Game Concepts Limited & Another v National Lotteries & Gaming Regulatory Board & Another (Constitutional Petition 51 of 2017) [2021] UGCC 46 (7 December 2021)

Full Case Text

#### THE REPUBLIC OF UGANDA

# IN THE CONSTITUTIONAL COURT OF UGANDA AT KAMPALA CONSTITUTIONAL PETITION NO. 051 OF 2017

#### 1. ' GAME CONCEPTS LIMITED

=====PETITIONERS 2. HOMEBET LIMITED======

### **vs**

1. NATIONAL LOTTERIES AND GAMING REGULATORY BOARD 2. ATTORNEY GENERAL========================RESEONDENTS

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CORAM: HON. MR. JUSTICE GEOFFREY KIRYABWIRE, J. A./JCC. HON. LADY JUSTICE ELIZABETH MUSOKE, J. A./JCC. HON. LADY JUSTICE HEI. LKN OHURA, J. A./JCC. HON. LADY JUSTICE MONICA MUGENYI, J. A./JCC. HON. MR. JUSTICE REMMY KASULE, Ag. J. A./JCC.

#### JUDGMENT OF HON. MR. JUSTICE GEOFFREY KIRYABWIRE, J. A./JCC,

#### Introduction

Petition was brought under Articfef"137(3) of the Constitution of the''\*'' Republic of Uganda challenging certain provisions ofthe Lotteries and Gaming Act 2016 together with the Lotteries and Gaining (Fees) Regulations 2017.

rf5. Petitioners allege that S. 39 of the Lotteries and Gaming Act 2016 and . Regulation 2 of the Lotteries and Gaming (Minimum Capital Requirements) Regulations 2017 which together impose Minimum Capital Adequacy Requirements of Ug shs 250,000,000/= (Two hundred and fifty million) for the business of operating either general betting or gaming machines respectively and a total of Ug shs 500,000,000/= (five hundred million shilling) for both, is inconsistent with Article 40(2) and Article-21,(1) ofthe Constitution. **■"a** The Petitioners also aver that Section 40 of the Lotteries and Gaming Act 2016 and Regulation 30 of the Lotteries and Gaming (Licensing) Regulations 2017 thereunder which imposes the requirement of a security bond and a bank guarantee of Ugshs 500,000,000/= (Five Hundred Million Shillings) for either betting operations or gaming machine operations or a total of Ug shs l^OQfO0O(bOO/= (one billion shillings) areliiiconsistent with Article 40(2) and Article 21 ofthe Constitution.

15 The Petitioners further allege that Regulation 2 of the Lotteries and Gaming (Fees) Regulations 2017 which ini posed annual individual branch license fees of Ug shs 10,000,000/= (ten million) for a general betting operating licence and or Ug shs 10,000,00/= for a general gaming operating licence are inconsistent with Article 40(2) and Article 21 ofthe Constitution.

The Petitioners also aver that Regulation 2 of the Lotteries and Gaming (Fees Regulations, 2017 which imposes an application fee of Ug shs 50,000/= (fifty ' thousandShillings) for each individual gaming machine or device, in addition to the general gaming machine operating licence of Ug shs 10,000,000/= (Ten Million) is inconsistent with Article 40(2) and Article 21(1) ofthe Constitution.

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The Petitioners further allege that Section 49 of the Lotteries and Gaming Act 2016 which imposed interest on unpaid taxes equal at two percent of the outstanding amount for each week that the tax remains unpaid is inconsistent with Article 40(2) and Article 21(1) of the Constitution.

The Petitioners also allege that Regulation 18 of the Lotteries and Gaming (Licensing) Regulations, 2017 which imposes size and geographical restrictions on the location of premises used for Gaming and betting business is inconsistent with Articles 40(2) 21(1) and 29 of the Constitution.

In addition the Petition alleges that Section 67 of the Lotteries and Gaming Act which makes it an offence to have facilities for Gaming and Betting without a licence is inconsistent with Article 40(2) of the Constitution. $\phi_{\ell}^{\lambda}$

The Petitioners also allege that Section 1 of the Lotteries and Gaming Act 2016, which defines a minor as any person below 25 years, is inconsistent with Article 40(2) and Article 21(1) of the Constitution.

The Petitioners allege that the imposition of the above enumerated onerous financial conditions on the lawful business of Gaming and Betting had the effect of restricting entry and participation into the industry to only the richest members of society and has the effect of creating artificial monopolistic conditions.

It also alleges that the imposition of the above enumerated onerous regulatory and financial conditions on the lawful business of gaming and pool betting has the effect of unfairly discriminating against the gaming industry and all participants in general in relation to other lawful businesses in Uganda.

The Petitioners sought the following declarations and orders;

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- ) declaration that the impugned provisions "of'Faw above be declared unconstitutional consequently null and void. - b) An injunction against the Respondents to prevent them from imposing any new onerous or burdensome conditions on the lawful business of gaming and sports betting. - c) An injunction against Government to prevent it from prosecuting the pex-ttiOTeTS for conducting lawful businessi'feEGaming and pool betting in Ugau® S''W - dj The costs of this Petition be granted to the Petitioners.

#### REPLIES BY THE RESPONDENTS

The first and second Respondent jointly replied to this Petition.

First, the ^Mpci§dipnts averred that Governmen\$l^^^ interest to regulate Lottery and Gaming industry in Uganda to safeguard the interests of the participants in Lottery and Gaming activities, the general public, entities engaged in operating Lotteries and Gaming facilities and the national economy. The Respondents further aver that it was the duty ofGovernment to protect the national economy from any adverse socio economic effects associated with the Lottery and Gambling industry.

Secondly, the Respondents averred that the requirement for minimum capital Requirement, security bond, and interest imposed on unpaid taxes were all reasonable andqustifiable in as far as they ensured thayntities participating in the Lottery and Gaming industry were able to meet their financial and fiduciary obligations and safe-guarding public participation in Lottery and Gaming Industry.

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tirdly, the Respondents averred "that the geographical restrictions wefd'' necessary in limiting the adverse socio-economic 'effects of gambling on vulnerabie gi oups including children, youth and under age persons.

