Employees are gambling away their paycheques

New research shows that 40% of working South Africans now gamble frequently, and many are doing so to bridge monthly shortfalls.

The latest insights from Old Mutual Corporate provide further evidence of the extent to which gambling is no longer seen as pure entertainment, but as a symptom of the deep financial malaise facing ordinary South Africans.

“What we are seeing is a society under strain,” says Keri-Lee Edmond, head of business intelligence at Old Mutual Corporate.

“Short-term relief is consistently winning over long-term security because many employees simply do not have the financial reserves they need to cope.

“This is no longer an individual challenge. It is a workforce-wide issue that employers need to factor into how they support their people.”

The trend is prompting calls for companies to rethink support beyond salaries and to strengthen workplace interventions that help staff manage short-term financial shocks without compromising long-term security.

“Our research shows that for many South Africans, this is no longer just about recreation or entertainment.

“Individuals are gambling to meet daily needs and expenses, pay off debt, or in an attempt to secure higher incomes,” says Edmond.

ADVERTISEMENT

CONTINUE READING BELOW

“Statistically, we know this is not a sustainable way to improve financial outcomes.”

In February, the Department of Trade, Industry and Competition (dtic) announced that it is drafting new rules and standards for gambling advertising, which are expected to be published by July.

This follows growing alarm over the social harm caused by gambling, particularly among vulnerable groups.

Online gambling platforms like Hollywoodbets and Betway have been accused of bombarding South Africans with advertising without adequately explaining the risks.

Research by Experian and Vault22 shows that up to 50% of social security grants is blown on bets as those in financial distress turn to gambling to make ends meet.

Research house Trade Intelligence reported in February this year that 39% of online punters are gambling more than they did a year ago.

Read:

The National Gambling Board (NGB) released statistics last year showing that R74 billion was being siphoned out of the economy, mostly to online gambling platforms such as Betway and Hollywoodbets.

Source: Stats SA, EconData, and Codera Analytics

ADVERTISEMENT:

CONTINUE READING BELOW

The extent of the problem varies by province – due in part to provincial differences in gambling regulations – with spending increasing noticeably in Limpopo, Free State, Gauteng and Northern Cape, according to research house Codera.

Read:

Rolling the dice: SA’s growing appetite for gambling and betting

“South Africa’s gambling sector is expanding, but fragmented regulations across provinces can create loopholes, uneven oversight and opportunities for operators to seek provinces with weaker capacity”, according to Lee-Anne Kotze, head of financial crime compliance for Africa at LexisNexis Risk Solutions.

“However, there is a clear increased demand for technology to support identity verification, know-your-customer (KYC), fraud prevention, and transaction monitoring from both operators and financial institutions serving the sector.”

A coordinated supervisory approach that mirrors frameworks used in other digital finance sectors is key to building a safer industry and ensuring operators maintain robust anti-money laundering compliance, adds Kotze.

Gambling is a risk to employers

Old Mutual Corporate says gambling carries potentially serious operational risks for employers.

Financially stressed employees may show reduced focus and lower productivity, signalling that household pressure is spilling into the workplace.

ADVERTISEMENT:

CONTINUE READING BELOW

“Employees need support that helps them manage immediate financial pressure while also building long-term stability,” says Edmond.

“Employers can make a meaningful difference by offering responsible benefit flexibility, alongside timely and targeted financial guidance that helps employees make confident decisions at key moments.”

Gambling is more pronounced among younger and lower-income employees, but is by no means confined to these groups, says Edmond.

“Gambling activity is evident across income bands and demographics, reflecting debt-driven pressure and rising cost of living.

“Under these conditions, gambling is increasingly becoming part of how people manage their money day to day, with scarce income being directed towards high-risk avenues in an attempt to cover expenses and keep up with financial obligations.”

Listen/read:

42% of South Africans gamble monthly, a rising social concern

The National Gambling Amendment Bill, currently before parliament, proposes creating a national gaming regulator to provide stronger oversight of the industry, along with a register of unlawful operators and digital monitoring of gambling activities.

In the meantime, 107 labour, faith and civil society groups want to see a total national ban on all forms of online gambling and advertising, similar to the ban on tobacco advertising.

#Employees #gambling #paycheques