The house always wins

If you live in South Africa, you’ve seen it. Gambling ads plastered across buses, football jerseys, and YouTube videos. The sleek apps promising quick wins. The “R10 to win R1 million” fantasy. But behind the glitz lies a brutal truth: online gambling is siphoning money from the country at a historic scale.

In just four years, the online gambling industry has grown by 550%, reaching a staggering R1.14-trillion in turnover for 2023/24, about 17% of the nation’s GDP. That’s more than the entire mining industry generates. And the kicker? Most of that money doesn’t stay in South Africa.

Digital casinos, real consequences

Betway and Hollywoodbets dominate this digital gambling ecosystem, together controlling up to 75% of the betting market. But while the betting takes place here, the profits largely head offshore. Betway, for instance, made nearly R11-billion from South African users in 2024 alone. A third of that is estimated to leave the country via dividends and licensing fees to offshore trusts and foreign software providers.

The games themselves from Aviator to in-play sports betting, are engineered to keep players hooked and losses constant. On average, gamblers lose R5 for every R100 they bet. And most of those losses come from the poorest households. More than half of gamblers say they play to earn money or hope for a life-changing win. But mathematically, they’re set up to lose.

Addiction by design

Problem gambling is no fringe issue. Rapid-fire bets, constant notifications, and cashback offers are part of what researchers call “addiction by design.” In one case, a South African gambler who spiraled into addiction was paid R150,000 by Betway to settle a complaint, a deal a judge called deeply troubling.

A recent survey showed that 63% of South Africans who gamble do so with money they can’t spare. That’s household income that could be going to groceries, school fees, or savings, but is instead being vacuumed into offshore accounts.

Marketing madness

Critics say the industry is following the playbook of Big Tobacco in its heyday. Unrelenting ads target sports fans and the working class. Betway recently piloted ads in Home Affairs offices via free Wi-Fi. Only public backlash got them pulled.

And just like Big Tobacco once did, gambling firms justify their impact by touting sponsorships: Springboks, SA20 cricket, development football teams. But social watchdogs argue that these PR moves can’t offset the harm being done, especially to the country’s poorest.

Who profits?

A small circle of expat South Africans are raking in the real money. Chief among them is Martin Moshal, an elusive billionaire with indirect stakes in both Betway and its software provider, Apricot Investments. His trusts are poised to collect hundreds of millions annually from the gambling boom.

Moshal is also one of the biggest funders of South African opposition parties, including the DA, ActionSA, and Build One South Africa. He’s also linked to pro-Israel organisations amid allegations of Israeli war crimes, a juxtaposition that rubs uncomfortably against South Africa’s foreign policy.

Old laws, new dangers

South Africa’s gambling laws are dangerously outdated. The 2004 National Gambling Act pre-dates smartphones and online betting apps. Attempts to update it have stalled, even as the industry races ahead. Meanwhile, a controversial Remote Gambling Bill proposed by the DA could make it even easier for online-only operators to flourish.

Provincial regulation creates more issues. Gambling taxes are set by province, and operators, especially in the Western Cape, flock to the most permissive regulators. That means one province reaps the tax benefits, while others deal with the social costs.

The call for reform

Regulators and civil society are starting to push back. Proposals include advertising bans during the day, tighter licensing rules, and the introduction of a sin tax like the one on cigarettes and alcohol.

Even Famous Brands, which owns restaurants like Steers and Wimpy, has sounded the alarm. They say disposable income is drying up, and online gambling is partly to blame.

Hollywoodbets and Betway argue that they create jobs and support the economy through sponsorships and philanthropy. But critics say this doesn’t excuse the broader harm.

South Africa’s online gambling explosion is a cautionary tale. It represents a new kind of economic extraction — dressed up in sports jerseys and glittering jackpots. As the country faces record unemployment and rising inequality, letting gambling drain its wealth could prove to be a very bad bet.

{Source: Daily Maverick}

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