Fourthly, the Respondents averred that licencing was a core tool required for regulatory compliance and penalizing non-observance of licencing requirements was constitutional, reasonable and justifiable requirement for m entities participating in the Lottery^iid Gaming industry. They averred\tliaCat ''""also.prevented racketeering and money laundering.

Fifthly, the Respondents stated that the definition of a minor for the purposes ofthe Lotteries and Gaming act was reasonable and justifiable for activities that were affecting youth adversely, .s u;

^^fdlly, the Respondent averred thnW^s^flovernment had the right, dut^gg^fi^i obligation to regulate high liquidity institutions and enterprises including; banks, lotteries and gaming activities, SACCOS, micro-finance institutions in order to guard against money laundering.

#### Representations

The Petitioners were both represented by Mr. Ebert Byenkya and Mr. Anthony Bazira while the Respondents were represented by Mr. Philip Mwaka Assistant Commissioner, Chambers of the Attorney General.

#### **. Duty ofthe Court**

Before some of the decisions. I delve into the consideration ofthis Petition, it is important that I recall Roles of a Constitutional Court and the principles that guide its

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tide 1-6 of the Constitution provides that judicial power which is derived from the people shall be exercised'by the Courts established under the Constitution in the name ofthe people and in conformity with law and with the' . values, norms and aspirations of the people. In adjudicating cases, the Courts shall, subject to the law, apply certain principles including the concepts that Justice shall be done to all irrespective of their social or economic status, promotion of redonciliation between the parties and-^^administration of justice without undue regards to technicalities. .

With regard to principles of Constitutional Interpretation Article 137 (1) ofthe Constitution provides:

*"... Any question astto the interpretation ofthis Constitution shall be determined by the Court ofAp^s^. os the constitutional court...*

In this Petition it is alleged that certain provisions ofthe Lotteries and Gaming Act, 2016 and the Lotteries and Gaming (licensing) Regulations 2017 are inconsistent with or in violation ofthe Constitution.

In this regard Article 137(3) (a) provides that a person who alleges that: -

*"an act ofparliament orany otherlaw or anything in orclone under the authority, ofany law;*

*is inconsistent with or in contravention ofa provision ofthis Constitution, may petition the constitution courtfor a declaration to that effectedfor redress where appropriate..."*

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*As to remediesArticle 137 (4) provides: -*

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"... Where upon determination of the petition under clause (3) of this article the constitutional court considers that there is need for redress in addition to the declaration sought, the constitutional court may—

# (a) grant an order of redress; or

$\mathsf{S}$ (b) refer the matter to the High Court to investigate and determine the appropriate redress..."

The above provisions set the jurisdiction and parameters for the interpretation by the Constitutional Court. However, jurisdiction is not enough as it is also settled law that the Petition so filed must in addition disclose a cause of action. In the case of Baku Raphael Obudra and Obiga Kania V Attorney General Constitutional Appeal No. 1 of 2003 Justice Mulenga (JSC), as he then was, recalling his holding in Ismail Scrugo V Kampala City Council & Attorney General (Constitutional Appeal No.2 of 1998) held that a Petition discloses a cause of action if it describes the act or omission complained of and shows the provision of the Constitution with which the act or omission is alleged to be inconsistent or alleged to have been contravened by the act or omission and

prays for a declaration to that effect.

In Wycliffe Kiggundu V Attorney General Civil Appeal No. 27 of 1993 Hon. Justice W. Wambuzi (Chief Justice as he then was) held that it is not sufficient on the face of it to have an allegation of breach of or inconsistency of an Article or Articles of the Constitution of any act, omission or law which merely fulfilled the requirement of pleading under Article 137 (3) of the Constitution. In other words, there must be in issue a controversy involving the interpretation of the Constitution; before the matter can be referred to the Constitutional Court.

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In Davis Wesley Tusingwire V Attorney General Constitutional Petition No. 2 of 2013 this Court went on to hold: -

"... that a liberal and broader interpretation should be given to a constitutional petition than is given to a plaint in a normal civil suit when determining whether

a cause of action has been established (Baku Raphael Obudra and Another $\boldsymbol{v}$ $\mathsf{S}$ Attorney General Constitutional Appeal No. 1 of 2003 (SC)). The same principal applies to subsidiary legislation... " all factors :

In interpreting the Constitution, the rule of harmony or completeness requires that Constitutional provisions should not be looked at in isolation. Rather, the Constitution should be looked at as a whole with no provision destroying another but supporting each other. This is the rule of harmony, the rule of completeness and exhaustiveness and the rule of paramoutintcy of the Constitution has been elucidated in several other Petitions, [see: Paul Semogerere v. Attorney General Constitutional Appeal No. 1 of 2002 (SC); Attorney General v. Susan Kigula and Others Constitutional Appeal No. 03 of 2006 $(SC)$

It can also be deduced from the decisions of Serugo; Raphael Baku and Wycliffe Kiggundu (Supra) that the onus to prove that there is a controversy involving interpretation lies with the Petitioner.

I shall keep these principles and others in mind while resolving the issues in this Petition.

Objections as to jurisdiction $\mathcal{L}$

Counsel for the Respondents submitted that this Petition did not raise matters for Constitutional Interpretation because the remedies sought were only for the constitutional enforcement which remedies could be obtained in an appropriate action in the High Court.

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#### ISSUES FOR DETERMINATION

Parties framed the following issues for the court's determination/

- Whether the Petition is properly filed in this Honourable Court? - 2. Whether Sections 39, 40, 49, 67 and 1 of the Lotteries and Gaming Act, 2016 and Regulations 2, 30,18 of the Lotteries and Gaming (Licensing] Regulations 2017 are inconsistent with and contravene Article 40(2] and ArtiMeWl] ofthe Constitution?

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3. What remedies, if any, should this Honourable court grant?

**10** ISSUE 1: Whether the Petition is properly filed before this court?

## Petitionerssubmissions

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Counsel foi^lie^Eetitioners submitted that the men'tigS'^^tatutory provisions are unconstitutional on the grounds that they infringethe fundamental rights as protected by Article 40(2] and Article 2'1 ('1) of the Constitution. He argued that the statutory provisions inhibited the Petitioners' right to participate in the lawful business of Betting and Gaming in Uganda and denied them their right to equal protection in economic rights under the law.

