Africa’s growing gambling use is draining income that would ordinarily flow into groceries, entertainment, and mobile phone bills. Leaders of some of the continent’s largest companies are now warning about the harm the trend is inflicting on household budgets. “People are spending money in a black hole that could have been spent on food,” said Pieter Engelbrecht, chief executive officer of Africa’s largest grocer, Shoprite Holdings.

Online betting is mushrooming across Africa, with gross gaming revenue projected to reach $13.5 billion this year, more than double its 2023 level, according to data from H2 Gambling Capital. Fueled by a young, fast-growing population, rising smartphone use, and weak regulation, betting firms are rapidly drawing in users, leaving customers with less money to spend on other discretionary items.

South Africa’s Treasury has called the trend an “important policy concern” that may require further government intervention through tighter regulation and taxation. As spending on online betting rises, it is contributing to growing financial distress among heavy users. Research shared with Bloomberg News by Standard Bank, Africa’s largest bank, found that the average share of income spent on gambling doubled to 2% between 2021 and 2025.

The burden is highly uneven. About 7% of people spend more than 100% of their income on gambling, relying on credit and other supplementary funds. In South Africa the continent’s largest economy spending on betting has increased by about 50% annually over the past three years, even as overall consumer spending weakened, according to data from Absa bank. The rise in gambling has also been accompanied by increased borrowing and missed loan payments.

Absa CEO Kenny Fihla described gambling trends as a “huge predictor” of loan delinquency. “The more clients become indebted, the more they gamble and the bigger the hole becomes,” he said during an earnings call last month. “This is a massive problem that, quite frankly, we’re worried about,” he added. Data published last year by Experian and finance app Vault22 showed that loan default rates among gamblers in South Africa have been rising four times faster than among non-gamblers, increasing by 2% month-on-month.

Gambling has now become the twelfth-largest category in South Africa’s consumer price index, ranking just behind beer. According to the national statistics agency, it accounts for more than half (54.5%) of spending on leisure activities such as sports, movies, and gym memberships. The trend is even affecting mobile operators.

MTN Group, Africa’s largest wireless carrier, said “muted” growth in South Africa’s prepaid mobile market has been “exacerbated by the growing share of disposable income being spent on online gambling,” according to its 2025 annual report published last month. Fashion retailers are also feeling the pressure. Roy Bagattini, CEO of Woolworths Holdings, said gambling is squeezing discretionary spending. “Because gambling taps into the consumer’s discretionary wallet, there are parts of our business that are more vulnerable,” he said.

“People are blowing their salaries on online gambling before they pay rent, school fees, transport,” said Oscar Bishop, a recovering gambling addict who is now an ambassador for the South African Responsible Gambling Foundation. “The pandemic of online gambling is way, way out of hand,” he added. At the height of his addiction, Bishop said he bought “less and less groceries every month” and made excuses to his family, claiming he needed money for car repairs.

Bishop has called for stricter regulation, bans on advertising, and limits on how much individuals can spend on gambling each month. While online betting is largely regulated at the provincial level, many offshore casinos continue targeting South Africans without licenses. Betting firms, meanwhile, are capitalizing on surging demand. New York-listed Super Group, operator of Betway and Spin exited the U.S. market to focus on faster-growing African markets. Its African revenue grew 27% in 2025, largely driven by South Africa.

Momentum in the sector continues to build. Virgin Bet entered the South African market in March, while the number of sports-betting licenses has climbed to 400 up 40% from the 2020/2021 financial year, according to the trade ministry. Super Group and Virgin Bet declined to comment. Ulrik Bengtsson, CEO of Sunbet operator Sun International, argued that although household gambling spending has risen, it remains relatively low compared with spending on essential goods and services.

“A licensed, tax-paying industry is the solution to consumer protection, not the problem,” he said, contrasting regulated businesses with the “thousands of offshore platforms already targeting South African consumers beyond any regulatory reach.” Sun International has co-founded an industry body for licensed operators aimed at developing stronger gambling regulation.

In November, South Africa’s Treasury launched a public consultation on whether an online gambling tax could help offset the social costs associated with problem gambling, including “financial stress, reduced productivity, family hardship and adverse mental health outcomes,” according to a spokesperson. The Treasury said feedback from the consultation will be discussed in a workshop and used to shape draft national legislation for a proposed gambling tax later this year.

Efforts to modernize South Africa’s 2004 gambling regulations for the digital era have repeatedly stalled, according to Toby Chance, a member of parliament for the Democratic Alliance. “Political will has been absent,” he said, adding that the country was being “robbed” by illegal operators that do not pay their fair share of taxes.