Illegal Online Gambling Drains South Africa of R50bn a Year

Illegal online gambling now drains South Africa of more than R50 billion a year, roughly US$3.1 billion, with offshore operators controlling close to two-thirds of all online gambling activity in the country. None of that money is taxed locally, and by industry estimates around 16 million South Africans placed a bet on an illegal platform in the past year.

Trade, Industry and Competition Minister Parks Tau says the National Gambling Policy Council (NGPC) is now moving to fast-track new gambling legislation and tighter advertising rules to claw back control. The problem he’s inheriting is enormous, and the tools meant to fix it have been stuck in a legislative queue for the better part of a decade.

Advertising is squarely in the council’s sights. Betting promotion has saturated South African sport and broadcast, and rising problem-gambling numbers are what’s pushing lawmakers to act.

A Bill Stuck Since 2018

The centrepiece is the National Gambling Amendment Bill, first introduced in 2018 and now eight years old. It has lapsed twice, been revived twice, and spent long stretches in mediation without ever crossing the finish line. Reviving it, Tau argues, would hand government far stronger powers to act against offshore operators targeting South African players.

Here’s the catch. While the Bill drifts, the illegal market has done the opposite. Unlicensed sites now take an estimated 62% of online gambling spend, and every Rand that flows to them is a rand the fiscus never sees and a licensed operator never gets to compete for on fair terms.

The Whack-a-Mole Problem

Enforcement is the harder half of the story. The National Gambling Board has asked the Department of Communications and Digital Technologies to order internet blocking of offshore gambling sites, but the plan is meeting resistance. Every time a site is blocked, operators just switch URLs and reappear, a game of whack-a-mole that IP-level blocking barely slows.

Sasha Booth-Beharilal, chair of the Internet Service Providers’ Association, insists any block has to rest on proper law rather than a request: “ISPA’s position is that any disruption of internet services to South Africans should be done only as part of a clear legislative framework.” VPNs and domain-hopping keep the technical side leaky even where the legal basis is solid.

Operators Want Action Now

Sean Coleman, CEO of the South African Bookmakers’ Association, has been blunt about the cost to the legal trade: “The illegal gambling market presents significant risks to consumers, deprives the fiscus of tax revenue, undermines licensed operators that comply with strict regulatory requirements, and creates an uneven competitive environment.” Coleman adds that the industry hasn’t even been consulted on the proposed amendments yet.

The tax gap is the part that stings for Treasury. Legal betting and casino play generate real revenue for the provinces, yet the offshore majority pays nothing into South African coffers while soaking up the bulk of the spend.

What It Means for Players

The real bind for South African players is the lack of recourse if something goes wrong. The legal, licensed corner of the market plays by strict rules on age checks, payouts and responsible gambling, while the offshore majority runs with none of those guardrails and no local accountability. Until the Amendment Bill actually passes and the blocking question is settled in law, the black market keeps two-thirds of the action and every cent of the tax that should have come with it. Ethiopia has taken that bind to its limit. Seven months after revoking every licence in the market, its regulator says no betting firm in the country holds a legal one, so there is no licensed corner left to choose.

The licensed side of the market is growing alongside the illegal one. Apex Bets launched in South Africa under a WCGRB licence with a R30,000 welcome offer. Read more.