Famous Brands has raised concern over the growing impact of online gambling on consumer spending, saying that the surge in betting activity is eroding disposable income and weighing on restaurant traffic.
In its latest annual report, the Debonairs and Steers owner indicates that online gaming platforms are now a big factor shaping consumer behaviour.
“The rapid growth of online gaming platforms has further eroded disposable income. In 2023, R1.1-trillion was wagered by consumers in the SA gambling industry, 40.2% higher than in 2022. Total revenue generated from gambling was R59.3bn. Of this revenue, 60.5% is attributed to betting, which is largely dominated by online players,” it says.
A report by investment management firm Perpetua, says gambling has undergone a seismic transformation in the past five years, driven by online platforms. The sector generated R59bn in gross gaming revenue in 2024, growing 26% year on year.
“Gambling is about 1% of SA’s GDP, contributing R4.8bn to the fiscus and supporting 32,000 jobs,” Perpetua says. “betting has experienced explosive growth post-Covid, growing at 42% per year since 2020.”
The gambling industry is now split between traditional operators — mainly casinos, bingo halls, and limited payout machines — and online betting platforms. The firm says that while land-based operators such as Sun International and Tsogo Gaming are expanding digital offerings, their online revenues remain a small portion of total earnings.
“Tsogo Gaming is betting on the potential of a new Western Cape casino to diversify its revenue streams. At the same time, it is scaling up its playTsogo online platform, which now generates R200m annually — about 2% of its gross gaming revenue. Public disclosures on the betting segment are limited but the major players driving its rapid growth are the likes of Hollywoodbets, Betway and Supabets,” Perpetua says.
Tsogo Sun previously expressed frustration over prolonged regulatory delays and monopolistic conditions in the Western Cape that have stalled its plans to develop casino and hotel facilities in Somerset West and the Strand.
The group argues that the lack of progress is hindering job creation, tourism growth and fair competition in the region.
In contrast, online gambling has surged due to its accessibility, low fixed costs and aggressive marketing. Slick apps, flexible payment gateways and parlay betting structures have enabled operators to scale rapidly and maximise margins. As a result, betting now accounts for 61% of gross gaming revenue, outpacing casinos at 29%, it says.
The growth of online gambling raises sustainability and ethical questions. Perpetua says “problem gambling” has increased five-fold from 6% in 2017 to 31% in 2023. Alarmingly, 56% of problem gamblers wager because they need money, with many being unemployed or earning less than R15,000 a month.
“Problem gambling has the potential to destroy SA’s social fabric,” says Perpetua. “While excessive gambling may boost short- to medium-term profits of companies, it is not sustainable. Problem gamblers often face financial ruin and burnout, making their lifetime value highly volatile.”
Perpetua says a market reliant on problem gamblers carries ethical and regulatory risks, exposing operators to potential lawsuits and fines that could exceed the revenue earned from such users.
Famous Brands says that declining consumer spending — worsened by gambling, inflation and unemployment — is affecting average transaction sizes and the frequency of restaurant visits. In response, the group has committed to expanding its range of retail products for at-home consumption.
The National Gambling Board expects betting to grow by more than 20% annually in 2024-27, while casino revenues are expected to remain flat, Perpetua says. According to Statista, SA’s gambling market is expected to generate $3.49bn in 2025, growing to $3.81bn by 2029.
The market is projected to have 27.2-million users by that time, with user penetration reaching 39.4%.
Gerrie Fourie, outgoing CEO of Capitec, which has 24-million clients, a year ago warned the surge in sports betting is something the country has to have a conversation about.
“It’s not only an SA problem but an international one. Sports betting companies have entered the market in a big way,” he said.
Data from the National Gambling Board shows sports betting in 2022/23 accounted for more than half of all betting activities in SA, up from 10% in 2010.
Betway has recently taken over from DStv as the title sponsor of SA’s premier football professional league.
Another notable player is newcomer SuperSportBet, formed from a partnership between Nigerian betting company KingMakers and MultiChoice.
With Kabelo Khumalo
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