Secondly, counsel for the Petitioners submitted that though this court made an interim order in Constitutional Petition No.ll of 2015 forbidding the National Lottery Board from closing or interfering with the Petitioner's right to carry out business of GamM&and Betting, the Respondents still-qp^inued to harass the Petitioners which resulted into severe economic damage.

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He further prayed for an amendment of the remedies to include an order of redress be granted to both Petitioners by way of general special and punitive damages to be assessed by a High Court Judge.

Thii dty,.,counsel for the Petitionerssubmitted that the Jurisdiction to declare an Act of Parliament or the Provisions of any subsidiary Legislation as unconstitutional was the sole and exclusive preserve of this court.

He argued that in this particular case the Petitioners were seeking the court's consideration of Sections 1, 39, 40, 49 and 67 ofthe Lotteries and Gaming Act, 2016 and Regulations 2, 30, 18 of the Lotteries and Gaming (Licensing} Regulations 2017. He prayed that these sections ought to be tested against the meaning and effect ofArticle 40(2] and Article 21(1] of the Constitution.

He further prayed for an amendment of the Petition to include S. 48 of the Lotteri?swd^aming Act, 2016 as one of th^sBU&lns that has the effect of double taxatiop. p

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#### **15** Respondent's submissions

First, counsel for the Respondent argued that the Petitioners did not come to court with clean hands because they had been operating without compliance or observancMfthe Lotteries and Gaming Act, 201Wib6fiirther submitted that the DirectofOf the Petitioners were also facing "criminal prosecution for conducting a Lottery without a licence and threatening violence.

Secondly, counsel for the Respondents submitted that the Petitioners sought declarations the net effect ofwhich was to allow them to operate without being licensed, paying fees and dues and supervision by the Regulator which was **f..** irregular.

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**5** *y,* counsel for the Respondents denied that the petitioners had not been j cted to harassment as alleged and thus were not entitled to any redress. Fourthly, counsel for the Respondents submitted that the provisions of the Lotteries and Gamin? Act were reasonable and justifiable, **.■ f:;..... "**

**5 10** Fifthly, counsel for the Respondents submitted that the Petitioners could not benefit from the Interim Order because it was made on 4th May, 2015 when the then prevailing industry laws were under the National Lotteries and Gaming Act (Cap 191) and the Gaming and Pool Betting (Control and Taxation) Act (Cap 292) [both now repealed]. He further submitted that the Lotteries and Gaming Act had riot been enacted and the industry Regulator (the first Respondent) had not been established.

He furthersubmitted that the Interim Order was no longer subsisting since the Petitioners had withdrajiyTft^ earlier Constitutional Petitior^^l^f2015 on the 27th of April, 2021 with leave of court and all orders thereunder were abated.

He then referred us to the decision of this Court made on 23rd February 2017, in Constitutional Application No. 2 of 2017, Murisho Shafi and 5 others vs Attorney General and **Inspectorate** of Government where this^^ri^held: -

i. All interim Orders issued by a single Justice of the Constitutional Court which are still in force are null and void and of no effect.

ii. Any interim or substantive Orders of injunction issued by a Coram of three Justices of the Constitutional Court which are still in force are null and void and of no effect.

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## Court's findings and decision.

This \* raises matters as to jurisdiction. This court has jurisdiction to interpret the Constitution by virtue ofArticle 137(3) and 4 ofthe Constitution. er to establish whether an Act ofParliament, or any law or anything done omitted to oe done under the authority of any law, is inconsistent with or in ontravention of the Constitution a Petitioner has a right to Petition the Constitutional Court for a declaration to that effect.

The Constitutional Court must then using now well established principles interpret and resolve whether indeed there has been a violation of the Constitution (See Attorney General vs Major General David Tinyefuza supra).

However it is not,e.nough to merely allege that a provision' of the Constitution has been violate^T^petitioner must, prima facie, s^^Ji-|t the violation alleged and its "effect require, in order to resolve the issues involved, the interpretation of a provision of the Constitution [See: Ismail Serugo *vs.* Kampala City Council and the Attorney General Constitutional Petition Appeal No.2 of 1998(SC)].

Having addressed myself to the above arguments as to th^y^isdiction of the Constitutional Cour^nd^aving carefully considered the Petition; the Reply to the Petition as well as the submissions of the parties to the Petition, I find that the Petition prima facie shows that there is indeed in issue, a controversy involving the interpretation of the Constitution and the application of the impugned gaming laws and regulations. Furthermore, I equally find that a cause of action for Constitutional Interpretation has been established as the Petition refers to an Act of Parliament and its subsidiary legislation and shows the

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provisions of the Constitution with which the impugned Act and its subsidiary legislation is alleged to be inconsistent or to contravene and the Petitioners then pray for declarations and remedies in respect thereof.

I accordingly find that this Petition is properly before us and will therefore now proceed to resolve the remaining issues. $\mathcal{L}(\mathcal{X},\mathcal{Y})$

Issue 2: Whether Sections 1, 39, 40, 49 and 67 of the Lotteries and Gaming Act No.7/2016 (As Amended) and Regulations 2, 1 and 30 of the lotteries and Gaming (Licensing) Regulations, 2017 are inconsistent with Article 21(1) and Article 40(2) of the 1995 Constitution.

Petitioner's submissions

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Counsel for the Petitioners submitted that the legal provisions of the Lotteries and Gaming Act had the effect of limiting the Gaming and Betting industry to only a few rich members of society. In this regard counsel raised about eight arguments.

Counsel for the Petitioners submitted that any legal provision that has the effect 15 of closing off access of an entire industry to a majority of the population and introducing inequality by limiting economic opportunity to a select few, creating any de-facto monopoly or cartel, or ring fencing any business or trade is inconsistent with and therefore violated both Article 40(2) and Article 21 🖟 f th the Constitution.

Secondly, counsel for the Petitioners submitted that this Court has had the occasion to consider the effect of creation of monopolies by Government in relation to Article 40(2) in the case of Spedag Interfreight Uganda Limited and others vs. Attorney General and Another Constitutional Petition No. 85 of 2011. He argued that in that case this Court found the Government contract in that matter had created a monopoly and was unconstitutional.

