure that young black African rural jockeys are assisted to access mainstream horse racing and begin to compete competitively with a view towards a potential career opportunity. 25

30 In addressing and responding to this matter, the following has been implemented: A draft THR policy has been developed based on the research that was conducted by the ECGBB, in consultation with the Eastern Cape Department of Sports, Recreation, Arts and Culture, Eastern Cape Parks and Tourism Agency, in consultation with THR communities, horse owners, trainers, and the leadership of THR racing. The purpose of the draft policy is to regulate and standardise traditional/indigenous and recreational sports in the Eastern Cape that would harness the development of socio-economic opportunities for participants, owners of traditional horses and their communities. Consultations took place in all five district in the province where THR is prevalent - Joe Gqabi, Chris Hani, Alfred Nzo, Amathole and OR Tambo. It is anticipated that a formal THR policy will be finalised by the end of the 2014/15 financial year. 26

31 5.1.2 Licensing and Regulatory Services of the ECGBB Background Information on the Demand for Services This section deals with significant background information on the demand for services and other factors that have informed the development of this Five Year Strategic Plan. The ECGBB creates opportunities for the industry to apply for different types of gambling licences and registration certificates in terms of the Act. A Request for Proposal (RFP) is published inviting applicants to apply for various types of licences. Other applications do not have prescribed manner of submission and are submitted through filling out application forms as agreed with the Board from time to time. The purpose of the subsequent investigation is to provide the Board with relevant information relating to the suitability of the applicant or any other matter the Board may deem necessary, in order to properly consider the application, as contemplated in relevant sections of the Act. The following activities are therefore implemented by the ECGBB: Review the applicant's supporting documentation (and assertions made therein) included in their application for such licences to establish if the information truly reflects the integrity and financial position of the applicant and related parties; Ensure that the applicant and related parties are in compliance with the respective laws in terms of the National Gambling Act, as well as other relevant statutory and ethical codes of conduct; Gather and assess relevant information about the applicant with the objective of making informed recommendations to the Board in respect of the suitability of the applicant, with reference to criteria spelled out in the applicable gambling legislation; Facilitate the registration of all applicants and awarding of registration certificates to successful applicants. The following types of gambling licencesare therefore awarded to qualified applicants in terms of the ECGBB Act: Casino Licenses The Eastern Cape has been allocated five casino licences out of a total of 40 such licences allocated throughout the country. The ECGBB allocated the provincial licences to five demarcated zones in an endeavour to ensure a measure of geographic spread in the distribution of casino gambling activities. With regard to the provision and issuing of casino licences, there have been no changes during the period under review as the last casino licence in Zone 4 is yet to be awarded. Boardwalk & Entertainment World Casino Hemingways Casino Queens Casino Wild Coast Sun Casino 27

32 Table 5 below depicts the casino licences that are currently in effect in the province, including their expiry dates. Table 5: Eastern Cape Casinos per zone or Municipal Boundaries Zone Casino Location Initial issue Zone 1 Boardwalk & Entertainment World Casino Term of Licence Expiry Date Port Elizabeth Years 2025 Zone 2 Hemingways Casino East London Years 2026 Zone 3 Queens Casino Queenstown Years 2017 Zone 4 Not Yet Awarded Zone 4 N/A N/A N/A Zone 5 Wild Coast Sun Casino Mzamba Bizana Years 2019 Figure 4 below depicts the location of the Eastern Cape s four existing casinos and the boundaries of the regional zones, as designated by the ECGBB. Figure 4: Map of Eastern Cape Showing Casino Licence Zones and Locations It is evident that the casino component of the Eastern Cape gambling industry is significant, employing no less than 1101 people in permanent and temporary jobs as at the end of the 2013/14 financial year. Almost R2.1 billion has been invested in the gaming industry in the province, which attracted over 6.3 million visitors during 2013/14. Casino operations generated gross gaming revenues of R1.2 billion and contributed R95.3 million to the Provincial Revenue Fund during 2013/14. An overall profile of operating Eastern Cape casinos is depicted in Table 6 in the following page. 28

33 Table 6: Description Profile of Operating Eastern Cape Casinos Bizana: Wild Coast Sun Casino Port Elizabeth: Boardwalk & Entertainment World Casino East London: Hemingways Casino Queenstown: Queens Casino Date Opened December 1981 October 2010 September 2001 December 2007 Operator Management Company Transkei Sun International Ltd Sun International Management Ltd Emfuleni Resorts (Pty) Ltd Sun International Management Ltd Tsogo Sun Emonti (Pty) Ltd Tsogo Sun Casino Management Co Lukhanji Leisure (Pty) Ltd Tsogo Sun Casino Management Co Registered Employees Permanent Casual Outsourced Slot Machines Tables Visitors in 2013/ Investment R340 Million R1 Billion R400 Million R129 Million Route and Site Licence Operations The Eastern Cape has been allocated 6000 Limited Payout Machines. Apart from casino license operations, the provincial gambling industry also consists of route and site license operations. These operations are located at recreational and leisure amenities such as hotels, taverns, clubs, pubs and sports bars 9. To date, the ECGBB has awarded two route operator licences in terms of Section 49 of Act. Vukani Gaming Eastern Cape (Pty) Ltd, trading as V-Slots, has established 154 site licences across the province and achieved a full roll-out of 946 machines. The second route operator, Pioneer Slots (Pty) Ltd, has also been licensed to operate 1000 LPMs and has since rolled out 332 LPMs at 55 operational sites as at 31 March Route and site operations generated gross gaming revenues of R189.8 million and contributed R19 million to the Provincial Revenue Fund during 2013/14. Both route operator licences are valid for a period of 15 years. Subsequent to the legislative amendments to the regulations on LPMs, the Board advertised and awarded a new form of Site Licence, namely, Type C (6-15 LPMs) Site Licence during 2014/15 financial year. This is in addition to the existing Type A (3-5 LPMs) and Type B (20-40 LPMs) Site Licences. Furthermore, the Board recently commissioned a socio-economic impact study following which a decision will be made on whether to increase the roll-out of LPMs from 2000 in the province as per the requirements of Regulation 59 (3) of the Regulations to the Eastern Cape Gambling and Betting Act, 1997 (Act No.5 of 1997) (as amended) (the Act). An overall profile of licensed Eastern Cape Route Operators is depicted in Table 7 in the following page. 8 The information has been provided by Casino Association of South Africa (CASA), 2011/12. 9 Regulation 60(3) of the ECGBB Regulations indicates that limited gambling machine site licences may be granted to a wide range of facilities, including sporting or social clubs, licensed taverns and shebeens, racecourses, bookmakers outlets, totalisator outlets, hotels and nightclubs, licensed sports bars, bingo halls, pool or snooker establishments and licensed bars. 29

34 Table 7: Profile of the Eastern Cape RO and LPMs Description Vukani Gaming Eastern Cape (Pty) Ltd Pioneer Slots (Pty) Ltd Date Licence Issued 29/03/ /03/2013 Date Licence Expires 31/03/ /02/2028 Number Of Sites Licensed Registered Employees: Route Operator LPMS: Site A LPMS: Site B LPMS: Site C 0 0 Total LPMs: Site: A Site: B Site: C 0 0 Bookmaker, Totalisator and Horse racing Activities Betting activities from related horse racing activities are conducted by eight registered bookmakers in the province who operate 16 branches where bets can be placed. The bookmaking industry has seen a steady growth from 6 in 2009/10 to 8 in 2013/14, in terms of bookmaker licences, with a further increase in the number of branches opened. Sports betting also continue to grow in popularity despite delays in legislative amendments to zero rate sports betting. The horse racing industry remains a significant source of employment and provides access to a wide range of specialised job opportunities supported by comprehensive training and skills development programmes conducted by the racecourse operator. Sports betting and horse racing operations generated gross gaming revenues of R163 million and contributed R7.3 million to the Provincial Revenue Fund during 2013/14. An overall profile of licensed Eastern Cape bookmakers is depicted in Table 8 in the following page. 30

35 Date Licence Expiry 22/06/ /12/ /12/ /08/ /10/ /12/ /03/ /10/2019 Employees Permanent Casual Total Table 8: Profile of the Eastern Cape BM industry Licensed Bookmakers Hollywood Sportsbook (Pty) Ltd t/a Hollywood Bets Marshalls World of Sport (Pty) Ltd t/a Marshalls World of Sport WH Van Der Vyver (Pty) Ltd t/a Marshalls World of Sport Vincent Tattersall s CC t/a Vincent Tattersalls Lucky Bet (Pty) Ltd t/a Lucky bet Dexter Dealers CC t/a Playa Vbetsa EC (Pty) Ltd t/a Vbet Fortuneline (Pty) Ltd t/a Afribet Date Licence Issued 20/12/ /03/ /01/ /08/ /10/ /01/ /04/ /10/2014 EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 31

