South Africa Introduces a 20% Online Betting Tax

South Africa is discussing a proposal from the National Treasury to introduce a 20% national GGR tax on online betting and interactive gambling.

The new levy will be added to existing provincial taxes and is raising concerns across the regulated market.

Brief Overview of the Online Betting Market in South Africa

The gambling market in South Africa is showing growth across multiple indicators. The betting volume in the 2024–2025 financial year reached $87 billion, which is 30% higher than the previous year. The most popular formats are lotteries and online sports betting. Most players are aged 25–34. 90% of South Africans have experience with gambling. Young South Africans spend an average of 41% of their income on betting, which exceeds their spending on food.

Key Points of the 20% Tax Initiative

The proposed new levy applies to online betting and interactive gambling. The new 20% tax could generate about $580 million in additional revenue, according to government estimates. The primary goal of the initiative is “to curb problem and pathological gambling and its negative consequences”. The overall tax burden for online operators could approach 30%. There is still no unified law on online gambling, and regulation remains fragmented.

Legal Risks for the Market

The introduction of the tax raises several legal issues. Under current law, interactive gambling remains illegal, yet its revenue is proposed to be included in the tax base. The Constitution assigns a key role to the provinces, and the introduction of a central tax affects this principle. The existing system of division of powers between the provinces licensing, oversight, and local taxes may be weakened.

Concerns of the Market and Operators

Market participants have raised several concerns. At present, there is no assessment of social harm and no transparent method for calculating the tax rate. Tax revenues are not earmarked for addiction treatment, research, or strengthened supervision. High rates combined with weak enforcement increase the risk of players moving to the offshore segment.