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Thirdly, counsel for the Petitioners submitted that some actions of the Respondents against their industry were not supported by primary legislation even though they were found in the relevant subsidiary legislation. Examples of this would be the imposition of branch inspection fees, application fee for a licence to provide facilities for gaming and betting and a licence for each single piece of betting equipment. He submitted that Section 27 of the Gaming and Lotteries Act did not in this regard create a licence known as a "branch licence".

He further argued that according to Section 27(5) of the Gaming and Lotteries Act, the Lotteries Board is allowed to combine several types of operating licenses in a single operating licence.

He further argued that Section 43 of the Gaming and Lotteries Act did not authorize the Minister to introduce a new category of a licence, in this case a "location,licence for each branch". As for the licence for Gaming and Betting, counsel submitted that whereas the said licence was provided for under Item 11 of the Regulations it had no basis under the principal Act. It was submitted for the Petitioners that even though Section 35 of the Lotteries and Gaming Act empowers the Board to register betting machines, it did not authorize the imposition of any registration for each piece of equipment.

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Fourthly, counsel for the Petitioners submitted that the minimum capital requirement prescribed by the minister was oppressive.

Under Item 1 of the Schedule to the Act, the Minister introduced a minimum capital requirement of Ug shs $250,000,000/$ = for general betting, Ug shs 250,000,000/= for slot machines and Ug shs 250,000,000/= for a pool betting licence.

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ibmitted that as a general rule the law in Uganda did not prescribe nimum capital requirements for most businesses, trade or industry. The only industries where minimum or reserve Capital requirements are to be found are in respect of deposit taking financial institutions and betting companies. -

Fifthly, counsel for the Petitioners also challenged the imposition of a statutory bond on the betting companies as being too oppressive.

He submitted that under Regulation 30 ofthe Lotteries and Gaming [Licensing) **• . 1 . •\*** Regulations, 2017, gaming businesses are required to get a bank guarantee of Ug shs 500,000,000/= for, each category of betting license. Counsel for the Petitioners submitted that this amount was extremely high and it was a significant barrier to the entry into this particular business. He further submitted that in order to-get a bank guarantee one must tie up a'significant amount offunds or 3^®

He further argued that there was no other type of business in Uganda that was required to provide security for payment of taxes before they can be allowed to conduct business.

Sixthly, counsel for the Petitioners, submitted that the gaming and betting

industry faced a problem of db&le.taxation.

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**20** gaming or betting activity attracted a further Gaming tax.

In this regard counsel submitted that Section 48 of the Lotteries and Gaming Act provided that in addition to the taxes prescribed by the regular tax law,

He furthersubmitted that Section 49 ofthe Lotteries and Gaming Act provided that any person who does not pay tax on the due date shall in addition to the

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said tax, pay interest equal to two percent of the outstanding amount for each week or part of the week that the tax remains unpaid.

Counsel for the Petitioners submitted that these taxes were extremely oppressive and unconstitutional because a gaming or casino operator was man already subject to income tax at 30% p.a. under the Income Tax Act as a normal corporate business entity.

Counsel for the Petitioners submitted that it was not demonstrably justifiable to tax a business to the point where profitability is almost impossible. He argued that it could not be the purpose of regulation to stifle or kill off an industry.

Counsel for the Petitioners submitted that it was unconstitutional to criminalize the exercise of any fundamental human right such as the right to participate in any lawful business. His submission stemmed from Section 67 of the Lotteries and Gaming Act 2016 that made it an offence to provide facilities for Gaming and Betting without a licence.

He further submitted that even if it was permissible to criminalize a. constitutional right, the burden to justify such a criminalization must be extremely high. He further argued that such a limitation must be demonstrably justifiable so as to impose criminal sanctions.

Counsel for the Petitioners also submitted that Section 1 of the Lotteries and 20 Gaming Act, 2016 which defines a minor as a person below the age of 25 years was inconsistent with the Constitution. He submitted that the Children Act defined a child as someone below the age of 18 years. He argued that to restrict

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P P elow 25 years from being employed in the gaming and betting industry reby affected their right to enjoy a lawful business.

Seventhly, counsel for the Petitioners submitted that it was very strange for Government to. imp.pse a minimum space requirements®^ business of any kind. '■ " '■

He submitted that the 30 square meters imposed by Government was arbitrary and an unjustified extra expense. He further argued that the same is discriminatory because on the other hand many foreign and locally registered operators were opgrating online betting. Therefore, the imposition of space requirements on the physical betting locations was a competitive disadvantage on the licensees.

Eighthly, counsel for the Petitioners also submitted that the restriction of locations ofthese^^jiWes was unreasonable.

He argued as an example That there was no viable reason for thht Gaming and Lotteries shop not to be located near a church or a house of worship since the mere presence of a betting shop would be no reason for a religious person to lose their faith. He also submitted that there was no real justification for restricting proximity to^ubfic offices, market places and the

## Respondent's Submissions

20 First, counsel for the Respondent submitted that the argument by counsellor the Petitioners that the Respondents had imposed excessive and unauthorized fees for branches and betting equipment was false and without merit.

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He further submitted that the subsidiary legislation was properly made by the Minister of Finance under Sections 39, 40 and 70 of the Gaming and Lotteries Act.

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Secondly, counsel for the Respondents submitted that the fees under the lotteries and Gaming (Minimum Capital Requirements) Regulations were reasonable and justified for an industry with such a high liquidity and high risk.

He further submitted that the fees were required for strengthening enforcement by the first Respondent through supervision and inspection, to prevent money laundering, cheating and other malpractices through machines which are not properly calibrated or which are rigged by entities.

In regard to the petitioner's submission that only the Gaming and Betting Industry is affected by minimum capital requirements, counsel for the Respondents submitted that minimum requirements were also prescribed for Re the Banking Sector, Insurance sector, Capital Markets Sector and high liquidity sectors of which the gaming and betting Industry was such a sector. 15

Counsel for the Respondent submitted that the fees/bond requirements under the Lotteries and Gaming (Minimum Capital Requirement) Regulations were Reasonable and justifiable for an industry with a high liquidity and high risk. High submitted that statutory bonds for taxes were intended to mitigate against irresponsible operation of such business and ensure that well qualified persons 20 engage in the sector. The fees and bonds also ensured that the public was protected from manipulation and exploitation.