36 The ECGBB has also licensed Phumelela Gaming and Leisure Ltd to operate a race course and totalisator in the province. Operations extend to 23 totalisator branches and agencies. Phumelela Gaming and Leisure Ltd currently operates the Fairview Racecourse in Port Elizabeth, having closed down the Arlington Racecourse in 2013, also in Port Elizabeth. The totalisator and race course licensees are depicted in Table 9 below. Table 9: Profile of the Eastern Cape Tote and Racecourse Licensed Totalisator and Race Course Operator Phumelela - Totalisator (13 Branches & 8 Agencies) Fairview Race Course Total Date License Issued 21/12/ /12/2010 Date License Expiry 20/12/ /12/2015 Registered Employees Permanent Casual Bingo Licences A feasibility study was commissioned in 2012 to inform the introduction of bingo as a new form of gambling in the Eastern Cape. The outcomes of the study influenced the development of a policy framework that culminated in 15 bingo licences being allocated in the province. During the 2012/13 financial year six bingo licences were awarded and a further eight licences were awarded during the 2014/15 financial year. An overall profile of operational Eastern Cape bingos is depicted in Table 10 below. Table 10: Profile of Eastern Cape Bingo Halls Licensed Bingo Halls Galaxy PE Bingo Royale Port Elizabeth (Pty) Ltd Galaxy EL Bingo Royale Buffalo City CBD (Pty) Ltd Ritz Mthatha (Pty) Ltd Bingo Royale Jeffrey s Bay Total Date Permanent (Provisional) 10 Licence Issued 19/03/2014 (01/10/2013) 05/09/ /03/2014 (01/10/2013) 19/09/ /12/2013 (30/09/2013) Date Licence Expiry 18/03/2029 (04/09/2014) 04/09/ /03/2029 (18/09/2014) 18/09/ /12/2028 (16/03/2015) Registered Employees Permanent Temporary ( ) Represents provisional license issued. 32

37 Indicators that Reflect Demand for Services Below is the range of explanatory indicators that reflect the demand for services to be addressed by Investigations and Licensing Administration. Some of the indicators are considered as key selected performance indicators with stretch targets while others are reporting indicators over which the organisation may not have control. New Licence applications to be investigated; New Licences to be issued; Certificates of suitability to be issued; Temporary and permanent employee registration certificates to be issued; Public hearings to be conducted Challenges to be addressed during the next five years electoral period The nature of the challenges to be addressed in implementing investigations and licensing administration include the following: Absence of policy that determines thresholds for issuing of licences e.g. (bookmakers, totalisator, race course); Potential litigation against the Board by unsuccessfull applicants; Automation of the investigation and licensing processes; Non-responsiveness of other public entities, agencies and district and local municipalities through inter-governmental structures regarding the awarding of various types of licences to ensure appropriate synergies within the province Audit and Compliance Services Background Information and Key Services. Following the allocation of licences to qualifying operators, the signing of conditions of licence and the commencement of gambling operations, audit and compliance services ensure adherence to legislative and other requirements by licensees regarding collection of taxes. The following services are then demanded by the industry and provided by the ECGBB: Provision of quality assurance on the completeness, accuracy and validity of taxes and fees; Provision of assurance on adherence to conditions of licence, bid commitments, FICA and ECGBB legislation by inspecting, corroborating, enquiring and confirming the completeness, accuracy and validity of information, and reporting the findings; Provision of quality assurance on the functionality, accuracy, and adherence of the gaming devices or equipment to ECGBB legislation, technical standards, and other relevant standards; Assessing the viability of the licensees operations by analysing their annual financial statements; Provision of assurance on the review of the licensees internal control systems and procedure manuals. 33

38 Indicators that reflect the demand for services to be addressed in implementing Audit and Compliance Services Below is the range of explanatory indicators that reflect the demand for services to be addressed by Audit and Compliance. Some of the indicators are considered as key selected performance indicators with stretch targets while others are reporting indicators over which the organisation may not have control. These include: Compliance audits conducted; Revenue audits conducted; Annual financial statements reviews; Review of quarterly reports in terms of the conditions of license; Systems audit conducted; Environmental audits conducted; Compliance Barometer Developed and Implemented to determine the extent of compliance by the Industry Challenges to be addressed in implementing Audit and Compliance Services for the next five year electoral period. The nature of the challenges to be addressed in implementing Audit and Compliance Services include the following: Lack of automated audit tools; Non-compliance with the requirements of license conditions by operators / licensees; Increasing number of gaming sites to be audited against declining budget allocation from the provincial Treasury; Absence of a compliance barometer to determine the extent of compliance by the Industry regarding bid commitments, licence conditions, the ECGBB Act and other pieces of legislation Law Enforcement and Gaming Control Services Background Information and Key Services In eradicating all forms of illegal gambling (slot machines/on-line gambling) and unfair competition, as well as protecting both operators and punters from unscrupulous gambling operators, the following activities are rendered by the ECGBB to ensure all licence holders and registrants comply with gambling laws, regulations, rules and conditions of licence: Conducting sweeps and investigations of illegal gambling operations, illegal racing, internet or online gambling and affiliated syndicates; Seizure and destruction of illegal gambling equipment; Verifying and ensuring the integrity of all systems and procedures pertaining to gambling devices and table games; Evaluating all surveillance systems and equipment; Liaising with all certified testing laboratories and manufacturers; Controlling the movement of gambling devices within the province; Liaison with national and provincial gambling boards; Co-ordinating and liaising with all local authorities; Testing of gambling devices and system; Assess the Integrity of all on-line systems; Oversee destruction of gambling equipment and devices; Opening and closures of licensed establishments. 34

39 Indicators that reflect the demand for services to be addressed in implementing Law Enforcement and Gaming Control Services. Below is the range of explanatory indicators that reflect the demand for services to be addressed by Law Enforcement and Gaming Control. Some of the indicators are considered as key selected performance indicators with stretch targets while others are reporting indicators that the organisation may not have control of. These include: Sweeps conducted to detect illegal gambling throughout the province, and facilitating the process of procesecuting of the illegal operators; Inspections and verifications conducted at all licensees; Investigate and report on the third third-party exclusions and the pattern of these indicators; Investigate and resolve punter disputes received by the ECGBB; Reports on the integrity of on line sytems utilised by the Industry; Gambling devices and sytems tested; Licensed establishments closed; Report on the value of gambling equipment and devices confisticated and destroyed Challenges to be addressed in implementing Law Enforcement and Gaming Control for the next five year electoral period. The nature of the challenges to be addressed in implementing Law Enforcement and Gaming Control Services include: Technological advancement in the gaming industry against decreasing budget; Non-prioritisation of illegal gambling by some law enforcement agencies and the judicial system; Leakage of information during the process of closing down illegal gambling operations; Limited staff numbers to address the demand of increasing number of licensees that require statutory compliance inspections; Non-collaboraton with other agencies or public entities of DEDEAT, including DEDEAT itself, to access human resources that are available in districts in order to work jointly with the sub-unit to implement the required services; Absence of hotline facilities to allow the public to report illegal gambling activities and operations in the province, as well as the inability to work and collaborate with other provincial organisations that have call centres to allow the public to report such illegal activities Consumer Protection and Public Education Services Background Information and Key Services The increasing number of licences awarded in the province creates the risk of irresponsible or excessive gaming. Furthermore, a public that is largely uninformed about the mandate and functionality of the ECGBB requires the ECGBB to implement the following services: Conduct educational programmes to both licensees and members of the public with regards to problem, irresponsible and excessive gambling to mitigate gambling addiction; Present programmes regarding gambling-related economic opportunities in the province; Profile legal gambling activities in the province; Utilisation of various platforms to educate the public regarding excessive and irresponsible gambling. 35

40 Indicators that reflect the demand for services to be addressed in implementing consumer protection and public education initiatives Below is the range of explanatory indicators that reflect the demand for services to be addressed by Law Enforcement and Gaming Control. Some of the indicators are considered as key selected performance indicators with stretch targets, while others are reporting indicators over which the organisation may not have control. These include: Public awareness campaigns conducted throughout the province, both in the public and private sector space; Gambling economic opportunities awareness programmes conducted; People reached through responsible gambling campaigns and other platforms; Community print, electronic media and industrial theatre utilised to communicate messages of responsible gambling; Collaboration efforts with the Eastern Cape Department of Social Development to assist persons affected by problem gambling at District Levels Challenges to be addressed in implementing Consumer Protection and Public Education for the next five year electoral period The nature of the challenges to be addressed in implementing Consumer Education and Public Education include: Lack of expertise in the field of public education, social facilitation dialogues with communities and stakeholders to address matters of excessive and irresponsible gambling; Non-availability of dedicated practitioners for the budget sub-programme as existing personnel are implementing services of Law Enforcement and Gaming Control Socio-Economic Development and Empowering Services Background Information and Key Services Over and above the awarding of different types of licences and the collection of revenue for the provincial fiscus, the ECGBB has the responsibility of identifying and supporting socio-economic development initiatives to empower communities resident in areas compounded by poverty. In addition, ECGBB is committed to focusing on and responding to challenges faced by the youth, women, elderly and people living with disabilities. We are further committed to assisting the Eastern Cape gaming industry to comply with licence conditions that relate to the identification and implementation of a number of CSI projects in the poorest areas in the province. The Board of Directors recently concluded that the CSI work of the ECGBB and that of the industry as a whole is not appropriately profiled and acknowledged. In realising the empowering role of the ECGBB and in particular its vision to be an empowering regulator, the following services are being implemented by the ECGBB: Identifying and supporting socio-economic developmental projects utilising resources of the ECGBB and other partners and stakeholders, and ensuring the sustainability of such projects; Collaborating with other stakeholders and partners to empower communities in areas compounded by poverty with minimal skills to manage projects that are being implemented in those areas; Monitoring, evaluating and reporting on the functionality and sustainability of CSI projects that are supported by the ECGBB; Aligning and prioritising the implementation of SED contributions to the 16 impoverished sites in the Eastern Cape as enshrined in the Eastern Cape provincial anti-poverty strategy; 36

