South Africa is considering a new 20% national gambling tax on gross gambling revenue (GGR) as online betting grows rapidly. Tax experts warn, however, that the levy could push out legitimate, licensed operators and encourage players to move to unregulated offshore platforms reducing tax take for the state while money flows abroad.
The proposal is tied to the rapid expansion of online gambling. Experts also states that online betting accounted for more than 85% of total betting GGR in the 2024/2025 period, with overall betting turnover described as R1.50 trillion (noting that the South African Reserve Bank has provided a softer figure). Supporters of the tax say the goal is to raise over R10 billion annually for the government, while also tackling the social harms associated with gambling addiction and its knock-on effects for households and social services.
A central concern raised by experts is that the tax could stack on top of existing provincial taxes, making the total burden too high. Provincial gambling taxes already range from 6% to 9% for online betting and 10% to 15% for casino gambling. If a national 20% levy is added on top, experts estimate that operators could face an effective tax rate of roughly 26% to 29%, since it would be imposed alongside the current provincial duties. While high online-gambling taxes exist in other countries, the experts argue that South Africa is especially exposed to the risk of a damaging “tax-and-exit” cycle.
The experts also question how the tax would be implemented. They say the outcome could differ significantly depending on whether it is structured as a standard GGR tax at the operator level or as a withholding tax deducted at the transaction level. They note that if it is collected through routine filings at operator level, it may still duplicate provincial taxes and increase regulatory and administrative complexity. If it is instead a withholding tax, they argue the system becomes more complicated because intermediaries such as banks or payment processors would need to withhold the tax before funds reach recipients. That model may be harder to enforce in practice, particularly when dealing with offshore operators or cryptocurrency payment routes.
Another issue highlighted is the possibility that the tax could be calculated on turnover rather than GGR. The experts argue that this would depart from international practice and could further affect the viability of legitimate businesses in the sector. The political rationale for the tax is described as being both fiscal and social, but the experts insist the main risk is that excessive tax pressure would drive both players and operators toward offshore or illegal platforms. They point to Kenya as an example where a similar 20% wagering levy reportedly led operators to withdraw from the market, with tax revenue declining rather than increasing.
They argue South Africa faces an even greater risk because interactive online gambling remains illegal at the national level, and offshore operators are already able to serve local players without regulation. If local taxes rise too sharply, gamblers can switch easily to unlicensed options, leaving the state with less revenue and weaker oversight. Beyond the tax rate itself, the experts warn about governance and enforcement complications. Gambling is regulated by both national and provincial authorities, and provinces already levy their own taxes. Adding a national tax may therefore create duplication and administrative inefficiency and could also increase the likelihood of legal conflicts.
Experts also notes that National Treasury has suggested a possible national licensing framework to reduce fragmentation between national and provincial regulation. Enforcement is another major concern. Illegal online gambling remains widespread, and monitoring cross-border transactions, cryptocurrency betting, and offshore sites is difficult. In the absence of stronger enforcement, experts warn that licensed operators may end up carrying most of the compliance burden, while illegal operators face comparatively limited consequences.
