Business
South Africa’s betting boom and the fight over a national gambling tax
South Africa’s love affair with betting has never been bigger. From weekend sports accumulators to late-night online spins, gambling has become a booming industry worth trillions in wagers. Now, the government wants a bigger slice of that pie, and not everyone is convinced it is the right move.
The debate centres on a proposal by the National Treasury to introduce a 20 percent national gambling tax, on top of existing licensing fees and VAT. Public comments on the Treasury’s discussion paper closed recently, and the submissions reveal a country split down the middle.
R1.5 trillion wagered in a single year
According to the National Gambling Board, South Africans wagered about R1.5 trillion during the 2024 to 2025 financial year. After paying out winners, operators earned R74.5 billion. That marks a 25 percent jump in operator revenue, with online betting alone accounting for roughly 70 percent of the market.
Those figures are staggering, especially in a country grappling with unemployment and a rising cost of living. For many, gambling has become both entertainment and a desperate attempt at financial relief.
Treasury insists the proposed tax is not simply about boosting state coffers. In its discussion paper, it argues that gambling creates social costs that extend beyond the individual punter. The aim, it says, is to ensure that the price of gambling reflects those wider consequences.
The paper distinguishes between pathological gambling, recognised as a mental disorder where individuals continue betting despite severe harm, and problem gambling, a behavioural addiction where control is lost over time.
Provinces cashing in, unevenly
At present, there is no national gambling tax. Operators pay VAT and licensing fees to provincial licensing authorities. Those authorities set their own agreements, which have allowed companies to choose provinces that are more favourable to their business models.
The Western Cape and Mpumalanga currently lead the pack, each generating more than R20 billion in revenue. Gauteng follows at just under R15 billion, while KwaZulu-Natal and other provinces trail at R5 billion or less.
Rise Mzansi has entered the fray with a public submission supporting the national tax. The party argues that under the current system, for every R1 billion in betting revenue, provinces collect just over R60 million in licensing fees, while the government receives around R130 million in VAT. A 20 percent national tax would raise that combined amount to about R360 million per R1 billion in revenue.
Rise Mzansi proposes that the additional funds be shared between national and provincial governments, with a portion ringfenced specifically for education and rehabilitation programmes aimed at tackling gambling addiction.
Critics warn of unintended consequences
Not everyone is sold on the idea. The Free Market Foundation has called for the proposal to be scrapped entirely. It argues that the tax could undermine provincial authority and place excessive pressure on legal operators, particularly in the online space.
The foundation also points to South Africa’s economic climate. In its view, gambling’s social harms are symptoms of deeper economic distress. Addressing poverty and unemployment, it suggests, would do more to reduce gambling addiction than adding another layer of taxation.
Legal experts have raised concerns about enforcement. Nicholas Carroll of Cliffe Dekker Hofmeyr has questioned whether enough is being done to curb illegal gambling. Without firm action, there is a risk that punters shift to unregulated operators who do not pay local taxes.
Offshore online casinos are already a significant force, reportedly making up 62 percent of the digital market. That reality complicates any attempt to increase taxes on compliant local operators.
Blocking illegal operators
Rise Mzansi has proposed tighter internet regulation to counter this risk. The party suggests that the Minister of Communications and Digital Technologies, along with internet service providers, should block illegal gambling sites. It also recommends that South African banks seize funds flowing to such operators and redirect them to the National Gambling Board.
Whether that approach is practical remains to be seen. Internet regulation is notoriously complex, and offshore platforms often adapt quickly to restrictions.
A moral question, not just a fiscal one
Beyond the numbers lies a bigger question: what responsibility does the state have in curbing addiction, and how far should it go in reshaping a thriving industry?
Supporters see the tax as a corrective measure, ensuring that the industry contributes more directly to mitigating the harm it may cause. Critics fear it could distort the legal market, drive activity underground, and weaken provincial oversight.
On social media, reactions have been predictably divided. Some South Africans argue that betting companies are making enormous profits while communities bear the cost of addiction. Others counter that adults should be free to spend their money as they choose and that overregulation will only strengthen illegal operators.
What is clear is that gambling is no longer a niche pastime. With trillions wagered and billions in profits, it has become a central feature of South Africa’s economic landscape.
Whether a national gambling tax will ease social ills or simply reshuffle revenue streams is still an open question. For now, the stakes remain high, and the country waits to see which side of the bet the government will ultimately take.
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Source: The Citizen
Featured Image: Moneyweb