41 Jointly work with other stakeholders in order to enhance the livelihood of communities in the most impoverished areas of the province that have been designated as Anti-Poverty Sites; Profiling all socio-economic development projects implemented by the ECGBB, the gaming industry and trusts established in terms of conditions of licence Indicators that reflect the demand for services to be addressed in implementing Socio- Economic Development And Empowering Services Below is the range of explanatory indicators that reflect the demand for services to be addressed in implementing Socio-Economic Development and Empowering Services. Some of the indicators are considered key selected performance indicators with stretch targets while others are reporting indicators over which the organisation may not have control. These include: Socio-economic development projects implemented in terms of the provincial anti-poverty strategy; Collaboration with other partners in implementing various project to empower youth, women, the elderly and people leaving with disabilities; Functional and sustainable CSI Projects supported by the ECGB; Report on the Empowerment of communities as beneficiaries of CSI of the ECGBB Challenges to be addressed in implementing Socio-Economic Development and Empowering Services for the next five year electoral period Declining budget allocation meant for implementing corporate responsibility functions to impoverished communities in terms of the King Code on Corporate Governance and the CSI Policy of the ECGBB; and Lack of personnel to implement the socio-economic development projects in the most impoverished areas of the province, as stipulated in the Anti-Poverty Strategy of the province, as a result of negative budget allocation Research, Learning and Knowledge Management Services Background Information and Key Services The ECGBB is committed to compiling a reliable body of valid data and research information about gambling in the province that will ensure all decisions relating to gambling are evidence-based. As a regulated industry, the gambling industry requires rigorous and continuous research due to various factors such as technological advances in gaming which needs the regulator to be well informed about such developments in order to regulate effectively. Furthermore, there is acknowledgement that the more the regulator issues out licences and creates access to gaming opportunities within the province, the greater the need to investigate, evaluate and conduct research to mitigate unintended outcomes and consequences in terms of irresponsible and excessive gambling. Finally, the ECGBB as a gambling regulator is also expected to promote the use of research and generation of knowledge in order to make decisions and direct actions to improve research outcomes which are grounded in evidence derived from research. During a strategic review and conversation by the Board, it was resolved that research and development must be enhanced and an appropriate budget be allocated accordingly. The following services are therefore implemented in order to realise the significance of Research, Learning and Knowledge Management: 37

42 Development and commissioning of high-quality research that enables evidence-based advancement of responsible gaming programmes, and problem gambling prevention and treatment; Evaluating and analysing various programmes and processes of the ECGBB in order to determine their functionality, relevance and success in achieving desired outcomes; Development and implementation of an ECGBB Knowledge and Management Strategy; Creation of a platform for effective involvement of the research community, government, strategic partners and other relevant stakeholders; Publicising research findings using different platforms to communicate relevant findings and recommendations of research conducted; and Mobilising research resources by co-partnering with different state agencies and organisations in conducting specific and related research in a joint and collaborative manner Indicators that reflect the demand for services to be addressed in implementing Research and Knowledge Management Services Below is the range of explanatory indicators that reflect the demand for services to be addressed in implementing Research and Knowledge Management Services. Some of the indicators are considered key selected performance indicators with stretch targets while others are reporting indicators over which the Organisation may not have control. These include: Revised Research and Development Strategy of the ECGBB; Development of Knowledge and Management Strategy of the ECGBB; Research work conducted by the ECGBB, in collaboration with other strategic partners and Stakeholders; Research surveys conducted and reported accordingly by the ECGBB; Programmes and processes evaluated, conducted and reported accordingly by the ECGBB. Publication of research findings utilising different platforms including provincial seminars and conferences; Pre-and post-research products monitored for implementation and reported accordingly Challenges to be addressed in implementing Research and Knowledge Management Services for the next five year electoral period The ECGBB has taken important strides forward towards the generation of valid and reliable industryrelated research, these have not been without significant challenges, such as: Limited budget allocation for the Budget Programme; Lack of dedicated personnel to implement research and development function as the two officials that are available are also responsible for Communication and Marketing as well as Designated and Vulnerable Groups Budget Sub-Programme. 38

43 5.2 Organisational Environment With regards to organisational environmental analysis and, in particular, information on the capacity and structure of the ECGBB, including other internal factors that have informed the development of this five year strategic plan, three business models were utilised to assess organisational capacity. These models are Mc Kinsey 7 s Business Model, Pestle and the resultant outputs of the two business models which provided a SWOT analysis of indicators of the ECGBB as an organisation Summary of the Structure of the Institution and Significant Issues The following issues are identified that relate to the current functional structure and/or organogram of the organisation: The organisation is structurally organised in terms of three Budget Programmes and 15 Budget Sub-Programmes. The only changes that are proposed are in the Research and Development Budget Programme which will be called Research, Learning and Knowledge Management Budget Programme, with two Budget Sub-Programmes, Empirical Research and Learning and Knowledge. There are no additional resources regarding the name. This name has also been captured in the Budget Provincial White Book or Public Entity Chapter. Budget Sub-Programme 2.4 is not reflected in the current organisational structure although this budget programme receives a sizeable budget allocation. There are other functions that are significant and are not reflected in the current organisational structure, for example Document Management, etc. The National Treasury Framework requires government departments and public entities to review and develop their organisational structure, as informed by the new strategy for the next electoral cycle. Human Resources Management and Development has been entrusted with this function and with developing a proposal for a new organisational structure, where applicable. Taking into consideration the challenges raised during consultation processes, a final organisational structure with all its narrative will be presented to the HR Committee of the Board and finally to the Board for approval Capacity of the Institution and other Internal Factors The continuing decline in budget allocation for the next three years as indicated by provincial Treasury will impact negatively on the capacity of the ECGBB to perform against the significant growth of the Industry Other Internal Factors In terms of significant and other internal factors, the 2013/14 Report on the Performance Survey was utilised to determine the strengths and weakness of the organisation. The survey was meant to measure the overall performance of the ECGBB as a gambling regulator, including its capacity to implement its responsibilities. Industry perception research has shown that 84% of licensees are satisfied with the organisational performance of the EGBB and that 27% indicated that the ECGBB performed better than during the previous financial year. Another source document that was utilised to complete the SWOT analysis of the organisation was an employee perception and satisfaction survey, which was conducted in June The purpose of this survey was to measure the organisational climate of the ECGBB in terms of various areas or dimensions, including employee satisfaction, organisational culture, work systems and processes, communication across the organisation, employee performance and work environment. The outcomes of the employee satisfaction survey revealed that more than 50% of employees responded positively against various areas of research and survey. The areas of positive response indicated as the strengths of the ECGBB. More than 40% of staff surveyed responded negatively against a number of dimensions and areas that are considered weaknesses, which the ECGBB has to address in the next five years. 39

44 The strengths and weakness of the ECGBB in terms of the employee performance and satisfaction surveys are depicted in Table 11 below. Table: 11: Strengths and Weaknesses of the ECGBB STRENGTHS OF THE ECGBB DIMENSION Employee commitment Training and development opportunities Communications Strategy / values / policy WEAKNESSES OF THE ECGBB DIMENSION Performance management Team work Work systems and processes Compensation, pay, benefits and rewards Organisational culture, leadership and management The weaknesses identified from the SWOT analysis, as listed above, are being addressed by different and relevant budget programmes under Part B of this document. Certainly, for the next five years, the organisation will have to invest more time and energy into addressing matters associated with shared organisational culture, leadership and people management. Some of the other issues raised will be addressed by the Board of Directors in order to find suitable solutions. 40

45 5.3 Description of the strategic planning process The development of the 2015/ /20 Five Year Strategic Plan was informed by a number of processes which are meant to see an improved statutory planning document, with clear strategic goals, objectives, performance indicators and targets for the next five years A two-day workshop was facilitated for all ECGBB staff and management, followed by a second two-day workshop for management only, using the Pestle analysis and Mc Kinsey 7s business model These business models allow participants to discuss the internal and external environment of the organisation The staff workshop was divided into two sessions for each of the two day. The initial session was set aside for group discussions, with two smaller groups created randomly. The first group discussed external environmental factors using the PESTLE analysis model, while the second group utilised the Mc Kinsey 7s business model to discuss internal environmental factors, with a view to agreeing on what the ECGBB needed to change or update While the groups worked on their report-back presentations as a team, individual reporters were appointed to present. Participants were given flips charts and special stationery to record discussions, while some presented feedback in PowerPoint. Each group was provided with the same outcome instruction although they dealt with a different subject. During the second session, presentations were summarised by the facilitator and the programme group leaders were asked to review their discussions in order to include inputs from other groups Based on these engagements, key priorities and high-level strategies were identified for implementation over the next five years. These key priorities and high-level strategies will subsequently be presented to the Board of Directors for additional thoughts to be added, with a view to expand and develop. All the recommended changes in the outcome-oriented strategic goals for the organisation, as well as the respective programme-specific strategic objectives, find expression in the 2015/ /20 Five Year Strategic Plan and 2015/ /18 APP The ECGBB reflected on the provincial industry s performance to inform the targets for the next five years. Direct consumer protection, education, provision of information to the public and research and development emerged as the most important areas to enhance the spirit and intention of the Eastern Cape Gambling and Betting Act The following stakeholders were consulted: All employees of the ECGBB, who were engaged to ensure they have a better understanding of developing the required statutory planning documents; The Board of Directors of the ECGBB; and Industry players, especially those that are regulated by the ECGBB, as facilitated by Strategic Management Services From these engagements, the following issues emerged: A robust discussion on strategic goals and objectives to reflect the new strategic imperatives of the ECGBB Agreement to maintain the three Budget Programmes with 15 Budget Sub- Programmes The only change on the Budget Programme and Sub-Programmes structure relates to Programme Three wherein Budget Sub-Programme General & Adhoc Surveys has been changed to Learning & Knowledge Management The alignment of the new Five Year Strategic Plan of the ECGBB with the third draft of the 2015/ /18 APP, especially with the Strategic Objectives and other imperatives that were planned The alignment of the NDP, National Outcomes and Provincial Priorities was also addressed with a view for these to find expression in the Statutory Planning Documents of the ECGBB, in order to ensure the achievability of national and provincial imperatives. 41

