Constitutional Court of South Africa Makes Ruling On Gambling Tax Interpretation
Pretoria, South Africa – The Constitutional Court of South Africa has delivered a unanimous judgment regarding the interpretation of gambling tax provisions under the Western Cape Gambling and Racing Act and the Eastern Cape Gambling Act. The case involved two applications from major casino operators challenging whether ‘freeplay’ credits – non-cashable loyalty credits awarded to certain customers – should be included in the taxable revenue upon which gambling taxes are calculated.
The Court refused leave to appeal in both matters, affirming that the dispute was primarily about the proper interpretation of provincial gambling statutes and did not raise constitutional issues warranting its jurisdiction. Justice Kollapen, delivering the judgment, emphasized that “the core question is whether, on a proper interpretation of the Acts, freeplay is included in the definition of ‘adjusted gross revenue’ and thus forms part of taxable revenue.” He clarified, “This is a matter of statutory interpretation, affecting the narrow interests of the parties involved, and does not engage this Court’s constitutional or general jurisdiction.”
The Court also addressed whether the matter raised a point of law of general public importance. It concluded that “the interpretive issue is confined to the specific provisions of the provincial Acts and does not transcend the interests of the parties or impact the wider public,” finding that “nothing indicates that the outcome of this case will significantly affect other casino operators or the public at large.”
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Justice Kollapen further stated, “The purpose of section 167(3)(b)(ii) of the Constitution is to ensure that this Court considers matters of broad societal importance, which this case does not meet, given its narrow scope.” Accordingly, the Court dismissed the applications for leave to appeal, with each party ordered to pay the respondents’ costs, including the costs of two counsel.
This ruling confirms the Court’s stance that disputes over statutory interpretation related to provincial gambling laws are not automatically constitutional issues and that the Court’s jurisdiction is limited to matters of significant public importance or constitutional concern.
The Court notes with regret the passing of Advocate J A Newdigate SC, who prepared submissions for the first respondent in the Western Cape case.
