Cape Town — Trade and Industry Minister Rob Davies has insisted he will not give the go-ahead for any new gambling activity until he has seen the results of an impact-assessment study now under way.

Parliament's trade and industry committee was told last week that the study might indicate the need for legislative changes to close loopholes that had allowed new operations to flourish.

Davies is particularly concerned about the effects accessible forms of gambling such as the national lottery have on the poor who participate in them, even when it is unaffordable.

However, the minister said a balance would have to be found as the provinces relied on revenue from casinos, and their views would have to be considered in any review of policy.

The committee is holding public hearings on gambling activities with a view to presenting Davies's department with a report and recommendations. The hearings relate to the socioeconomic effect of legalised gambling, the effect of misleading advertising, the regulation of cross-border gambling, and the effectiveness of the regulatory environment.

A draft regulation on interactive gambling has been released for public comment. Several gambling operators have made submissions to the committee, and others will do so tomorrow when the hearings continue.

Davies told the committee during a briefing on the department's programmes on Friday that the government needed to review gambling policy.

"At the moment, we have an impact assessment under way. We will look at this report. I have said I am not prepared to sign on to any new gambling activity until I see what that says. Some of the earlier research done by the National Gambling Board in 2003 showed that the gross gambling product in SA was enormously high and way above (that of) countries with a much higher gross domestic product (GDP) per capita than SA."

Stories abound of poor people using much-needed money to buy lottery tickets instead of food.

The benefit that good social causes derive from lottery income has been undermined by delays in the allocation of funds.

Deputy trade and industry director-general Zodwa Ntuli said "proliferation of gambling activities means we are overextending it and especially making it too accessible to the poor who may not be able to afford it.

"We want to control this," Ntuli said.

"We will come up with a policy statement on whether we need to restrict gambling even further or whether we need to take another drastic measure to curb gambling activities in the country."

African National Congress committee member Prof Ben Turok said during the committee's engagement with Davies that gambling operators justified their enterprises on the grounds that they created jobs, were positive for black economic empowerment and provided revenue for the government, but he found this "unacceptable".

A study was conducted this year by the University of SA's bureau of market research together with research staff of the National Gambling Board, but this excluded the lottery, which falls under the National Lotteries Board.

The study found the frequency of casino gambling among adults was 6,3%, substantially lower than the 19,3% who visited casinos in 2003 and the 7,1% of 2005.

Households used 1,34% of their total spending on gambling (including lottery and scratch cards) compared with 1,7% in 2005 and 1,3% in 2002.

The study found that the gambling sector contributed 0,93% both directly and indirectly to total GDP and was responsible for 0,9% of total formal employment.