46 5.4 Organisational Structure Figure 5: ECGBB Organisational Structure 42

47 6. STRATEGIC OUTCOME-ORIENTED GOALS OF THE ECGBB This section outlines the ECGBB s strategic goals for the next five years. They represent an overhaul of the previous cycle strategic goals and reflect a new approach that the organisation will take towards service delivery. The strategic outcome-oriented goals have been reviewed and new goals have emerged. They are: 6.1 Excellent, quality and professional corporate services with excellent people and processes, in order to optimise service delivery offering; 6.2 Institutionalised international competitive regulatory system; 6.3 Effective financial and institutional oversight processes and systems for accountability; 6.4 Maximised socio-economic development benefits for communities in the province; and 6.5 Enhanced information, communication, technology and paperless driven organisation. Table 12 in the following page sets out the justification of proposed goals as well as links associated with the proposed outcome oriented goals. 43

48 Table 12: Justification of Strategic Outcome Oriented Goals STRATEGIC GOAL NO STRATEGIC OUTCOME ORIENTED GOAL GOAL STATEMENT 5-YEAR PERFORMANCE MEASURES OF STRATEGIC OUTCOME ORIENTED GOALS JUSTIFICATION LINKS 44 SG 01 Excellent, quality and professional corporate services with excellent people and processes, in order to optimise service delivery offering To achieve corporate services with excellent people, and processes in order to optimise service delivery offering Human Resources Efficiency index score of level 5; Organisational Performance Maturity Index or Level; Supply Chain Management Maturity Level; Service Standards of the ECGBB Developed and Approved; Training and Development of Employees; Report on the Implemention of the Integrated Performance Management System. An enabling environment becomes critical if the organisation is to achieve its objectives. The goal is to ensure that the workforce is highly motivated and capacitated to deliver on expected deliverables with the necessary tools and processes to utilise. Efficiency and accountability on the budget allocated to the organisation is also key to ensuring that the organisation is wellfunctioning. A system of monitoring progress on the achievement of goals and objective should be in place to provide a dashboard on performance information which allows management to take rational and fact-based decisions. Gambling and Betting Act, 1997 (Eastern Cape) (Act No. 5 of 1997) and Regulations in terms of Act 5 of 1997 (as amended); Human Resources Plan of the ECGBB; Public Service regulation 2001 as amended 14th May 2010; Framework for Managing Performance Information; Public Finance Management Act; Teasury Regulations; Employment Equity Act 55 of 1998 (as amended); SG 02 Institutionalised international competitive regulatory system To institutionalise an internationally competitive regulatory system Number of new licence applications investigated; Number of new licences issued; Number of certificates of suitability issued; Importance of developing and creating an organisation that is an employer of choice. The implementation of the ECGBB Act requires the organisation to ensure that the gambling regulatory system is on a par with the best international competitive systems and processes. Labour Relations Act 66 of 1995 (as amended). Gambling and Betting Act, 1997 (Eastern Cape) (Act No. 5 of 1997) and Regulations in terms of Act 5 of 1997 (as amended); Number of temporary and National Gambling Act, 2008 (Act No. 10 of 2008);

49 STRATEGIC GOAL NO STRATEGIC OUTCOME ORIENTED GOAL GOAL STATEMENT 5-YEAR PERFORMANCE MEASURES OF STRATEGIC OUTCOME ORIENTED GOALS JUSTIFICATION LINKS permanent employee registration certificates issued; King III Report; Report on public hearings conducted; National Development Plan, Vission Number compliance audits conducted; Number of revenue audits conducted; Number of environmental audits conducted; EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 45 Number of inspections conducted; Number of sweeps conducted to detect illegal gambling; Reports on cases resolved regarding illegal operations; Number of gambling Awareness programmes conducted; Number of people reached through responsible gambling campaigns and other platforms; Development and Implementation of Compliance Barometer to determine the extent of compliance by the Industry.

50 Public Finance Management Act; A-G Act 12 of 1995; King III Report; National Development Plan vision 2030; Framework for Managing Performance Information; Teasury Regulations; ECGBB s Board Charter. The IGR framework Act No. 13 of 2005 Eastern Cape Anti-poverty strategy National Development Plan, Vision 2030 Promotion of Access to Information Act, 2000 (Act No. 2 of 2000); National and Provincial Archives and Records Services Act and the Eastern Cape Provincial Archives and Records Services Act; EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN STRATEGIC GOAL NO STRATEGIC OUTCOME ORIENTED GOAL GOAL STATEMENT 5-YEAR PERFORMANCE MEASURES OF STRATEGIC OUTCOME ORIENTED GOALS JUSTIFICATION LINKS 46 SG 03 SG 04 SG 05 Effective financial and institutional oversight processes and systems for accountability Maximised socioeconomic development benefits for communities in the province Enhanced information, communication, technology and paperless driven organisation To establish effective financial and institutional oversight processes and systems for accountability. To maximise socioeconomic development benefits for the communities in the Eastern Cape. To enhance and generate an information, communication, technology and paperless driven organisation. Financial Management Capability Model; Clean audit report ; R780 million revenue collection; Number of Accounting authority governance sessions hosted with executive authority; Number of sessions / meetings for sub-committees of the accounting authority - Finance, HR & Remco, Audit & Risk and Compliance Licensing committees. Number of socio-economic projects implemented in terms of the provincial anti-poverty strategy; Report on the functionality and sustainability of CSI projects. Development of knowledge and management strategy of the ECGBB; Empirical Research conducted; Research surveys conducted; Report on research seminars and conference hosted; The requirements of the PFMA Act, King Report and other legislative prescripts compels the organisation to establish sound oversight structures and processes, including reporting and accounting mechanisms to statutory institutions like the provincial legislature King reports recognised stakeholder engagement as essential to good corporate governance The ECGBB contributes to the empowerment of the vulnerable and designated programmes in the province. Furthermore, it jointly works with other stakeholders in order to enhance the livelihood of communities in the most impoverished areas of the province that have been designated as Anti- Poverty Sites. The generation, arrangement and utilisation of information and knowledge in the ECGBB is suboptimal, including the ICT capabilities to support the gambling industry.

51 STRATEGIC GOAL NO STRATEGIC OUTCOME ORIENTED GOAL GOAL STATEMENT 5-YEAR PERFORMANCE MEASURES OF STRATEGIC OUTCOME ORIENTED GOALS JUSTIFICATION LINKS Revised communication and marketing strategy of the ECGBB; The IGR framework Act No. 13 of Platforms utilised to communicate and profile the work of the ECGBB; Communication and marketing policy imperatives implemented; Revised information technology strategy of the ECGBB; EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 47 Developed document management system.

52 48

53 Figure 6: Diagrammatic Representation of the ECGBB Strategy Map 49

54

55 PART B: STRATEGIC OBJECTIVES 8. INTRODUCTION AND BACKGROUND 8.1 Strategic Objectives This section covers the strategic objectives of the ECGBB identified to achieve the set goals for the next five years. The strategic objectives that have been identified should relate to the approved budget programme structure. These strategic objectives are: To develop a highly capable work force of individuals and teams in order to optimise service delivery, including an enabling work-place environment To award different types of gambling licences to suitable and qualified applicants To strengthen effective compliance and adherence with bid commitments, licence conditions, regulations and all relevant and other applicable pieces of legislation To organise and present public education and awareness sessions regarding excessive and irresponsible gambling, including economic opportunities of gaming To guide the development and generation of information within the gambling industry in order to make informed choices and decisions To protect the public and gambling operators from unlicensed gambling operators and illegal competition To implement socio-economic development projects in order to empower the most vulnerable and impoverished communities in the province To promote good corporate governance and financial management systems for accountability purposes. Table 13 in the following page provides a set of strategic objectives of the ECGBB with justification of those objectives, including baseline information and links that are associated with each strategic objective. 50

