JOHANNESBURG – South Africa’s National Treasury has proposed implementing a 20% tax on online gambling revenue as the country grapples with a surge in digital betting that has reached alarming proportions, driven by economic desperation and widespread smartphone usage.
The proposed levy, outlined in a Treasury discussion paper released recently, could generate approximately R10 billion in additional government revenue. However, officials stated that the tax’s primary objective extends far beyond revenue collection.
“Due to the surge in online gambling and its impact on society, it is proposed that a 20% tax is applied on gross gambling revenue from online betting, including interactive gambling,” the National Treasury stated, adding that the measure aims to “discourage problem and pathological gambling and their ill effects.”
The proposal comes as South Africa faces what experts describe as a gambling epidemic. Data from the National Gambling Board reveals that approximately R1.5 trillion was wagered across the country’s gambling industry in the 2024/25 financial year – representing a staggering one-third increase from the previous year.
The scale of participation is equally alarming. Gambling participation among South Africans has more than doubled, jumping from 30.6% in 2017 to 65.7% by the end of 2023. The National Lottery and online sports betting have emerged as the most popular forms of gambling, with young adults aged 25 to 34 comprising the largest demographic of participants.
Economic desperation drives digital betting boom
The explosive growth in online gambling reflects broader socioeconomic challenges facing South Africa, which maintains one of the world’s highest unemployment rates. The widespread availability of smartphones has made digital betting platforms easily accessible to millions of South Africans seeking quick financial relief from economic hardship.
Geographic data shows the concentration of gambling activity, with three provinces – Mpumalanga, the Western Cape, and Gauteng – accounting for more than 80% of total gambling turnover.
South Africa’s proposed approach aligns with international efforts to regulate the rapidly expanding online gambling sector. The United Kingdom currently taxes remote gaming at 21% of gross profit and is working to consolidate remote gambling levies. Similarly, New Zealand recently introduced a 12% offshore duty on online gambling profits.
The Treasury’s proposal also includes administrative reforms designed to streamline regulation and compliance. Local online betting operators would be required to register with the tax agency and provide the same detailed information they currently submit to provincial gambling boards.
“This should ease administration and industry compliance,” Treasury officials noted, suggesting the measures could improve oversight while reducing bureaucratic burden on legitimate operators.
Addressing a national crisis
The gambling surge has intensified calls from health experts, social workers, and community leaders for stronger government intervention. Recent studies indicate that 42% of South Africans now gamble monthly, raising concerns about addiction, household financial instability, and related social problems.
The prevalence of gambling advertising, particularly targeting vulnerable populations through social media and mobile platforms, has drawn particular criticism from advocacy groups who argue that current regulations are inadequate to protect consumers.
The Treasury’s discussion paper represents the beginning of a consultation process, with final implementation details yet to be determined. The proposed 20% rate would apply to gross gambling revenue from online betting and interactive gambling platforms.
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Industry stakeholders are expected to provide feedback on the proposal, though early reactions suggest operators may face significant adjustments to their business models if the full 20% rate is implemented.
The government’s dual focus on revenue generation and harm reduction reflects a growing recognition that South Africa’s gambling boom has created both fiscal opportunities and serious social challenges that require comprehensive policy intervention.
As the consultation process moves forward, policymakers face the complex task of balancing economic considerations with public health concerns while ensuring that any new regulatory framework can effectively address the scale and scope of South Africa’s evolving gambling landscape.
Read the National Treasuries full discussion paper on gambling here.
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