Counsel for the Respondents further submitted that Section 48 of the Lotteries and Gaming Act did not amount to a double taxation. He argued that the

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P es were justifiable given the high risk and high liquidity nature of the sino and betting industry. Furthermore, he submitted that the Petitioners had demonstrated how their profitability would be impossible with the imposition ofthe' gamine tax

Counsel for Respondent submitted that the imposition of the licence requirement for casinos and betting shops did not contravene Article 40(2) of the Constitution. .

**A** .• He submitted that the Petitioners were simply seeking orders from this Court to sanctify their, illegal, unlawful and unlicensed operations since they had operated illegally without a licence since 2013 and 2014 respectively while eluding the Regulator.

> Counsel for the Respondent submitted that the provision ofminimum age of 25 years undeiW'egbotteries and Gaming Act 201.fejwlxshjlistifiable and did not contravene Article 40(2) of the Constitution. This was because it ensured that only conscious and informed adults engaged in the gaming industry given the high risk nature of the gaming industry. He further submitted that employees ofthe gaming Industry are similarly protected by this minimum requirement.

> **■.** *x* Counsel for tWtespondent submitted that the minifiiffm,.space requirement and location requirement were lawful and justifiable. He-argued that the space requirement was prescient given the advent of covid-19 pandemic.

> He submitted that the location requirements away from the proximity of. schools, churches, mosques which minors routinely access was reasonable and justifiable because it protected them from exposure to the industry.

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## Resolution ofIssue No 2

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**as** rticle 2 of the Constitution makes the Constitution the Supreme Law of the lapd and any other law inconsistent with it is null and void to the-extent ofthat inconsistency. It is important to recognize that what has been asked , of this Court is the declaration as to the constitutionality of certain provisions of an Act of Pai liament as opposed to actions of a certain authority.

The Supreme Court in Attorney General vs Salvatori Abuki, Constitutional Appeal No.l of 1998 put fprward a very important Rule of constitutional interpretation when it comes to ascertaining the constitutionality of legislations. The Supreme Court held that when considering the constitutionality of any legislation, the court has to consider the legislation's purpose and effect. Should the purpose ofthe legislation be inconsistentiwith a provision of the Constitution, then the said legislation and or section of that legislation should be declared unconstitutional. Similarly, should the effect of implementing any provision of the legislation be inconsistent with a provision of the Constitution, the said provision equally should be declared unconstitutional. . . .

The purpose ofa statute plays an important role in establishing the conthxt^he scope and intended effect of a law.

In Jaga v Donges and Another; Bhana v Donges and Another 1950 (4) SA 653 (A) at 662-3 Justice Schreiner JA held: -

*-Certainly no less important than the oft repeated statement that the words and expressions used in a statute must be interpreted according to their ordinary*

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*waning ls the slab,men in the ligft&df their it may be useful to stress two points in relation to the application of P pie. Thefirst is that the context', as here used, is not limited to the*

**5** *9 a9e ofthe rest ofthe statute regarded as throwing light ofa dictionary kind the part to be interpreted. Often of more importance is the matter of the statute, its apparentscope and purpose, and within limits, its background."*

am . It follows therefore that a<c\$T;textual or purposive reading of a sta tifiiSsmust remain faithful to the actual wording of the statute.

In Stopforth v Minister of Justice and Others; Veenendaal v Minister of Justice and Others {19991sZASCA 72; 2000 (1) SA 113 (SCA at paua 21) Olivier JA provided useful guidelines for the factors to be considered when conducting a purposive interpretation of-a statutory provision when he held that:- " '

*"In. giving effect to this approach, one should, at least, (ij look at the preamble of the Act or at the other express indications in the Act as to the object that has to be achieved; (ii) study the various sections wherein the purpose may befound; [Hi] look at what led to the enactment(not to show the meaning, but also to show the mischiefthe enactment was intended to deal with); (iv) draw logical inferencesfrom the context ofthe enactment."*

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I will now deal with the interpretation of the Lotteries and Gaming AtL^ZQJ.6 and Lotteries and Gaming (Licensing] Regulations, 2017 (hereinafter referred to as the impugned Act and Regulations] in the context of this Petition. For brevity I will not repeat each impugned Section or Regulation provides for, as

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earlier in this Judgment in the part titled these are wah-eady detailed &lt; "Background to the Petition".- •

It is the case for the Petitioners that it is their Constitutional Right to practice their private trade or business which the impugned law now seeks to take away. In this regard we were referred to Article 40(2) ofthe Constitution that provides: -

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"Every persozij/i *Uganda has the.right to practicfrhi&ar her profession and carry on any lawful occupation, trade or business".*

**10** Indeed, Article 40(2) of the Constitution provides for the Right for anyone to carry out a lawful trade or business. However, it is also clear from that provision that such trade or business must be lawful. So the trade and business carried out is stilhsubjec^fo the Jaw. So there can be no question that regulation of business by the law is of itself unconstitutional. Article 40 (2) of the Constitution allows for economic growth through professional and lawful occupation, trade and or business. Furthermore, the Constitution under Part IX ofthe National Objectives and Directive Principles ofState Policy provides that: -

*"... In order to facilitate rapid and equitable development, the State shall encourage private initiative andself-reliance..."*

**20** This when read together with Article 40 (2) of the Constitution shows that it is a constitutional imperative that the private business sector is important for the rapid and equitable development of Uganda and therefore should be facilitated and not stifled.

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**a°i 23 | P a g e**

The Petitioners have also referred this Court to Article 21 (1) of the Constitution. Article 21 (1) provides for equality and freedom from discrimination and states as follows: -

- "... All persons are equal before and under the law in all spheres of political, $\mathsf{S}$ economic, social and cultural life and in every other respect and shall enjoy equal protection of the law..." tes sitisf $w$ , $w$ - It is the argument of the Petitioners that the operation of the impugned law is discriminatory against the business of gaming and lotteries. This is because the impugned law provides a more restrictive regulatory environment than for UI other businesses. There is little goubt in my mind that the impugned law and Ą regulations do provide a stiff regulatory environment when compared to other $L$ forms of occupations, trades and businesses. To raise a question for $\overline{\phantom{a}}$ constitutional interpretation, it is sufficient for the Petitioner to show that he or slie enjoys a right which is being infringed by the impugned law or act. In this 15 matter the Petitioners have averred that the geographical locations, fees and.

levies imposed by the impugned Act and the Regulations there under will drive them out of their current business.