56 Human Resource Plan Public Service regulation 2001 as amended 14th May 2010; Skills Development Act; Public Finance Management Act; Treasury Regulations; Employment Equity Act 55 of 1998 (as amended); Labour Relations Act 66 of 1995 (as amended); National Outcomes Approach from the Presidency; National Environmental Act. National Development Plan, Vision 2030; National Gambling Act and the Eastern Cape Gambling and Betting Act; National Outcomes Approach from the Presidency; Broad-Based Black EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN Table 13: Justification of Strategic Objectives NO. SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT BASELINE 5-YEAR SELECTED STRATEGIC OBJECTIVES MEASURES JUSTIFICATION LINKS 51 S01 Development of a highly capable work force of individuals and teams To develop a highly capable work force of individuals and teams in order to optimise service delivery, including an enabling workplace environment Employee satisfaction survey conducted with its findings and recommendations; Undefined and undocumented designations to reflect Budget Management Responsibilities, relevant Public Service Administration Act and overall responsibilities of employees. Reach Level 5 index score on Human Resources Efficiency. Ensuring that the workforce is highly motivated and capacitated to deliver expected deliverables with necessary tools and processes to utilise; Development and creation of an organisation that is an employer of choice; Implementation of the National Outcome Number 5 which is development of a skilled and capable workforce to support inclusive growth; Transformation and enhancing women employment in the top management structure of the ECGBB; S02 Awarding different types of gambling licences To award different types of gambling licences to suitable qualified applicants During the last five years, the ECGB issued 284 licences in the following categories: - Casino 3; - Route Operators 2; - Bingo 6; - Bookmakers 7, with branches 27; - Limited Pay out Machines 206 sites; Transformation of the designation to reflect appropriate Budget Programme Responsibilities. 20 licenses issued. in the province by awarding different types of licences to suitable and qualifying applicants to operate gaming Regulating the gaming sector operations; Contribution to the provincial fiscus in terms of taxes and fees disbursed to the provincial Treasury;

57 Facilitate the creation of jobs, both direct and indirect, as a result of the awarding of licences; Facilitate the procurement of goods and services from previous disadvantages individuals (SME & SMME) and enterprise development; National Gambling Act and the Eastern Cape Gambling and Betting Act ECGBB Rules and Regulations Income Tax Act 58 of 1962 (and all provisions of the Taxation Laws Amendment Act as promulgated from time to time); Financial Intelligence Centre Act 38 of 2001; National Environmental Act. NO. SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT BASELINE 5-YEAR SELECTED STRATEGIC OBJECTIVES MEASURES JUSTIFICATION LINKS - Race Course: 1; - Totalizator: 1 with 23 agencies. Empowerment of previously disadvantage individuals and women empowerment; Economic Empowerment Act 53 of 2003 (as amended). EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 52 Implementation of Outcome Number 6 which is implementation of an efficient, competitive and responsive economic infrastructure network. SO3 Strengthen effective compliance and adherence with bid commitments, licence conditions, regulations and relevant pieces of legislation To strengthen effective compliance and adherence with bid commitments, licence conditions, regulations and all relevant and other applicable pieces of legislation During the previous five years 248 compliance audits were conducted by the ECGBB 480 compliance audits conducted; 350 Revenue Audits conducted. Provision of reasonable assurance on the completeness, accuracy and validity of taxes and fees by verifying, recalculating and reporting on the findings; Ensuring adherence to ECGBB legislation; Provision of quality assurance in respect of gaming systems, functionality and accuracy; Assessing the viability of the licensees operations by analysing their financial statements;

58 National Gambling Act and the Eastern Cape Gambling and Betting Act; National Outcomes Approach from the Presidency; National and Provincial Consumer Protection Act. National Gambling Act and the Eastern Cape Gambling and Betting Act; ECGBB Rules and Regulations; South Africa s National Research and Development Strategy. EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN NO. SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT BASELINE 5-YEAR SELECTED STRATEGIC OBJECTIVES MEASURES JUSTIFICATION LINKS 53 SO4 Presentation of public education and information awareness sessions To organise and present public education and awareness sessions regarding excessive and irresponsible gambling mitigation, including economic opportunities of gaming During the previous five years 24 public education and awareness campaigns were conducted by the ECGBB. 50 awareness programmes conducted; 9 million people reached through responsible gambling campaigns; 10 gambling economic opportunities awareness programmes conducted. Review of the licensees internal control systems and procedures. Mitigating the unintended consequences of gambling/compulsive gambling; Educating punters/members of the public who consciously and unconsciously participate in illegal gambling; Providing information to the uninformed public about the mandate of the Board, especially on the differences between legal and illegal gambling practices; SO5 Development and generation of information within the gambling industry in order to make informed choices and decisions To guide the development and generation of information within the gambling industry in order to make informed choices and decisions By the end of the five year term, six research & surveys projects had been concluded. 5 empirical research projects conducted; 5 research surveys conducted; 10 research seminars conducted. Findings and recommendations of research projects performed by Research & Development Unit of the ECGBB, and others. Constant technological advances on gaming which needs the regulator to be constantly on top in order to regulate effectively; Relevant policy formulation is developed to inform appropriate regulatory mechanism or frameworks; Regulatory requirements regarding the increase in a

59 number licences issued; National Gambling Act and the Eastern Cape Gambling and Betting Act; ECGBB Rules and Regulations; Income Tax Act 58 of 1962 (and all provisions of the Taxation Laws Amendment Act as promulgated from time to time); Financial Intelligence Centre Act 38 of National Development Plan, Vision 2013; Eastern Cape Provincial Anti-Poverty Strategy; King III Report of Corporate Governance. EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN NO. SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT BASELINE 5-YEAR SELECTED STRATEGIC OBJECTIVES MEASURES JUSTIFICATION LINKS 54 SO6 Protection of gambling operators from unlicensed gambling operators and illegal competition To protect the public and gambling operators from unlicensed gambling operators and illegal competition 478 inspections were conducted during the last five year period; 22 sweeps were conducted in the local and municipal districts of the Province. 590 Inspections Conducted; 25 Sweeps conducted. Consideration for the issuing of certain types of licences, such as casino licences, that normally require market survey research as well as post casino research survey. Mitigation of all forms of illegal gambling (slot machines/on-line gambling) to protect both operators and punters; Constant technological transformation in the gambling industry that require (types of gaming devices) compliance verification; SO7 Implementation of socio-economic development projects in order to empower communities To implement socioeconomic development projects in order to empower the most vulnerable and impoverished communities in the province 18 socio-economic development initiatives were implemented for the benefit of communities in the impoverished areas of the province. 20 socio-economic development programmes / projects implemented. New forms of gambling recently introduced, such as Type C site licenses and bingo operations. Implementation of the Provincial Anti-poverty Strategy and the National Development Plan, Vision 2013; Achieving and living the vision of the ECGBB which is to be the Best, Most Efficient and Most Empowering Gaming Regulator ; Upliftment of the youth, women, people living with

60 disability and the elderly, which is one of the paramount objectives of the SED Policy of the ECGBB; Public Finance Management Act (PFMA); Auditor General Act No. 12 of 1995; National Treasury Regulations and Internal Audit framework; Internal Audit Standards; King Three Report; National Development Plan Vision EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN NO. SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT BASELINE 5-YEAR SELECTED STRATEGIC OBJECTIVES MEASURES JUSTIFICATION LINKS 55 SO8 Promote good corporate governance and financial management systems for accountability To promote good corporate governance and financial management systems for accountability purposes R522 Million has been collected over the past five years; 5 risk assessments conducted; 5 unqualified audit opinion achieved in the last five years. Responsibility as corporate citizen towards our stakeholders and communities where the ECGBB performs or operates. R780 revenue collected. gambling taxes and fees to the provincial fiscus as required by Collection and depositing of the ECGBB Act; Contribution to the provincial fiscus as required by the ECGBB Act; Application of the relevant Acts, regulations, circulars and internal policies to ensure compliance with funds and budget allocated to the ECGBB.

61 9. Budget Programmes to be Implemented by the ECGBB 9.1 A budget programme is a main division within ECGBB s budget that clearly defined a set of objectives based on the services or functions within the ECGBB s legislative and other mandates. 9.2 It constitutes a management unit established within the ECGBB which is responsible for the delivery of that defined set of services and functions. The term programme relates to the functional divisions created within the context of the budget and designated as a programme in the budget estimates, that is, main division in terms of Section 27(3) (b) of the PFMA. 9.3 A sub-programme is a constituent part of a budget programme, that defines the services or activities which contribute to the achievement of the objective(s) of the programme of which it forms a part. Some of the defined services or activities could include key projects identified by the ECGBB. 9.4 The section below outlines the three budget programmes and budget sub-programmes of the ECGBB: BUDGET PROGRAMMES Programme One: Corporate Services Management and Administration Programme Two: Gambling Regulation and Consumer Protection Programme Three: Research and Development BUDGET PROGRAMME MANAGERS AND OR SENIOR MANAGERS Chief Financial Officer - Senior Manager for Finance and Corporate Services Senior Manager Gambling Regulation and Consumer Protection: Strategic Management Services Manager BUDGET SUB-PROGRAMMES 1.1 Office of the CEO 1.2 Strategic Management Services 1.3 Legal Services and Board Secretariat 1.4 Financial Management 1.5 Human Resources Management and Development 1.6 Socio-Economic Development 1.7 Communication and Marketing 1.8 Designated and Vulnerable Groups 1.9 Information Management and Technology 2.1 Investigation & Licensing Administration 2.2 Law Enforcement and Gaming Control 2.3 Audit and Compliance Services 2.4 Consumer Protection and Public Education 3.1 Empirical Research 3.2 Learning and Knowledge Management 56

