South Africa’s National Treasury has extended a consultation on the implementation of a nationwide iGaming tax.
Announced in November and scheduled to end on 30 January, authorities have confirmed that the deadline has been extended until 27 February, allowing more time for responses from industry stakeholders.
In an attempt to update South Africa’s gambling market, which is largely governed by the 2004 National Gambling Act, the National Treasury is proposing a 20% tax rate on gross gambling revenue from online activity.
Coupled with provincial tax rates, which vary between 6% and 9%, depending on the location and vertical, the country’s effective tax rate will sit between 26% and 29% if successfully implemented.
Though projected to raise over R10bn (£456.1m) per year for government coffers, the Ministry of Finance has emphasised that the main aim of the tax is to ensure that “external costs associated with gambling are internalised by those that provide and participate in gambling”, especially given the rise of online gambling.
The proposal stated: “Advances in technology have made online gambling more accessible, changing how people gamble and increasing the variety of gambling products available, which gamblers can now access from anywhere, at any time. It transcends the provincial boundaries and cannot be realistically and fully administered at a provincial level.
“From a public policy perspective, there should be no problem with recreational gamblers as they do not place any external costs on society. However, to the extent that problem and pathological gambling impose a cost on society (externalities), it is in the public interest that such behaviour be regulated or reduced.”
Road to legalisation?
Despite online sports betting remaining the only legalised form of remote gambling in South Africa, the National Gaming Board (NGB) has found that operator GGR has continued to rise year-on-year, largely driven by betting activity, both online and retail.
Operators reported revenue of R74.5bn (£3.3bn) in the 2024 financial year, up 25.6% YoY, as players wagered over R1.5trn (£66bn).
Previously, a 2008 amendment was intended to legalise the online casino vertical, but it has not yet been implemented. However, the introduction of a remote gambling tax may reopen these discussions and provide the push needed to push through iGaming reform.
The move to increase regulation also comes as warnings intensify over black market activityin South Africa.
Last month, Lungile Dukwana, the Acting Chief Executive Officer of the NGB, warned players over heightened engagement with illicit operators during the festive period, and the risk posed by the underhand tactics utilised by the unlicensed industry.
“The festive season often brings increased financial pressure and emotional stress, which can escalate risky gambling behaviour,” said Dukwana.
“Problem gambling can affect anyone, regardless of age, background, or income level. Early intervention is key to avoiding financial loss, relationship breakdown, or mental-health harm.”
Earlier in the year, Parks Tau, Minister of Trade, Industry, and Competition, also pushed his department to commence the appointment of a National Gambling Policy Council and the creation of a new strategy to tackle illegal gambling.
The rejuvenated strategy placed a strengthened focus on eradicating illegal online gambling ads and providing increasing clarity in the gambling framework after a seven-year operational hiatus that last saw the Council convening in 2018.
