Regulatory compliance

Gaming licences are extremely valuable assets to the group. These are issued for an indefinite period (with the exception of the Eastern Cape-based licences) and are maintained through a strict compliance culture including compliance with all laws and regulations to which the group is subject.

This strict culture of compliance is applied to all aspects of the group's business including areas as diverse as hospitality hygiene, liquor licences, fire and life safety regulations, corruption, insider trading and competition law. Despite the significant cost involved, the group treats compliance as a necessary investment and not an unavoidable cost, and recognises that compliance yields benefits such as an enhanced financial and operational internal control environment.


  2018   2017  
Significant gaming regulation breaches Nil   Nil  
Fines imposed for other regulatory breaches Nil   Nil  
Fines imposed for breaches of law Nil   Nil  


Regulatory compliance

The South African trading environment is highly regulated and compliance with the regulations is critical to our licence to trade. The broader trading environment is becoming increasingly complex and is governed by legislation and policies, much of it relatively new, relating to competition, customer protection, privacy, environmental, health and safety, money laundering, BBBEE and labour issues. A number of statutes provide for monitoring and enforcement by regulatory bodies. The audit and risk committee is updated with all material changes to legislation and regulations twice a year and the board is updated quarterly.

The casino operations are regulated by the provincial gambling boards and, from an oversight perspective, by the National Gambling Board. The standards of regulation within the industry are in line with global best practice. Gaming regulation compliance, which is of particular importance in retaining gaming licences, is achieved through the implementation of internal control procedures and compliance policies, compliance committees, an anonymous tip-off system, interventions with regulators and law enforcement agencies, centralised specialist understanding of the interpretation and application of legislation, internal and external compliance audits and by creating a compliance culture through training. Compliance with the terms of a licence is monitored by the relevant provincial gambling board on an ongoing basis and certain provinces may conduct quarterly, bi-annual and annual inspections. With the exception of licences issued in the Eastern Cape which are issued for a limited period, gaming licences have been issued for an indefinite period, subject to annual renewal by way of the payment of annual licensing fees, and subject to the absence of any disqualifying circumstances.

During the year, the group participated in the public consultation process in respect of proposed legislative and policy amendments which may have a regulatory compliance impact on the group's gaming and hotel operations. The most significant contributions were made in respect of the pending proposed amendments to the National Gambling Act and Policies, the implementation of national registers for excluded persons and gaming equipment, various provincial gambling acts, regulations, provincial gambling board rules, the 41st casino licence, the roll out of additional bingo sites, liquor legislation and the FICA, which may cause more onerous regulatory obligations on gaming. The Minister of Finance proclaimed the commencement of certain provisions of the FICA during 2017 and the group is currently participating in various consultation processes with the FICA and provincial gaming boards regarding a transitional period for the implementation of the amendments to the Act, as well as recent amendments to the regulations. Final implementation is envisaged by March 2019 although the group will align its current processes and policies by October 2018.

Provincial gambling boards have in the recent past started to focus on the monitoring and enforcement of CSI contributions by gaming licencees. BBBEE performance is also stringently monitored and the gaming licencees continuously engage with provincial gambling boards on its performances in this regard.

Tsogo Sun ensures that the group complies with all applicable legislation in all countries in which it operates and, where possible, builds constructive relationships with the regulatory bodies. There were no significant breaches of any legislation and no significant fines imposed during the year.