62 Equitable Share Allocation Own Revenue TOTAL REVENUE Research and Development Compensation of Employees Goods and Services TOTAL EXPENDITURE TOTAL CAPEX EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 10. OVERALL BUDGET REQUIREMENTS BUDGET PROGRAMME 2011/12 R'000 AUDITED OUTCOMES ADJUSTED APPROPRIATION 2012/13 R' /14 R' /15 R'000 EXPENDITURE ESTIMATE FOR MTEF AND BEYOND 2015/16 R' /17 R' /18 R' /19 R' /20 R'000 REVENUE EXPENDITURE BY PROGRAMME: Corporate Services Management and Administration 2. Gambling Regulation and Consumer Protection EXPENDITURE BY ECONOMIC CLASSIFICATION:

63 10.1 PERFORMANCE AND EXPENDITURE TRENDS Transfers received from DEDEAT increased from R31.2 million in 2011/12 to R42.7 million in 2013/14, due to additional funding allocated for responsible gambling campaigns. Transfers for 2014/15 and 2015/16 specifically have not been adjusted in line with inflation increases. This has caused budget pressures for the Board which will be elaborated on in the programme expenditure narrative that follows Own revenue increased over the period from 2011/12 to 2014/15 due primarily to an increase in recoveries as a result of the Board s determined roll-out of new licenses in the province. (Recoveries are as a result of recoverable costs involved in the investigation and evaluation process pursuant to the issuance of licences.) Recoveries revenue is, however, estimated to decrease from 2015/16 due to a reduction in licensing activity. Board administration fees have increased over the period, as a result of the growth in active licensees, as the tariffs included in the ECGBB Act have not been updated during this period. With the ECGBB Act Amendment Bill these fees are planned to be adjusted upwards in 2015/16, and periodically thereafter, as part of the Board s own revenue enhancement and retention strategy Compensation of Employees has increased over the past three financial periods due to the filling of vacancies and an increase in the approved staff establishment, as a result of an increase in the ECGBB mandate with new licensees to regulate. The staffing pressures will be elaborated on in the programme expenditure narrative that follows Goods and Services were higher in 2011/12 because of the legal fees and settlement of the Zone 4 litigation casino. Expenditure over the three year period from 2012/13 has however shown minimal year-on-year increases due to cost saving initiatives implemented by the Board. These initiatives, together with reduced licensing activity and a more cost-effective responsible gambling campaign, have contributed to lower goods and services costs in the remaining MTEF period Capital expenditure ( Capex ) has been constrained over the preceding three years and continues to be so in the MTEF period. Capex only represents 2% or less of the budget in any period presented. ECGBB will continue to seek funding for required capital expenditure such as expansion of the current building to accommodate the increased staff complement. 58

64 11. BUDGET PROGRAMME ONE: CORPORATE SERVICES MANAGEMENT & ADMINISTRATION 11.1 Budget Programme Purpose The purpose of this programme is to provide corporate administrative and management support services to the organisation and the budget programme, including the Board of Directors, to ensure that the ECGBB mandate is executed, achieved and reported accordingly Budget Programme Description The Budget Programme is comprised of the following sub-programmes: Office of the CEO, Strategic Management Services, Legal Services and Board Secretariat, Financial Management, Human Resources Management and Development, Communication and Marketing, Socio Economic Development, Designated & Vulnerable Groups and Information Management and Technology Key Categories of Personnel The ECGBB does not have key categories of personnel where their trends have to be monitored Priorities for the Next Five Years The following priorities are to be addressed in the next five years: Transformation, representation and employment of women in the senior or executive management structure of the ECGBB Strengthening of the Human Resources Management services and ensuring that HR achieves certain levels of maturity by the end of the five year term cycle Training and capacity building of all ECGBB employees Collaboration with the DEDEAT to access human resources capacity at the district or regional offices of DEDEAT to alleviate challenges and lack of capacity in the ECGBB, as well as collaboration with other strategic partners to mobilise resources outside the budget allocation for certain specific functions Investigation of appropriate models to enhance own revenue generation Collaboration with SETA s in the gaming sector for discretionary grants to access budget for internships, learnerships and other significant programmes Enhancing the Profile of CSI Projects of the ECGBB to demonstrate the empowering role and the corporate social responsibility of the ECGBB Engagement of other public entities, agencies and district municipalities through intergovernmental structures regarding the awarding of various types of licences to ensure appropriate synergies within the province. These structures include provincial administration clusters. 59

65 11.5 SELECTED STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS AND TARGETS FOR BUDGET PROGRAMME ONE: CORPORATE SERVICES MANAGEMENT AND ADMINISTRATION Budget Sub-programme: Human Resources Management and Development Key Performance Indicator NO SHORT TITLE OF STRATEGIC OBJECTIVE Development of a highly capable work force of individuals and teams OBJECTIVE STATEMENT To develop a highly capable work force of individuals and teams in order to optimise service delivery, including an enabling work-place environment PERFORMANCE INDICATORS Human Resources Efficiency Index 11 PREVIOUS FIVE YEAR BASELINE New Indicator TARGET BY 2019/20 Level Realisation of Strategic Objectives The table below provides projects that have to be implemented in order to realise the implementation of strategic objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Transformation Programme to ensure employment of women in the senior or executive management structure of the ECGBB ECGBB Equity Plan and targets Human Resources Management and Development 2 Training and capacity building of all ECGBB employees Training Plan and performance assessments Human Resources Management and Development 3 Collaboration with the DEDEAT to access human resources capacity at the district or regional offices of DEDEAT to alleviate challenges and lack of capacity in the ECGBB DEDEAT group strategic review of 2015/ /20 Human Resources Management and Development 4 Collaboration with SETAs in the gaming sector for discretionary grants to access budget for internship, learnership and other significant programmes Strategic review management session Human Resources Management and Development 11 This refers to the perceived (by end users of HR services) ability of the HR components to strategically assist in the achievement of service delivery goals of the organisation. The index is measured on a scale from 1 (lowest) to 10 (highest) and is based on a DPSA composite questionnaire administered by Human Resources Management and Development Budget Subprogramme. 60

66 Budget Sub-Programme: Socio-Economic Development Key Performance Indicator NO SHORT TITLE OF STRATEGIC OBJECTIVE Implementation of socioeconomic development projects in order to empower communities OBJECTIVE STATEMENT To implement socioeconomic development opportunity projects in order to empower communities that are the most vulnerable and impoverished parts of the province KEY PERFORMANCE INDICATORS Number of socioeconomic development projects conducted PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Realisation of Strategic Objectives The table below reflects projects that have to be implemented in order to realise the implementation of strategic objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO 1 PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME Enhancing the profile of CSI Projects of the ECGBB to demonstrate the empowering role and the corporate social responsibility of the ECGBB EMANATING FROM Board resolutions RESPONSIBLE BUDGET SUB- PROGRAMME Socio-Economic Development Budget Sub-Programme: Financial Management Services Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE Promote good corporate governance and financial management systems for accountability OBJECTIVE STATEMENT To promote good corporate governance and financial management systems for accountability purposes KEY PERFORMANCE INDICATORS Revenue Collected PREVIOUS FIVE YEAR BASELINE R522 Million TARGET BY 2019/20 R780 Million 61

67 Realisation of Strategic Objectives The table below reflects projects that have to be implemented in order to realise the implementation of strategic objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Investigation of appropriate models to enhance own revenue generation Board of Directors, fiscal pressures facing province and the Board Financial Management Services 2 Collaborate and work with DEDEAT and other strategic partners to mobilise resources outside the budget allocation for certain specific functions DEDEAT s Group Strategic Review Exercise Financial Management Services 62

68 TOTAL EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 12. RESOURCE CONSIDERATIONS 63 AUDITED OUTCOMES ADJUSTED APPROPRIATION EXPENDITURE ESTIMATES FOR MTEF & BEYOND BUDGET PROGRAMME 1 AND 2011/ / / / / / / / /20 SUB-PROGRAMMES R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R' Corporate Service Management & Administration 1.1 Office of the CEO Strategic Management Services 1.3 Legal Services and Board Secretariat 1.4 Financial Management Human Resource Management and Development 1.6 Communication and Marketing 1.7 Socio-Economic Development 1.8 Designated and Vulnerable Groups 1.9 Information Management and Technology

69 Compensation of Employees TOTAL CAPEX EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN PROGRAMME 1: ECONOMIC CLASSIFICATION 2011/12 R'000 AUDITED OUTCOMES 2012/13 R' /14 R'000 ADJUSTED 2018/ /20 R'000 R'000 APPROPRIATION EXPENDITURE ESTIMATES FOR MTEF & BEYOND 2014/ / / /18 R'000 R'000 R'000 R' Goods And Services: Administrative Expenses Corporate Social Investment Consumer Protection and Public Education Depreciation Amortisation of Intangible Assets Impairment Losses Legal Costs Marketing and Research Costs Other Operating Expenses Statutory Audit Fees Zone 4 Settlement Loss On Disposal of Property Plant and Equipment TOTAL EXPENDITURE

