Sun International has flagged tightening regulation and potential tax increases as its top risks, warning that the changing policy frameworks could disrupt growth and increase compliance costs as the gaming industry evolves.
The gaming, hospitality and entertainment company said in its latest annual report that the regulatory and legislative environment governing gambling is changing frequently, with new laws and amendments posing operational and financial challenges.
“Existing laws are amended and new laws or regulations are introduced, some of which may be impractical and/or onerous for the group’s businesses,” it said.
Among the developments is the National Treasury’s proposal to introduce a 20% tax on online bookmakers.
The Treasury has proposed a nationwide tax on online betting revenue, presenting it as a way to curb excessive gambling but prompting pushback from the industry. Alongside this, the government and advertising industry are tightening gambling laws and marketing rules to crack down on illegal operators, strengthen oversight and better protect children and vulnerable consumers.
“The proposed code presents an opportunity for industry to collaborate to formulate and adhere to a gambling advertising code that protects the public through responsible gambling advertising rules that are practical and informed by commercial realities, over and above the advertising restrictions in gambling legislation,” said Werksmans Attorneys.
These measures come as authorities intensify oversight of the fast-growing online betting sector.
Sun International said regulatory fragmentation across national and provincial levels is adding complexity with changes to casino licences, gaming rules and tax legislation affecting operations in different jurisdictions.
The group warned that stricter regulation could have unintended consequences, including driving consumers toward illegal and unregulated gambling platforms.
“The proliferation of illegal gaming sites remains a key concern for the company,” it said.
This risk is compounded by rapidly changing market dynamics, with online gambling now accounting for a growing share of industry revenue. While this transition presents growth opportunities, it is also intensifying regulatory scrutiny and exposing operators to evolving compliance demands.
The proliferation of illegal gaming sites remains a key concern for the company.
— Sun International
Chair Sam Sithole said in his letter to shareholders that the group is strengthening its responsible gambling and compliance frameworks in response to these pressures.
“Responsible gambling remains central to our values and long-term sustainability. As pioneers in responsible gambling, we continue to invest in protecting vulnerable players through robust customer safeguards, ethical marketing and industry leadership,” he said.
The group is also taking a more active role in shaping industry policy, including plans to form an Online Gaming Industry Council with other operators to engage regulators on issues such as responsible gambling and legislative changes.
Despite these efforts, Sun International said regulatory uncertainty remains elevated, warning that ongoing policy shifts could affect profitability and long-term planning.
The risks are further heightened by the expansion of illegal gambling markets, which operate outside formal regulatory frameworks and tax structures. Sun said this not only undermines licensed operators but also weakens consumer protection and industry oversight.
The group said maintaining compliance while remaining competitive will be critical, particularly as new entrants and digital platforms reshape the market.
“The group will continue to focus on maintaining and growing our market share by leveraging group resources to provide customers with an omnichannel experience,” it said.
Sun International reported income from continuing operations of R13bn for the 2025 financial year, with adjusted earnings before interest, tax, depreciation and amortisation of R3.4bn. Growth was driven largely by its online betting platform, which recorded strong gains, while the casino segment faces ongoing pressure.
South Africa’s gaming market continues to shift toward online channels, which now account for about 60% of market share and generated about R51bn in gaming revenue. This migration, with new entrants and changing consumer preferences, is pressuring traditional land-based formats, with total land-based casino gross gambling revenue declining 4.6% in 2025 and segments such as LPMs [limited payout machines] contracting over the longer term," the group said.
“Failure to respond to these changes could lead to a loss of market share, weaker revenues and profitability, and reputational and shareholder value impacts.”
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