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Why Are Phumelela ‘Intent On Court Action’?


Government's displeasure at racing operator decision

Last year Phumelela said the proposed amendment to Gauteng’s gambling regulations could cost it R75m a year while also damaging the local horseracing industry.

Gauteng MEC for Economic Development, Agriculture and Environment, Ms Morakane Mosupyoe,has said that she finds it unfortunate that after months of settlement negotiations, Phumelela Gaming & Leisure, has closed the door for further engagement with her department..

Government has now learnt, as at Friday, 31 January 2020, that Phumelela intends taking the matter to Court.

Ms Morakane Mosupyoe

In a press release the department says that this is regrettable as all Gauteng Thoroughbred Horseracing stakeholders were looking forward to an all-inclusive and lasting solution to the current challenge.

On 1 April 2019, after due legislative process was followed, the then MEC for Economic Development, Mr Lebogang Maile, gazetted the amendment to Regulation 276 of the Gauteng Gambling Regulations, in terms of which the payment of public funds was withdrawn from Phumelela and retained by the Gauteng Provincial fiscus.

Historically, the Gauteng Gambling Board collected levies and paid this over to Phumelela – which is the sole holder of a totalisator and race meeting licence in Gauteng.

The Gauteng government has since reviewed this practice and decided that these public funds will be utilised by the Gauteng government.

Phumelela then decided to take the MEC and Gauteng Gambling Board to Court, to compel the payment of public funds to Phumelela to be used for its benefit. This High Court litigation then brought the parties around the table to discuss how best to manage these funds – for the benefit of the Industry at large.

The MEC and Gauteng Gambling Board were hopeful that an agreement could be reached that enhances transformation within the industry at large, including horseracing (in the hands of Phumelela).

It is regrettable that Phumelela appears to be intent on having this matter kept in the hands of the Courts.

The department believes that this agreement would have accelerated transformation and the implemetation of broader government objectives.

Government hoped to achieve the following:-

1) The increase of black ownership and meaningful participation in Phumelela (itself a product of Government assistance);

2) The creation and adoption of an industry turn-around strategy;

3) The creation of a Trust to develop and benefit Industry stakeholders such as the most vulnerable in the horseracing industry – the groom; and

4) The utilisation of the said public funds to provide satisfactory human settlement for the grooms in and around Gauteng.

The MEC stands by her decision to withdraw public funds from Phumelela and will defend her position in Court.

Notwithstanding these developments, the MEC is hopeful that even at this late hour, reasonableness will prevail.

The MEC remains open to engagement with interested parties for the betterment of the Industry.

Summary of press release issued by Gauteng Department of Economic Development on 4 February 2020
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER
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