The online gambling industry in South Africa is rapidly escalating and does not exist in isolation. It relies on accommodating regulations and a tax regime that the country’s fragmented legislation provides. This industry preys on a desperate population that clings to the hope of life-changing jackpots. It thrives in a financial system that allows billions in bets to flow through its platforms with minimal cost and hassle.
The South African financial services industry has made it alarmingly easy for this online gambling boom to persist, effectively becoming complicit in the situation. Practically all major banks, including Standard Bank, FirstRand (FNB), and Nedbank, prominently feature gambling companies as pre-set beneficiaries on their apps. Exceptions like Absa and Capitec still list gambling companies as “public beneficiaries.”
A significant portion of the financial infrastructure supporting gambling comes from well-known corporations that have established bank-less “universal voucher” systems, targeting the unbanked and the poor.
These systems are now responsible for billions of rands flowing into the gambling ecosystem, with gambling services becoming their primary offerings. Pepkor and Blue Label Telecoms (rebranded as Blu Label Unlimited) are notable players, while the market leader, Super Group, recently launched its cryptocurrency to streamline payments and increase control over gamblers, reinforcing its dominance. Companies argue that they are not moral arbiters, but this doesn’t excuse their efforts to attract customers to gambling a recognized public health hazard that is spiraling out of control.
With the local online gambling market thriving, new entrants, both legal and illegal, are making their move in this lucrative frontier. While some offerings are legitimate, industry research suggests illegal operations may be even larger than licensed ones, posing a terrifying prospect for regulators. Moreover, these gambling platforms often serve as vehicles for money laundering due to the ease of anonymous transfers, which can obscure the origins of illicit funds.
The National Gambling Board recently reported a staggering total wagering of R1.5 trillion for the year ending March 2025, a figure largely driven by online gambling. This growth trend is expected to continue, with estimates suggesting South Africans may wager R2 trillion in the current financial year.
The gross gambling revenue (GGR), what companies earn and what gamblers lose also experienced substantial growth, reaching R52 billion in the past financial year. Some estimates indicate that unlicensed operators might account for 62% of GGR, significantly inflating revenue figures.
The expenditure on gambling is having notable economic repercussions, particularly impacting poorer South Africans, who often gamble away a disproportionate share of their income, even using social grants to fund their habits. This trend diverts household spending from productive sectors and traditional goods.
Banks have made access to gambling payments remarkably easy through banking apps, listing major gambling platforms among pre-set beneficiaries. While banks argue they are only meeting market demands, this convenience can be seen as implicit marketing for gambling. The extensive visibility of gambling options enables easier access, fostering a cycle of reckless spending.
The rise of voucher systems has made gambling access even more seamless. Systems like 1Voucher, Blu Voucher, and OTT Voucher allow users to purchase vouchers with cash, which can then be redeemed for online gambling without bank involvement. This means that considerable amounts are funneled into gambling sites, estimated at around R5.6 billion just from Pepkor’s voucher system.
Moreover, the growing prevalence of online gambling is symptomatic of much larger societal issues. Operators don’t provide enough safeguards to curb the rising tide of gambling addiction, and regulatory measures appear insufficient to address the ongoing explosion in gambling-related harm.
The introduction of a proposed 20% online gambling tax by the National Treasury has drawn sharp criticism and resistance from the gaming industry. While the intention behind this tax is to curb problem gambling, many question its effectiveness, especially since the suggested method does not aim to create consumer disincentives like a typical “sin tax.”
There’s also skepticism regarding the Treasury’s ability to regulate or tax the already huge illegal portion of the market. In summary, the online gambling crisis in South Africa opens numerous fronts from regulation and taxation to responsible gambling and the role of financial institutions. The need for comprehensive oversight and action has never been more pressing.