$20$

$24$ | Page

The question then remains how do you reconcile the Constitutional Right to do business or practice a profession on the one hand and the regulation thereof on the other hand. This bilocation was addressed by this Court in the matter of Speedag Interfreight Uganda and 3 others v. Attorney General and Great Lakes Ports Ltd Constitutional Petition No 85 of 2011. In that matter the Hon. Justice Fred Egonda Ntende held: -

$23C$

*that all citizens shall have th&right to practice any carry on occupation or trade. However, the right to carry on a P f* \* is *not unqualified. It can be Restricted and regulated by authority of thelaw&gt; Pursuant toArticle 43 ofthe Constitution..."*

**5** Article 43 [1] of the Constitution provides for general limitations on fundamental and other human rights and freedoms. It provides: -

*(1) In the enjoyment-of the rights and freedoms prescribed in this Chapter, no person shall prejudice the fundamental or other human rights and freedoms of others or the public interest.*

- **4\$** *(2) Public interest underthis article shall not permit—* - fl*J political persecution;* - *(2) detention without trial;* Vui - *(3) any limitation ofthe. enjoyment ofthe rights andfreedoms.prescribed by this*

**15 •** *Chapter beyond what is acceptable and demonstrably justifiable in a free and democratic society, or what is provided in this Constitution...*"

Amplifying on the above Constitutional provisions, the Supreme Court in the matter ofCharles Onyango Obbo and Andrew Mujuni Mwenda Vs Attorney General Constitutional Appeal No. 2 of 2002, held as follows: - (per

**20** Mulenga JSC]

**25 | P a g e**

**25**

**10**

*"The provision in clause (1)* is *couched as a prohibition-of expressions that* ' *"prejudice" rights andfreedoms ofothers and public interest. Thi&translates into*

*a restriction on the enjoymentofone's rights andfreedomsin orderto protect the enjoyment by "others", oftheir own rightsandfreedoms, as well as to protect the public interest. In other words, by virtue ofthe provision in clause*

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**Fl I**

*titutional protection ofone's enfSytnent ofrights andfreedoms does nd to two scenarios, namely: (a) where the exercise of one's right or f rn prejudices the human right of another person; and (b) where such prejudices the public interest. Itfollows therefore, thatsubject to clause*

**5** *(2), any law that derogatesfrom any human right in order to prevent prejudice to the rights orfreedoms ofothers or the public interest is not inconsistent with ^^Constitution. However, the limitation providedforin clause (1) is qualified by-: ^ol^use (2), which in effect introduces "a. Ihiljtation upon the limitation". Itjs ^'^*

*apparentfrom the wording ofclause (2) that theframers ofthe Constitution were concerned about a probable danger ofmisuse or abuse of clause (1) under the*

*guise of defence of public interest. For avoidance of that danger, they enacted Clause (2), which expressly prohibits the use ofpolitical persecution and deten tioiu withoutjrial, as means ofpreventing, or measures to remove, prejudice to the pFdb-liddnterest. In addition, they provideairt tlidt clause a yardstick, by which to* ' ' v

*'trip*

**15 20** *gauge-any limitation imposed on the rights"m defence of public interest. The yardstick is that the limitation must be acceptable and demonstrably justifiable in a free and democratic society. This* is *what I have referred to as "a limitation upon the limitation". The limitation on the enjoyment ofa protected right in defence of public interest is in turn limited to the measure of that yardstick. In other words, such limitation, however otherwise rationalised, is not valid unless its restriction on a protected right is acceptable and demonstrably justifiable in a free and democratic society. ■,* . •

*The G^stence in the same constitution, ofi.pr:Qtection and limitation of the rights necessarily generates two competing interests. On the one hand, there* is'

*252.*

*the interest to uphold and protect the rights guaranteed by the Constitution. On the other hand, there is the interest to keep the enjoyment ofthe individual rights*

**26 | P a g e**

**10**

*in check, social consMd^Stions, which are also set out in tfr^^hstitution. here is conflict.between the two interests, the court resolves it having regard to the different objectives ofthe Constitution.*

**5 10** *Isaid earliei in thisjudgment, protection ofthe guaranteed rights is primary objective of the Constitution. Limiting their enjoyment is cm exception to their protection, and* is *therefore a secondary objective. Although the Constitution providesfor bote, it is chylous that the primary objective must be-dominant. It can be overridden only ihj'&^^exceptional circumstances that,cgiv^^ise to that secondary objective. In that eventuality, only minimal impairment of enjoyment of the right, strictly warranted by the exceptional circumstance is permissible..."*

The position at international law appears not to be much different. Article 4 of the International Covenant,on Economic, Social and Cultural Rights [1976] recognises that states nitiy subject economic rights to such limitations as are determined by law only in sb'far as this may be compatible with th'-g'hature of these rights and solely for the purposes of promoting the general welfare in a democratic society.

I have already highlighted that it is a cardinal position of constitutional law that in interpreting the Constitution, it should be looked at as a whole with no provision destroying another but supporting each other. This is the rule of harmony, the rule of completeness and exhaustiveness and the rule of paramountcy ofthe Constitution. (Paul Semogerere v. Attorney General Constitutional Appeal No. fe^ZOOZ (SC); Attorney General v. Stisil'n; Kigula and Others Constitutional Appeal No. 03 of 2006 (SC);)

**27 I P a g e ^33**

**25**

**15**

Constitutional position is as Ob-'ws the Petitioners have a nal right to engage in lawful trade-and business, that right may be icted in as far as it prejudices the rights of others.

w^.ver the bui den of proving that the infringed right is prejudicial to the ritoht of others and therefore should be limited, lies upon the state or the party seeking to uphold the said limitation and not the Petitioner. [See: Charles Onyango. Obbo and Andrew Mujuni Mwen.daws. Attorney General Constit®i:bnal Supra).

In R vs. Oakes 26 DCR [4) 2000 the Supreme Court of Canada while dealing with a similar matter held that: -

*"The onus ofproving that a limit on a right orfreedomguaranteed by the Charter is reasonable.and demonstrably justified in a free and democratic society rests upon tHefdrty seeking to uphold the limitatiori^''"' ^'1"*

This holding was adopted with approval and applied by the Supreme Court in the matter of Onyango Obbo & Anor vs. Attorney General (Supra).

