Gaming company’s chips are down

A gambling company’s attempt to be allowed to operate unallocated gambling machines in the province has been snubbed by the Supreme Court of Appeal (SCA).

The SCA upheld an appeal against an order of the Western Cape High Court and set aside a decision to allocate additional limited payment gambling machines (LPMs) to two licensed operators.

The Western Cape Gambling and Racing Board granted licences to Vukani Gaming Western Cape (Pty) Ltd t/s V-Slots (V-Slots) and Grand Gaming Western Cape (RF) (Pty) Ltd t/s Grand Slots (Grand Slots), to operate the LPMs and their licenses were granted following a Request for Proposals (RFP) and a competitive bidding process.

The Board stated in the RFP that its intention was to permit the operation of 3 000 LPMs by three operators. The RFP, however, reserved to the Board the right to allocate more than 1000 LPMs to each operator in the event that fewer than three operators were licensed. V-Slots and Grand Slots were each allocated 1000 LPMs. In 2017, the Board decided to allocate the unallocated 1000 LPMs to V-Slots and Grand Slots, equally.

Aggrieved by the decision, Goldrush Group Management (Pty) Ltd (Goldrush) launched a review application in 2019 in the high court to set aside the allocation. It contended that the allocation was unlawful since the Board was obliged to advertise the LPMs for allocation to other prospective operators.

At the time of the RFP and bidding process during 2017, Goldrush was not an applicant and did not exist at the time.

In judgment, Judge Glen Goosen said: “The Board explained that the RFP had expressly reserved the right to appoint fewer than three licenced operators and, in that event, to allocate additional LPMs to the licenced operators. It stated that the allocation of the remaining 1000 LPMs, was in accordance with the terms of the RFP. Its decision to appoint only two licenced operators had been taken pursuant to a rigorous selection process with full public participation and remained extant. It was not obliged to invite applications for the award of further route operator licences. Thus, its decision to allocate the remaining LPMs to VSlots and Grand Slots was within its power...

“In its judgment on 20 April 2021, the high court found that Goldrush’s claim to own-interest standing was speculative and hypothetical. Accordingly, the high court concluded, it lacked standing to challenge the Board’s decision. As to the unreasonable delay issue, the high court found that there was no explanation before it for the delay. It found that Goldrush must have known about the decision to allocate the remaining LPMs in December 2017. It concluded that the delay in instituting the review (in March 2019) was unexplained and unreasonable...In this case, there is no suggestion of fraud or irregularity. There is equally no indication of administrative conduct which is manifestly objectionable. The process by which route operators were licensed complied with the statutory requirements. The RFP declared the Board’s intention to appoint three suitably qualified route operators and to allocate to them 1000 LPMs in the first phase of establishing the industry.

Applications were invited and those received were subjected to a rigorous selection process.”

Enquiries to Goldrush were not answered by deadline on Sunday.

Cape Times