70 12.1 PERFORMANCE AND EXPENDITURE TRENDS In Programme 1 compensation of employees expenditure has increased significantly since 2011/12 due to the increase in the approved staff establishment and the ECGBB mandate. For the remainder of the MTEF period the corporate services employee costs have merely being increased by cost of living adjustments assuming that all 27 current posts (including the CEO and CFO) are filled. Currently, staff from Programme 1 are utilised to assist in achieving objectives of sub-programme consumer protection, as well as Programme 3 Research and Development. Budget constraints prohibit additional posts at this stage The Programme 1 goods and services budget has decreased every year since 2011/12 and this is a significant barrier to the achievement of stated strategic goals, including becoming a paperless, technology-driven organisation and provision of adequate training and development of staff in order to develop a highly capable workforce. Nonetheless, solutions will continue to be sought in this regard, and revenue enhancement continues to be a focus for the MTEF period and beyond in order to alleviate these pressures The ECGBB operates in a highly litigious environment and legal costs remains a difficult area to constrain, as evidenced by the variability in these costs over the past few years. This risk is to be carefully managed to ensure minimal exposure for the Board. 13. RISK MANAGEMENT Five key risks have been identified that may affect realisation of the strategic objectives stated for Programme 1. For each risk identified the ECGBB indicates how it intends to mitigate its effects. Issues that emerged in the SWOT analysis, especially the threats and weaknesses, have provided the ECGBB with a number of risks that must be mitigated accordingly. NO. Risk Definition / Description Control Measures / Mitigation Plans 1 Lack of full implementation of the retention and succession policy 2 Lack of full implementation of disaster management strategy 3 Insufficient budget to implement the job grading scales and thereby risk of not being an employer of choice 4 Lack of utilisation of financial management systems to their full capability 5 Lack of consistent and full implementation of the integrated performance management system Board approval for full implementation of the policy to be obtained, and management to drive required processes IT governance committee to monitor implementation Continue to motivate for need of more funding, while also seeking out revenue retention and maximisation strategies Business process mapping and elimination of inefficiencies. Automation of processes where possible and adequate training of users Consistency sessions and monitoring to be performed and included as an operational plan target of each sub-programme 65

71 14. BUDGET PROGRAMME TWO: GAMBLING REGULATION & CONSUMER PROTECTION 14.1 Budget Programme Purpose The purpose of this programme is to implement the ECGBB Act and other statutory mandates through conducting investigations, licensing, compliance, revenue and environmental audits and gaming control and law enforcement, as well as protecting and educating consumers and the public about responsible gambling Budget Programme Description The programme is comprised of the following sub-programmes: Investigation & Licensing Administration, Law enforcement and Gaming Control, Audit and Compliance Services and Consumer Protection and Public Education Key Categories of Personnel The ECGBB does not have key categories of personnel where their trends have to be monitored Priorities for the Next Five Years Development and Implementation of Compliance Barometer to determine the extent of compliance by the Industry Therapeutic Interventions Programme, in collaboration with the Eastern Cape Departmement of Social Development, to provide access to families, spouses and relatives of those who are experiencing excessive and irresponsible gambling Collaboration with the industry to displace illegal gambling in collaboration with DEDEAT at district and regional level Automation of various functions within the Budget Programme in collaboration with IT of ECGBB and that of DEDEAT Development of policy that determines threshold for issuing of licences e.g. (bookmakers, totalisator, race course). 66

72 14.5 SELECTED STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS AND TARGETS FOR BUDGET PROGRAMME TWO: GAMBLING REGULATION & CONSUMER PROTECTION Budget Sub-Programme: Investigation & Licensing Administration Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE Awarding different types of gambling licences OBJECTIVE STATEMENT To award different types of gambling licences to suitable qualified applicants KEY PERFORMANCE INDICATORS Number of licences issued PREVIOUS FIVE YEAR BASELINE 12 TARGET BY 2019/ Realisation of Strategic Objectives The table below outlines projects that have to be implemented in order to realise the implementation of Strategic Objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Automation of Investigation and Licensing in collaboration with IT department and that of DEDEAT Board of Directors, DEDEAT s Group Strategic Review Session Investigation & Licensing Administration 2 Development of policy that determines thresholds for issuing of licences e.g. (bookmakers, totalisator, race course) Management Strategic Review Session Investigation & Licensing Administration 3 Engagement of other public entities, agencies and district municipalities through intergovernmental structures regarding the awarding of various types of licences to ensure appropriate synergies within the province Management Strategic Review Session Investigation & Licensing Administration Budget Sub-Programme: Law Enforcement and Gaming Control Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT KEY PERFORMANCE INDICATORS PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Protection of gambling operators from unlicensed gambling operators and illegal competition To protect the public and gambling operators from unlicensed gambling operators and illegal competition Number of inspections conducted Number of sweeps conducted The previous 5 year licenses issued included all the types of licenses that applications were received however, in this new cycle issuing of licenses will be focusing on key licenses such as casinos, bingos and LMP for Type B. 67

73 Realisation of Strategic Objectives The table below outlines projects that have to be implemented in order to realise the implementation of Strategic Objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Automation of Law Enforcement and Gaming Contol in collaboration with IT of ECGBB and that of DEDEAT Board of Directors, DEDEAT s Group Strategic Review Session Law Enforcement and Gaming Control 2 Development of a Provincial Strategy to displace illegal gambling operations and activities Management Strategic Review Session Law Enforcement and Gaming Control 3 Launch a hotline to allow public to report illegal activiities and operations Management Strategic Review Session Law Enforcement and Gaming Control Budget Sub-Programme: Audit and Compliance Service Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT KEY PERFORMANCE INDICATORS PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Strengthen effective compliance and adherence with bid commitments, licence conditions, regulations and relevant pieces of legislation To strengthen effective compliance and adherence with bid commitments, licence conditions, regulations and all relevant and other applicable pieces of legislation Number of compliance audits conducted Number of revenue audits conducted Realisation of Strategic Objectives The table below provides projects that have to be implemented in order to realise the implementation of Strategic Objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET SUB-PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Automation of Audit and Compliance Service in collaboration with IT department and that of DEDEAT Board of Directors, DEDEAT s Group Strategic Review Session and Management Strategic Review Session Audit and Compliance Service 2 Development of a Compliance Barometer and Implementation to determine the extent of compliance by the Industry Management Strategic Review Session Audit and Compliance Service 68

74 Budget Sub-Programme: Consumer Protection and Public Education Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT KEY PERFORMANCE INDICATORS PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Presentation of public education and information awareness sessions To organise and present public education and awareness regarding excessive and irresponsible gambling, and economic opportunities of gaming Number of gambling Awareness Programmes Conducted Number of people reached through responsible gambling campaigns Number of gambling economic opportunity awareness programmes conducted Million people reached 9 Million people reached Realisation of Strategic Objectives The table below provides projects that have to be implemented in order to realise the implementation of Strategic Objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET PROGRAMME EMANATING FROM RESPONSIBLE BUDGET SUB- PROGRAMME 1 Review of the Gambling Consumer Protection Strategy of the ECGBB Management Strategic Review Session Consumer Protection and Public Education 2 Engagement of DEDEAT regarding collaboration efforts to access human capacity at DEDEAT s regional and district offices in order to implement consumer and public awarness campaigns Management Strategic Review Session Consumer Protection and Public Education 3 Training and capacity development on social facilitation, public education and stakeholder and community management skills and capabilities Management Strategic Review Session Consumer Protection and Public Education 69

75 Compensation of Employees Goods and Services Administrative Expenses Consumer Protection And Public Education Marketing And Research Costs Other Operating Expenses Total EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 15. RESOURCE CONSIDERATIONS BUDGET PROGRAMME 2 AND SUB-PROGRAMMES 2. Gambling Regulation and Consumer Protection AUDITED OUTCOMES ADJUSTED APPROPRIATION EXPENDITURE ESTIMATES FOR MTEF & BEYOND 2011/ / / / / / / / /20 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R' Licensing and Investigation Administration Law Enforcement and Gaming Control Audit and Compliance Services Consumer Protection and Public Education Subtotal PROGRAMME 2: ECONOMIC CLASSIFICATION AUDITED OUTCOMES ADJUSTED APPROPRIATION EXPENDITURE ESTIMATES FOR MTEF & BEYOND 2011/ / / / / / / / /20 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000

76 15.1 PERFORMANCE AND EXPENDITURE TRENDS Programme 2 compensation of employees expenditure has increased significantly since 2011/12. This is due to the increase in the approved staff establishment brought about by an increase in the number of licensees, which in turn has increased the ECGBB s regulatory mandate, specifically regarding law enforcement and audit and compliance. For the remainder of the MTEF period, however, the Programme 2 employee costs have merely been increased by cost of living adjustments, assuming that all 23 current posts are filled. Currently staff from Programme 1 as well as Programme 2.2 are utilised to assist in achieving the objectives of subprogramme Consumer Protection. ECGBB has partnered with service providers that will provide maximum impact for the consumer protection and responsible gambling campaign from 2015/16 onwards in order to achieve both value for money and the strategic objectives While the personal establishment has not been increased over MTEF, the additional licences awarded over the past few years should warrant additional investigation, audit and inspection personnel. The Board is identifying and considering opportunities for efficiencies in its processes, including risk-based and technology-assisted regulation The Programme 2 Goods And Services budget has increased every year since 2011/12 to 2014/15 due to evaluation and hearing costs related to the roll-out of new licences in the province, as well as the consumer protection and responsible gambling campaigns. Budget cuts and reduced licensing activity have caused a reduction in the Goods and Services budget over the MTEF period. However, as noted above, plans are in place to mitigate this, including strategic partnerships and cost-effective travel and accommodation at licensees. 71

