<\/p>\n
The pressure on household budgets is real in South Africa\u2019s current consumer environment and problem gambling sits alongside that pressure in ways that can be devastating.<\/p>\n
It is no secret that online betting has grown significantly in South Africa, so it is unsurprising that CEOs operating in this market are seeing signs of increased spending in this category.<\/p>\n
Read:<\/p>\n
Africa\u2019s CEOs warn online gambling is draining customer wallets<\/p>\n
But while problem gambling is real, not all gambling is problematic. Which is why any policy response should be built on a careful understanding of the issue, backed by accurate data.<\/p>\n
Anything else will produce policies that are ineffectual and risk driving problem gamblers into the arms of illegal and unregulated operators.<\/p>\n
Let\u2019s start with the data.<\/p>\n
In its most recent quarterly bulletin, the South African Reserve Bank (Sarb) offered an important corrective to one of the most widely cited claims in this debate.<\/p>\n
Despite the growth of online betting, household spending on gambling remains, in the bank\u2019s own words, \u201crelatively insignificant\u201d compared with spending on essential goods and services.<\/p>\n
The figure of R1.5 trillion that has dominated discussion does not represent what South Africans spend on gambling.<\/p>\n
Instead, it represents wagering turnover \u2013 the cumulative value of bets placed and recycled.<\/p>\n
Importantly, 90% and 97% of that R1.5 trillion sum is returned to players as winnings. Gross gaming revenue (GGR) is what licensed operators actually retain and makes up a small fraction of that headline number.<\/p>\n
Sarb data also shows that in 2024, games of chance accounted for 1.3% of household final consumption expenditure, compared with food at 16.6%. It quotes Stats SA data which indicates that 76% of spending on games of chance was by the top five highest income groups.<\/p>\n
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Assertions that South Africans at large are blowing the money they require for necessities, on gambling, are simply not backed by the data.<\/p>\n
None of this is intended to minimise the very real concerns around problem gambling.<\/p>\n
The financial consequences of addiction ripple outward into families, workplaces and communities. Signs of problem gambling must be taken seriously and reinforce the argument that South Africa needs better gambling regulation, not weaker or absent regulation.<\/p>\n
The critical question is what form that regulation should take.<\/p>\n
Regulation<\/p>\n
Channelisation \u2013 the proportion of total gambling activity that flows through licensed, regulated operators rather than through offshore, unlicensed platforms \u2013 is central to that question.<\/p>\n
Worldwide experience has shown that maximising channelisation should be the goal of regulators seeking to minimise problem gambling.<\/p>\n
According to H2 Gambling Capital, one of the world\u2019s leading gaming research firms, South Africa\u2019s online channelisation rate is around 83%.<\/p>\n
That means approximately one rand in every six wagered flows beyond the reach of South African regulators to operators that pay no local tax, fund no responsible gambling programmes and impose no consumer protections.<\/p>\n
Listen\/read:
Current SA consumer spending habits
Employees are gambling away their paycheques<\/p>\n
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There are already over 2 000 of these unlicensed offshore platforms actively targeting South African consumers, according to the South African Bookmakers\u2019 Association.<\/p>\n
This is why proposals to ban licensed domestic operators, or to impose taxes that tilt the competitive balance towards offshore alternatives, would be precisely the wrong response to a genuine problem.<\/p>\n
The Al Capone era in the US taught us that the answer to problem drinking is not prohibition. It just pushed it underground and handed it to criminals, leaving consumers without any protection. Likewise, online gambling cannot simply be switched off.<\/p>\n
When a government dismantles a licensed domestic industry, it does not eliminate gambling \u2013 it redirects it. The most vulnerable consumers lose the protections afforded to them by law and are left exposed to operators entirely beyond regulatory reach.<\/p>\n
The international evidence is clear. In Kenya, punitive taxation on licensed operators forced them to exit the market, shifting gambling to unregulated platforms. Tax revenue fell, consumer protections evaporated and the situation worsened for the very people the policy was designed to help.<\/p>\n
National Treasury\u2019s proposal of a 20% national tax on GGR must be considered in this light.<\/p>\n
Read:<\/p>\n
Treasury\u2019s 20% online gambling tax stirs controversy
\nStricter gambling advertising controls are on their way<\/p>\n
Layered onto existing provincial taxes and a 15% value-added tax (Vat) obligation that South African licensed operators must absorb, the burden on the regulated industry could reach as much as 44% of GGR. Unlicensed offshore operators face none of these costs.<\/p>\n
The competitive asymmetry this would create is a structural incentive for people to migrate away from the regulated, consumer-protecting sector.<\/p>\n
Sun International is strongly committed to regulatory reform. We agree that South Africa\u2019s gambling legislation, dating from 2004, does not adequately provide for online gambling.<\/p>\n
It is our view that the country needs a harmonised national legislative framework that protects consumers.<\/p>\n
But, importantly, new regulations must draw activity into licensed, tax-paying, consumer-protecting channels, and prevent billions of rands flowing to unregulated offshore operators.<\/p>\n
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Listen\/read:<\/p>\n
42% of South Africans gamble monthly, a rising social concern<\/p>\n
Sun International is a founder of the South African Responsible Gambling Foundation, which has for twenty-five years funded public awareness and counselling \u2013 programmes to which unlicensed and illegal operators have no obligation to contribute to.<\/p>\n
We have also recently co-founded the Betting Industry Body to engage constructively with government on these issues.<\/p>\n
As a company, we have already put in place robust age verification and self-exclusion tools to protect players, and we have completed a benchmarking exercise of our player protection standards against international best practice.<\/p>\n
The goal must be to ensure that consumers who choose to gamble do so within a framework that protects them, and that those who develop problematic behaviours are supported.<\/p>\n
These are outcomes the licensed, regulated industry is positioned to deliver and which unregulated offshore operators never will.<\/p>\n
Read:
Online betting market explodes to twice the size of casinos
Gambling surge threatens youth financial stability<\/p>\n
We are committed to being a constructive partner in building the right framework that balances player protections and the sustainability of the industry.<\/p>\n
We have the experience, the track record and the genuine commitment to responsible gambling to contribute meaningfully to this conversation and we look forward to doing so.<\/p>\n
Ulrik Bengtsson is CEO of Sun International.<\/p>\n
#Online #gambling #Dont #good #intentions #lead #bad #policy<\/p>\n","protected":false},"excerpt":{"rendered":"
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