In this Petition, therefore the onus lies primarily with the second Respondent to show that the limitations imposed on the rights of the petitioner under the provisions ofthe Gaming and Betting Act and Regulations fall within the ambit ofArticle 43 (1) and (20) ofthe Constitution.

In determining whether the limitation is justifiable the Respondent had to; show that/W\*.

25 , *[the] Legislative objective which the limitation is designed to promote must be sufficiently important to warrant overriding afundamental right the easures designed to meet the objective must be rationally connected to it and* **28 I P a g e**

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not arbitrary, unfair or based organizational considerations. The means used to impair the right or freedom must be not more than necessary to accomplish their objection.'

[See: - Onyango Obbo & Anor vs. Attorney General (Supra) in which the Supreme Court adopted the reasoning of the Supreme Court of Zimbabwe in $\mathsf{S}$ Mark Gova & Another vs. Minister of Home Affairs & Another, [S. C. 36/2000: Civil Application No. 156/99] $\mathfrak{M}^{\mathrm{SHTP}}_{\mathrm{SHTP}}$

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In the R Vs Oakes (Supra) the Canadian Supreme in a fairly similar approach also applied the test of proportionality which should meet the following ingredients1: -

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"1. measures adopted must be rationally connected to the objective $k$ $\sim$ $\sim$ 2. the means should impair "as little as possible" the right or freedom in question ( which ingredient has since been adjusted to give more flexibility to the legislature)2

3. proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of "sufficient importance"

The Canadian Supreme Court further held that: -20

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1 See https://canliiconnects.org/en/summaries/30837

2 This test was developed in *R. v. Oakes* [1986] 1 SCR 103. The Supreme Court modified it several months later in R. v. Edward's Books & Art [1986] 2 SCR 713; in that case the Court addressed idea of impairing as little as possible' and allowed more flexibility to allow a reasonable margin rather than a 'impensive season's particular transition and a 'precise line'. Since, the SCC has referred to "margin of appreciation" to allow legislature some room to set the level of impairment. (Irwin Tow v. Quebec [1980] 1 SCR 927 See https://www.sfu.ca/~aheard/oakes.html

29 | Page

"the more severesthe effects of a measure, the more important the objective must be if the measure is to be reasonable and demonstrably justified in a free and democratic society"

I shall now look at how courts have viewed the regulation of the gaming and $\mathsf{S}$ lotteries businesses.

Justice Thomson (who wrote the lead opinion) in the Supreme Court of Nevada Constitutional Appeal decision of State vs. Rosenthal 559 P.2d 830 (1977) constantly referred to gaming as a "privileged enterprise" and therefore different from other types of businesses. The Hon. Justice found: -

"... As before noted, gaming is a privilege conferred by the state and does not carry *with it the rights titherent in useful trades and occupations.* State ex rel. Grimes v. Board, 53 Nev. 364, 1 P.2d 570 (1931); Dunn v. Tax Com, 67 Nev. 173, 216 P.2d 985 (1950); NRS 463.130(2)...."

The Hon. Justice went on to further find:-

"... We wish, however, explicitly to state that the statutory standards alone are sufficient since "reasonable" action by the Commission is required in the light of 20 the public interest involved. It is entirely appropriate to lodge such wide discretion in the controlling administrative agency when a privileged enterprise is the subject of the legislative scheme. State ex rel. Grimes v. Board, 53 Nev. 364, 1 P.2d 570 (1931); Gragson v. Toco, 90 Nev. 131, 520 P.2d 616 (1974). We, therefore, find no basis for the ruling below that NRS 463.140 and NRS 463.220 are $25$ unconstitutional..."

$236$

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**5** '. pondentwho has the onus't^hstify the limitation to the Petitioners^ s contended that the impugned Act and Regulations seek to regulate gaming and lotteries businessto protect the public from its possible adverse In interpi eting the impugned Act and Regulations this Court has to consider the purpose and effect of the legislation Salvatori Abuki [supra).

The preamble to the Gaming and Lotteries Act 2016 which provides: -

'*An Act to reform the law relatingjafhe conduct oflotteries, gaming, bettingyy and casinos; to establish the National Lotteries and Gaming Regulatory*

**10** *Board; to provide for licensing and regulation of lotteries, gaming and betting; to provide for taxation of casinos, gaming and betting activities; to repeal the National Lotteries Act,,fap. 191 and the Gaming and Pool Betting ffontrol and Taxation) Act, Cap. 292; andforrelated matters."*

**15** The-preamble shows that the purpose-of the Act is to provide for the establishment of a regulatory authority and the licensing and taxation of the gaming and betting industry.

Furthermore, Section 2 ofthe Lotteries and Gaming Act establishes the National Lotteries and Gaming Regulatory Board whose objective is provided foi undei Section 3 to be: -

*"Objective ofthe Board*

*^■ffbe objective ofthe Board is to supers# and regulate the establishment, management and operation of lotteries, gaming betting and casinos in Uganda and to protect the citizensfrom the adverse effects ofgaming and betting in Uganda.*

**t**

**31| P a ge r** 233

**25** 4 of the Gaming and Lotteries Act provides for the Gaming and eries Boai d to regulate and supervise the establishment, management and operation oi Lotteries, Gaming, Betting businesses and. Ga'sinos in Uganda.

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The provision also provides that the Gaming Board protects members of the public fiom adverse effects of gaming and betting including the promotion of transparency and accountability within the said business. So the Act and the Board addresses what Parliament has determined to be the possible "adverse effects" of gaming and lotteries.

**10** Counsel for the Respondent argued that such regulation of the gaming and lo tteries is in the public interest because ofthe nature of the business and this is therefore acceptable and demonstrably justifiable in a free and democratic society, or what is provided in the 1995 Constitution.

