South Africa cracking down on online casinos

South Africa allows online sports betting while banning other forms of online gambling, with government providing no clear argument for why they are treated differently.

Despite the legalities surrounding online gambling, South Africans have access to over 1,000 online gambling sites, according to AskGamblers, a site that aims to “bridge the gap between the iGaming industry and players.”

While there has been little enforcement in this regard, The Minister of Trade, Industry, and Competition, Parks Tau, says this is about to change.

In a recent response to a Parliamentary question, Tau said the department would begin cracking down on online casinos.

Tau said this would involve the National Gambling Board (NGB) collaborating with law enforcement agencies to facilitate awareness campaigns.

According to the National Gambling Act of 2004, which outlines rules for legal and illegal forms of gambling, interactive gambling games are illegal.

It defines interactive games as gambling games that can be played through an electronic agent accessed over the Internet.

While online sports betting is not explicitly mentioned in the Act, betting on sports, defined as placing a bet or wager, is considered a gambling activity.

However, because of this ambiguity, the National Gambling Board issued a statement to clarify the matter, noting that online gambling is illegal, except for online sports betting. No reason was provided for the exception.

To add to the confusion, a report on gambling in South Africa published by the Department of Trade, Industry, and Competition in 2017 refers to sports betting as an illegal gambling activity.

MyBroadband contacted the National Gambling Board to seek clarification on the matter, but it had not provided feedback by the time of publication.

In 2008, then-President Thabo Mbeki assented to the National Gambling Amendment Act. However, it was never brought into operation.

The amendments in the bill provide the necessary regulations for interactive gambling facilities.

However, Parliament has made multiple attempts to seek clarity and better regulate online gambling in South Africa, despite the fact that no president has implemented the Amendment Act.

The most recent attempt was by the DA, which proposed the Remote Gambling Bill a month before South Africa’s general election in 2024. The bill aimed to regulate the advertising of online gambling and protect children and vulnerable persons.

The bill, which took two years to compile according to DA MP Dean MacPherson, now serving as the Minister of Public Works, also proposed that gambling licences be issued by relevant provincial authorities rather than the National Gambling Board.

“It is highly concerning given the massive strides and advances online usage has increased and grown since 2008,” MacPherson said.

“By not regulating this gambling activity, the erosion of the rule of law and criminal activity is being encouraged, while the public is not effectively protected as they are when using land-based gaming operations.”

A similar bill was proposed in 2015 by Cape Town’s current mayor, Geordin Hill-Lewis, but did not progress due to a lack of support.

South Africa’s rise in sports betting

While it had been on an upward trajectory before 2019, sports betting revenue increased dramatically due to increased usage of online platforms during the lockdown periods, according to data from TheOutlier.

The value of bets placed increased by R45 billion to R107 billion from the 2019/20 to the 2020/21 financial year, which saw sports betting revenue overtake that of casinos.

Bets placed more than doubled to R233 billion the following year, eventually reaching R418 billion by the 2022/23 financial year.

However, as the number of sports betters increased, so did the number of gamblers seeking assistance with their addiction.

This number increased from 1,365 — an 18% increase from the year before — to 2,299, which saw the number of gambling victims seeking help rise by 68%.

This rise in gambling has been attributed to increased access to online gambling activities through more affordable smartphones and Internet access, according to the National Gambling Board’s Keletso Makopo.

Many South Africans are also turning to sports betting as a way to make money quickly.

The effects of the under-regulated industry were highlighted in an interview by Newzroom Afrika, where a former sports bettor said that unemployment had been a major contributor to the uptake of gambling.

He said that while there is a chance to win something on the app, the risk of being able to turn what little they have into more to provide for their families often overpowers the need to make a responsible economic decision.

This was further exacerbated by platforms showing users how much other people are winning.

“It does get tempting. And then you feel that you need to put more money into it. I’m not sure if it’s real people winning or if the platforms are making it up,” the interviewee said.

In his case, he said that he had not lost a lot of money, but it was rather how addictive the platform had become that made him want to stop.