77 16. RISK MANAGEMENT Five key risks have been identified that may affect realisation of the strategic objectives stated for Programme 2. For each risk identified the ECGBB indicate how it intends to mitigate its effects. Issues that emerged during the SWOT analysis, especially the threats and weaknesses, have identified a number or risks against which the ECGBB must mitigate accordingly. NO Risk Definition / Description Control Measures / Mitigation Plans 1 Possible review of Board's decisions Absence of Document Management Function as critical corporate function to ensure that the documents produced and generated by the ECGBB are properly stored and accounted for in terms of the relevant archiving prescripts Inability to keep abreast of changing needs of the industry (training risk) Inability to detect non-compliance by licensees. Illegal and online gambling Effective communication with applicants Accurate investigation reports Obtaining legal opinion prior to decision making and crafting of RFP and application forms, where necessary Effective decision making at Board level Digibility utilised to archive scanned documents Scanned documents are stored under Compliance Drive Hard copy files are kept in lever-arch files Development of training plans Implemenattion of the performance management system/policy. Conducting compliance audits Conducting regular sweeps Raising awareness through public education campaigns and progammes 72

78 17. BUDGET PROGRAMME THREE: RESEARCH AND DEVELOPMENT 17.1 Budget Programme Purpose The purpose of this programme is to build a strong foundation of valid and reliable empirical research to inform operational, policy advisory and public interest activities such as consumer protection. A robust research agenda is developed and updated annually to reflect evolving research priorities. The articulation of research goals allows the ECGBB to undertake strategic research projects that best support broad regulatory responsibilities Budget Programme Description The budget programme is composed of Empircial Research and Learning and Knowledge Management Sub-Programmes Key Categories of Personnel The ECGBB does not have key categories of personnel where their trends have to be monitored Priorities for the Next Five Years Collaborating and building partnerships with research institutions, different provincial and national departments as well as state agencies to build a credible body of gambling research Implementation of a PhD Programme with a target of four PhD students at two universities in the province Conducting research, as informed be the Research and Development Strategy of the ECGBB Conducting follow-up research on the socio-economic impact of the massifiation of limited payout machines in the province Hosting a number of research seminars as well as a provincial gambling research conference Development and implementation of the ECGBB Knowledge and Management Strategy. 73

79 17.5 STRATEGIC OBJECTIVES, PERFORMANCE INDICATORS AND TARGETS FOR BUDGET PROGRAMME THREE - RESEARCH AND DEVELOPMENT Budget Sub-Programme: Empirical Research Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT KEY PERFORMANCE INDICATORS PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Development and generation of information within the gambling industry in order to make informed choices and decisions To guide the development and generation of information within the gambling industry in order to make informed choices and decisions Number of empirical research conducted Budget Sub-Programme: Learning and Knowledge Management Key Performance Indicators NO SHORT TITLE OF STRATEGIC OBJECTIVE OBJECTIVE STATEMENT KEY PERFORMANCE INDICATORS PREVIOUS FIVE YEAR BASELINE TARGET BY 2019/ Development and generation of information within the gambling industry in order to make informed choices and decisions To guide development and generation of information within the gambling industry in order to make informed choices and decisions Number of Research Surveys Conducted Number of Research Seminars Conducted. 2 5 New indicator Realisation of Strategic Objectives The table below provides projects that have to be implemented in order to realise the implementation of Strategic Objectives. These projects will be planned and reflected in the Operational Plan rather than the Annual Performance Plan. NO PROJECTS TO BE IMPLEMENTED BY THE BUDGET PROGRAMME: 1 Review of the Research and Development Strategy of the ECGBB Hosting a number of research seminars and a 2 provincial gambling research conferences 3 Evaluation of different programmes within the ECGBB to determine their usefulness, effectiveness and return on value EMANATING FROM Management Strategic Review Session Management Strategic Review Session Management Strategic Review Session RESPONSIBLE BUDGET SUB- PROGRAMME Empirical Research Learning and Knowledge Management Empirical Research 4 Publication of research findings and recommendations Collaborative engagements with other 5 national and provincial departments and public entities to jointly conduct research Management Strategic Review Session Management Strategic Review Session Empirical Research Empirical Research 74

80 Budget constraints have caused a year-on-year reduction in the research and development expenditure to 2014/15. As noted previously, Programme 3 does not have a full-time staff complement and objectives are achieved using employees from Programme 1. If budget estimates are amended upwards this will be remedied, however for the MTEF period ECGBB plans to continue seeking funding and strategic partnerships to ensure its research mandate is achieved. EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN 18. RESOURCE CONSIDERATIONS ADJUSTED AUDITED OUTCOMES EXPENDITURE ESTIMATES FOR MTEF & BEYOND APPROPRIATION BUDGET PROGRAMME / / / / / / / / /20 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R' Research and Development Empirical Research Learning and Knowledge Management ECONOMIC CLASSIFICATION Research and Survey Costs AUDITED OUTCOMES ADJUSTED APPROPRIATION EXPENDITURE ESTIMATES FOR MTEF & BEYOND 2011/ / / / / / / / /20 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R' PERFORMANCE AND EXPENDITURE TRENDS

81 19. RISK MANAGEMENT Five key risks have been identified that may affect realisation of the strategic objectives stated for Programme 3. For each risk identified the ECGBB indicates how it intends to mitigate its effects. Issues that emerged in the SWOT analysis, especially the threats and weaknesses, have provided the ECGBB with a number or risks that must be mitigated accordingly. NO Risk Definition / Description Control Measures / Mitigation Plans Absence of Document Management Function as a critical corporate function to ensure that the documents produced and generated by the ECGBB are properly stored and accounted for in terms of the relevant archiving prescripts Staff not being kept abreast with changing needs of the industry Inadequate funding to achieve overall mandate. Loss of information. Digibility utilised to archive scanned documents Development of training plans Implementation of the performance management system/policy Engage DEDEAT and Provincial Treasury annually to allocate more funding Mobilisation of other stakeholders to fund research projects Development of Knowledge and Management Strategy of the ECGBB 76

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83 PART C: LINKS TO OTHER PLANS 20. Links to the long-term infrastructure and other capital plans The Eastern Cape Gambling and Betting Board issues a number of ccasino licences which invariably result in long-term infrastructure investments which is based and aligned to the licence period Infrastructure Development in the Four Casinos Located in the Eastern Cape: Description Bizana: Wild Coast Sun Casino Port Elizabeth: Boardwalk & Entertainment World Casino East London: Hemingways Casino Queenstown: Queens Casino Date opened December 1981 October 2000 September 2001 December 2007 Operator Transkei Sun International Ltd Emfuleni resorts (Pty) Ltd Tsogo Sun Emonti (Pty) Ltd Lukhanji Leisure (Pty) Ltd Management Company Sun International Management Ltd Sun International Management Ltd Tsogo Sun Casino Management Co Tsogo Sun Casino Management Co Total Capital Investment (Rm) Re-Investment (R m) R340 R1000 R Conditional grants The ECGBB is not a recipient of any conditional grants in terms of the Public Finance Management Act the Division of Revenue Act. 22. Public-Private Partnerships Currently ECGBB does not have any public-private-partnerships in terms of Treasury Standards and Norms. 77

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86 Social Development Social Development 2012/ & EASTERN CAPE GAMBLING AND BETTING BOARD 2015/ /20 STRATEGIC PLAN National Youth Development Agency children to be physically developed, nourished and educated R Youth Month Celebrations Port Elizabeth Zamani Training Centre R Supported the centre with sewing machines, steel tables, Polyshell chairs and television sets for the benefit of people living with disabilities King William s Town Loaves & Fishes Network, orphanage home R Supported a professional non-profit organisation, with monthly food parcels for 371 beneficiaries East London Other Ethembeni Old Age Home R Supported with food parcels Mdantsane Designated and Vulnerable Groups 79 Nceduluntu Support Group R Supported with food parcels and toys Abonwabisi Community Home Show time boxing academy Goshen Village - Early Childhood Development Centre Qebe Village - Early Childhood Development Centre R Supported with food parcels and toys R R R In supporting the development of boxing and contributing to healthy lifestyles, ECGBB supported the establishment of a non-aligned boxing gym that assist in training young boxers Supported jungle gym, pre-school mattresses and a Jojo tank for the ECDC Supported jungle gym, pre-school mattresses, a Jojo tank and fencing for the ECDC Reeston, East London Ziphunzana, Duncan Village, East London Designated and Vulnerable Groups Designated and Vulnerable Groups East London Sport Cathcart Ngcobo Early Childhood Development Early Childhood Development 2014/ /15

87 ANNEXURE B: TECHNICAL INDICATOR DESCRIPTIONS This section of the Technical Indicator descriptions will be loaded into the ECGBB website and is Annexure B of the Annual Performance Plan. 80

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90 NATIONAL RESPONSIBLE GAMBLING PROGRAMME TOLL FREE LINE: ECGBB FRAUD PREVENTION TOLL FREE LINE: Province of the EASTERN CAPE ECONOMIC DEVELOPMENT, ENVIRONMENTAL AFFAIRS AND TOURISM