**15** It is would appear to me that the Petitioners are mostly aggrieved about the effects of the fees, taxes and location directions that are in the Regulations as being oppressive and unreasonable. As seen in the R V Oakes case [Supra] the more severe the effects of a measure, the more important the objective must be-

**20 25 32 |** *P* **3 8 e** ass **i** In this case it appea&alinost self-evident that gaining andtMttdiiies businesses the world over require special regulations because while it is a business trade, it also has significant negative effects which in the public interest must be controlled To my mind there is nothing unconstitutional about the impugned Act and Regulations (be it in regulating the trade or saying that it is d" riminatory) As to the level of fees and taxes or locations where the businesses can be located there are other remedies like judicial review of any

**5**

administrative action in this regard that the Petitioners could have resorted to without having to file a petition in the Constitutional Court. This was the approach adopted in the State V Rosenthal case (Supra). It is not for the Constitutional Court to adjudicate oversuch matters like what is an appropriate fee. This is for a trial court which can take more detailed evidence. 1 accordingly answer the second issue in the negative.

### , Final Orders

**'«5**

> **10** In the circumstances, I hereby dismiss this Petition. As to costs, I find that the Petition was filed in the interests ofJustice given the unique nature of this type of business which needed clarification and I therefore Order that each party . bears its own costs.

I so Order. A-'A **: 15 Ax. •Ji-**Dated day of 2021. at Kampala this **20** *I* **25 23^ 33 | P a g e** GEOFFREY KIRYABWIRE JUSTICE OF APPEAL/CONSTITUTIONAL COURT

## **Villing** $\mathcal{L}$ $\mathcal{M}_{\text{lin}}$ THE REPUBLIC OF UGANDA IN THE CONSTITUTIONAL COURT OF UGANDA AT KAMPALA $\mathcal{L}$ CONSTITUTIONAL PETITION NO. 051 OF 2017 1. GAME CONCEPTS LIMITED 2. HOME BET LIMITED: ::::::::::::::::::::::::::::::::::: *.... PFTTTIONFRS* VERSUS 1. NATIONAL LOTTERIES AND GAMING REGULATORY BOARD 2. ATTORNEY GENERAL:::::::::::::::::::::::::::::::::::: CORAM: HON. MR. JUSTICE GEOFFREY KIRYABWIRE, JCC HON. LADY JUSTICE ELIZABETH MUSOKE, JCC HON. LADY JUSTICE HELLEN OBURA, JCC HON. LADY JUSTICE MONICA, MUGENYI HON. MR. JUSTICE REMMY KASULE, AG. JCC ÷. JUDGMENT OF ELIZABETH MUSOKE, JCC I have had the advantage of reading in draft the judgment of my learned brother Kiryabwire, JCC. For the reasons he has given therein I agree with whim that this Petition should be dismissed with no order as to costs. $\mathbb{C}$ 2021. Dated at Kampala this ........ $\therefore$ day of....... $\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\overline{\over$ **Elizabeth Musoke** Justice of the Constitutional Court

人民使

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$\therefore$ day of.................................... ..................................... Dated at Kampala this.

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Hellen Obura

JUSTICE OF APPEAL/CONSTITUTIONAL COURT

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THE REPUBLIC OF UGANDA

### THE CONSTITUTIONAL COURT OF UGANDA AT KAMPALA $\mathcal{L}^{\mathcal{L}}$

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$:\mathring{\mathbf{E}}_{\mathbf{t}}$ CÓRAM: KIRYABWIRE; MUSOKE; OBURA; MUGENYI, JJCC & KASULE, AG. **Viria** JCC

**CONSTITUTIONAL PETITION NO. 51 OF 2017**

**POSSIGE**

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**GANCATICA**

1. GAME CONCEPTS LIMITED

2. HOMEBET LIMITED ....................................

#### **\*VERSUS**

1. NATIONAL LOTTERIES & **GAMING REGULATORY BOARD**

2. ATTORNEY GENERAL ....................................

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Constitutional Petition No. 51 of 2017

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### $\mathcal{A} = \mathcal{A} \mathcal{A}$ JUDGMENT OF MONICA K. MUGENYI, JCC

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I have had the benefit of reading in draft the judgment of my brother, Hon. Justice Geoffrey Kiryabwire, in this Constitutional Petition.

I agree with the decision arrived at and the orders therein, and have nothing useful to add.

Dated and delivered at Kampala this ...... $...$ 2021. day of

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Hon. Lady Justice Monica K: Mugenyi Justice of the Constitutional Court

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Constitutional Petition No. 51 of 2017

## THE REPUBLIC OF UGANDA

IN THE CONSTITUTIONAL COURT OF UGANDA AT KAMPALA

## CONSTITUTIONAL PETITION NO. 051 OF 2017

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GAMING REGULATORY BOARD **EXEMPLE :::::: RESPONDENTS** 2. ATTORNEY GENERAL

CORAM: HON. MR. JUSTICE GEOFFREY KIRYABWIRE, JA/JCC

HON. LADY JUSTICE ELIZABETH MUSOKE, JA/JCC $\mathbb{R}^n \to \mathbb{R}$ HON. LADY JUSTICE HELLEN OBURA, JA/JCC

HON. LADY JUSTICE MONICA MUGENYI, JA/JCC

HON. MR. JUSTICE REMMY KASULE, Ag. JA

# 🛰 🖦 JUDGMENT OF REMMY KÄSULE, Ag, JA/JCC

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I have had the privilege of reading in draft the lead Judgment of my brother Hon. Mr. Justice Geoffrey Kiryabwire, JA/JCC

I agree with his resolution of the issues and the conclusion he reaches that, although the Constitutional Petition was properly

EQUILT OF APPEAL OF UGANDA

Constitutional Court, the impugned Sections 1,39,40, 49 and 67 of the Lotteries and Gaming Act No. 7 of 2016 (as amended) and Regulations 1,2 and 30 of the Lotteries and Gaming (Licensing) Regulations 2017, are not inconsistent with Articles 21(1) and 40(2) of the Constitution, 1995, and as such the Constitutional Petition has:to be dismissed. '• ••

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As to the costs of the dismissed Constitutional Petition, I too concur with the Order of Hon. Justice Geoffrey Kiryabwire, *JA/JCC,* that each party to the Petition bear their own costs as, given the unique I nature of the subject matter of the Petition, which necessitated clarifications by this Court, the Petition was- filed and conducted in the interest ofjustice.

Dated at Kamp^tijis....-... **> V?S** ......... day of 2021

**Remmy Kasule**

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