The State of South Africa’s Online Gambling Industry
South Africa has a thriving gambling industry, and it generates a lot of revenue. According to respected auditing, tax and consulting firm PricewaterhouseCoopers, the country’s Gross Gambling Revenue (GGR) is expected to jump from R27 billion in 2016 to R35 billion in 2021.
That’s a compound annual interest of 5.1% and taxes and levies are predicted to rise to R3.5 billion, with a 5.2% compound annual rate, within the same time period. In short, gambling in South Africa is big business, and it can generate important revenue for the government.
Land-Based Gambling Under Apartheid
South Africa’s first gambling legislation was introduced in 1673 and it prohibited betting and casino games of all kinds. The laws were relaxed a little in 1965, but only slightly – at this point, horse races and betting on the horse race results were legalised.
When Apartheid was finally abolished in 1994, the authorities knew they would need to find creative ways of generating more income as the country worked to shake off the shackles of the past. One clear solution was to licence and regulate casinos and sportsbooks.
Land-Based Gambling After 1996
The National Gambling Act was introduced in 1996 to regulate the industry, and today there are around 40 land-based gambling-oriented establishments throughout the nation. This number includes the massive Rio Casino Resort, which is not only the biggest casino in the country but also the fifth-largest gambling venue in the world.
Sun City is another top earner and has actually been operating legally since 1979. Business magnate Sol Kerzner opened the venue in what was then the independent homeland of Bophuthatswana, now the North-West Province, taking advantage of the region’s independent status under the Apartheid regime. In some ways, this is similar to Native Americans being allowed to operate gambling destinations on indigenous populations’ reservations.
Popular Gambling Forms in SA
One in ten South Africans is a gambler, and on average these individuals spend more than R150 on the activity every month. The National Lottery is a particular favourite among citizens, and generated R3.972 billion in gross revenue during the 2019 fiscal year.
Other popular forms of online gambling in South Africa include Bingo, slot machines and table games such as Roulette and Blackjack. Overall, casinos account for 72% of the country’s GGR while sports betting comes in second and earned R2.4 billion in 2015 – a staggering year-on-year increase of 51.9%.
The Online Gambling Situation
With sports betting, lottery and casino games such obvious income generators, South Africa seems like the perfect place to cash in on the online gambling industry that is thriving around the world. However, this has not been the case.
The National Gambling Amendment Bill was added to the Gambling Act in 2004, outlawing all online activities except sports betting and establishing the National Gambling Board as the official regulator. In 2008, attempts to relax the laws were thwarted by anti-money laundering groups and land-based operators. Then in 2010, offshore online establishments were also prohibited.
However, many citizens continue to gamble at international online casinos and have never been prosecuted for their activities. Experts predict that this state of affairs will continue, along with the many illegal online casino hubs designed to look like Internet cafes, until laws are relaxed.
SA’s Gambling Future
Considering how many people in South Africa gamble, it makes sense to introduce a regulated online sector that could protect consumers, tax GGR, prevent underage bettors and offer support for problem behaviour.
This is what happened under the United Kingdom Gambling Commission, which has regulated the industry in Britain since 2006 and turned online gambling into the nation’s biggest single business sector. But will SA follow suit?
Some suggested amendments are being processed, but experts say they don’t do much to improve the situation. Until serious changes are made, gamblers seem set to continue patronising – and filling the pockets of – offshore operators.
