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The government aims a crackdown on illegal online betting platforms that are said to account for 62% of a market on which South Africans spend billions of rand.New measures suggest the National Gambling Board (NGB) has yielded to industry pressure to restrict unregistered online platforms providing betting services to consumers.The NGB has gone to market looking for service providers to block illegal sites, which industry research shows have attracted about 16-million South Africans and more than R50bn in gross gambling revenue annually.The regulator has issued a request for expression of interest to block illegal online gambling websites.The watchdog said that blocking illegal gambling websites would contribute towards the suppression of illegal gambling activities as envisaged in the National Gambling Act (NGA).The NGB acknowledged in the expression of interest document that illegal gambling in South Africa has expanded rapidly in land-based and online forms, fuelled by technological advancements, policy gaps and organised criminal activity. This compromises the integrity of the regulated gambling industry, erodes provincial and national revenues and exposes vulnerable groups, including minors and problem gamblers, to significant harm.“South Africa is struggling to enforce against illegal interactive gambling, offering gambling activities to South Africans without a licence,” the expression of interest reads.“The enforcement challenge is exacerbated by the offshore location of these illegal operators, as they are coming from foreign jurisdictions. “In recent years, illegal operators have increasingly exploited online platforms, internet cafés, the use of digital wallets and cryptocurrency transactions, and cross-jurisdictional loopholes to avoid detection and regulatory oversight. Licensed operators are also affected by unlawful competition, noncompliant online betting activities, and practices that undermine the fairness of the regulated environment.“Websites will be blocked each time illegal operators try to offer illegal gambling to local punters. The data collected will be shared with law enforcement to ensure that illegal online gambling operators are held to account in court and face penalties as envisaged in the NGA.”Licensed operators are subject to strict regulatory oversight, including age verification, anti-money-laundering controls and robust responsible gambling measures, safeguards that are largely absent in the illegal market.A study commissioned by the South African Bookmakers Association (Saba) shows that illegal offshore gambling dominates South Africa’s online betting landscape.Saba CEO Sean Coleman said illegal gambling occurs when South African players place bets on foreign-based online platforms that are not licensed locally.“The majority of online gambling activity in South Africa is still taking place outside the regulated system,” Coleman said. “That means millions of consumers are exposed to operators who pay no local taxes, provide no consumer protection and operate entirely outside of South African law.“Each time a player located in South Africa places a bet on a foreign-based online gambling site, an unlawful gambling activity occurs, with such illegal gambling activity being facilitated by, among others, the bank of the player in South Africa.“As such, South African banks, third-party payment providers, and credit card institutions serve as a conduit between the South African online gambler’s banking account and the foreign-based gambling website operator’s banking account, without which the unlawful gambling transaction would not be able to occur.”The move to rein in illegal online betting is part of a wider crackdown on the activity, which includes legal entities.Among measures the government is contemplating is a ban on betting advertisements, as it did to the cigarette industry in the 1990s.The National Treasury has also proposed a 20% tax on the online gambling industry to curb harmful gambling.Critics say it will only channel punters to illegal platforms and become an administrative nightmare for the South African Revenue Service.For the 12 months to March 2025, industry data shows the total value of gambling turnover in all gambling modes amounted to R1.5-trillion, including recycled funds (money wagered, won back and wagered again).South Africa’s bookmakers have opened industry talks to consider measures the sector can take to bar Sassa social grant recipients and National Student Financial Aid Scheme (NSFAS) recipients from channelling taxpayer assistance to online betting.
