All bets are on: How online gambling is reshaping SA’s consumer wallet

Interestingly, this shift coincides with a substantial reduction in mobile data costs across South Africa. Africa Analysis estimates that the median price per gigabyte for popular prepaid bundles fell from R129 in 2020 to just under R70 by the end of 2023. Telkom’s own figures reinforce this trend, with its effective price per gigabyte dropping from R19.66 in 2018 to roughly R10.56 in 2023.

This aligns with a broader structural shift seen globally: as data becomes cheaper and connectivity more ubiquitous, consumers increasingly live, work, communicate, shop, and entertain themselves through digital channels. South Africa is no exception with digital media, mobile-first engagement, and app-based services now capturing a growing share of daily attention, reshaping both consumption habits and where discretionary spend ultimately flows.

Figure 3: SA household consumption – Six-year compound annual growth rate 2015 constant price (from 2018 to 2024)

Source: SARB; Fairtree

Figure 4: Stats SA CPI main category weight changes from 2019 to 2023

Source: STATSSA; Fairtree

The regulation: Is SA gambling oversight fit for purpose?

South Africa’s gambling regulatory landscape is complex and multi-layered, reflecting a concurrent national and provincial governance model.

National level: The National Gambling Act establishes uniform norms and standards, while the National Gambling Board (NGB) oversees compliance, maintains national registers, and coordinates policy through the National Gambling Policy Council.

Provincial level: Each province, via its own gambling board, handles the operational side: issuing licences, regulating and monitoring operators, enforcing provincial laws, and collecting provincial gambling taxes.

In essence, the national government sets the framework, and provincial authorities manage licensing, enforcement, and day-to-day oversight.

South Africa ranks “Medium” on global gambling regulatory stringency, with provincial gambling taxes set at 6.5% of gross gambling revenue (GGR) (see Appendix A for cross-country comparisons).SA Regulated Gambling companies pay gambling tax to the province in which they are licenced. The Western Cape and Mpumalanga have been the most successful in attracting gambling licences, as shown in Figure 5 below. Two-thirds of national gambling revenue is generated by these two provinces alone, but this revenue stream is tiny in comparison to the overall provincial revenue allocation.

Figure 5: SA GGR per province – 61% of the national gross gambling revenue is generated by the Western Cape and Mpumalanga

Source: National Gambling Board, Fairtree

Provincial revenue from gambling: A small slice of the pie

Examining the breakdown of South African provincial revenue highlights that the vast majority (~80%) comes from the National Budget, while only about 3% is generated from provincial “own revenue.”

In 2024, all nine provinces together collected R4.8 billion in gambling taxes, representing only 0.7% of total provincial revenue. By comparison, motor vehicle licensing contributed 2% (R13.7 billion). Looking at one of the largest provinces in terms of gambling licences: the Western Cape reported total revenue of R81 billion last year, of which R3.9 billion came from own receipts, and R1 billion was gambling taxes; equivalent to only 1.2% of the province’s total revenue.

This underscores that, while gambling generates significant GGR, its impact on provincial finances is relatively modest.

Graph 6: Provincial revenue – Provincial own revenue (which includes gambling tax) is only 4% of total provincial revenue

Source: National Treasury provincial budgets and expenditure review, Fairtree

Could South Africa increase gambling regulation?

Yes. South Africa currently ranks mid-tier globally in terms of gambling regulatory stringency, so there is room to tighten oversight. However, any change to the regulatory framework would be complex due to the concurrent national and provincial structure. Nationally, the fiscus benefits from corporate tax and VAT collections from the licenced operators.

Current taxation in the sector includes:

• Corporate tax: 28%
• VAT: 15%
• Provincial GGR levy: 6.5%

Because gambling is regulated through a concurrent national–provincial framework, any redesign of the regulatory architecture would require alignment between provincial authorities and the National Government. This is challenging in practice, given that provinces benefit differently from gambling activity and are often governed by different political parties.

Experience from developed markets highlights the trade-offs of regulation. According to PwC’s report, “Impact of the Taxation and Regulatory Environment on European Online Betting & Gaming Markets”, higher gambling taxes do not necessarily inhibit industry growth. In contrast, overly restrictive regulation tends to drive activity offshore or toward illicit operators, shrinking the taxable base.

In South Africa, this is particularly relevant. The Yield Sec South Africa 2023/2024 study (via SABA) found that 62% of online gambling activity occurs on illegal platforms, with only 38% captured by licensed operators. This suggests that recent growth in legal GGR may partly reflect migration from illegal to legal channels, rather than pure market expansion.

The sector also contributes meaningfully to employment. According to the Mail & Guardian, approximately 14,000 jobs were created in the gambling industry during the 2023–2024 financial year. Any regulatory tightening, therefore, involves a policy trade-off: while reducing harm is necessary, over-regulation risks suppressing job creation and shifting activity to unlicensed operators, reducing both employment and tax revenue.

Lower-friction interventions could strengthen regulation without requiring parliamentary approval:

• Advertising controls: Limit ads to late-night broadcast windows, restrict misleading “win big” messaging, and prevent targeting of minors or vulnerable groups. High-visibility placements, such as sports sponsorships, could be curtailed.
• Player protection mechanisms: Introduce a national high-risk or affordability flag list, accessible to all licensed operators, to prevent individuals who cannot afford to gamble (e.g., SASSA or NSFAS beneficiaries) from opening accounts. But this would require participation from both provincial and national governments.

In short, there are targeted measures that can reduce harm and improve regulation while minimising unintended consequences on employment and the legal gambling tax base.

Conclusion

South Africa’s online gambling sector has shown strong growth, capturing a rising share of discretionary spend and generating meaningful economic contribution to the fiscus through job creation and tax revenue. However, this growth carries significant social risks: a large portion of online activity still occurs on unregulated platforms, exposing consumers to problem gambling and financial harm. Experience from more mature markets shows that regulatory tightening can help mitigate these risks, but overly restrictive measures risk slowing legal market growth, pushing activity into the illegal space, and reducing both tax revenue and domestic employment, all while weakening consumer protections in the unregulated realm.

A sustainable, and importantly responsible, South African gambling industry depends on operators’ ability to balance commercial opportunities with robust consumer protection measures, including responsible advertising, affordability checks, and tools to prevent abuse. Crucially, this requires effective oversight by a capable national authority working collaboratively with provincial bodies, ensuring the system acts in the best interest of South African consumers.

Appendices:

Appendix A: Stringency rating by country gambling regulation

Source: Industry Wired; NGB; Various country platforms, Fairtree

*Method for “Stringency” Ranking

Weights were assigned roughly as follows:

• Operator tax (50 %) – Measured by % GGR or turnover equivalent.
• Player-level tax (30 %) – Effective marginal rate and enforcement.
• Regulatory restrictiveness (20 %) – Bans, product/channel limits, compliance burden.

Appendix B: PWC Report – Impact of the Taxation and Regulatory Environment on European Online Betting & Gaming Markets

Source: PWC – European regulation & taxation market study