With the National Treasury considering a 20% tax on online gambling activities to rein in spending, the South African Reserve Bank says increased betting has not significantly affected household spending.
In its latest quarterly bulletin released last week, the Bank drew on data from Stats SA and the National Gambling Board to make sense of spending on gambling in the country.
The data shows that betting constitutes the largest share of gross gambling revenue (GGR), having risen from 12.4% in the 2012/13 financial year to 69.8% in 2024/25 — with online betting revenue accounting for 85.5% of total betting revenue in 2024/25.
Casinos’ contribution to GGR declined markedly from 78.4% to 22.3% over the same period, indicating a clear shift from retail to online platforms.
“Recent reports on gambling suggest that annual household spending on gambling exceeded R1.5-trillion in the financial year ending March 2025.
“However, this is misleading, as the R1.5-trillion refers to gambling turnover, which is often mistakenly interpreted as expenditure on gambling,” the bulletin reads.
“This would imply that households spent about 32% of their disposable income on gambling, which equates to more than 20% of South Africa’s GDP over this period.”
The Treasury spooked bookmakers last year when it announced its intention to impose a 20% tax on gambling as one of several measures to rein in a surge in online betting in particular.
South Africa’s licensed bookmakers have pushed back against the 20% gambling tax proposed by the National Treasury, arguing it would create an effective tax rate of up to 39% for the industry and drive businesses in the sector to the wall.
The industry has told the Treasury that its proposed tax would decimate jobs and lead to an explosion in illegal online platforms, which already account for much of the market.
The Treasury’s consultation paper, released in November, acknowledges that taxing online gambling might lead to a proliferation of illegal platforms. “It should be kept in mind in the design of a tax instrument that an inappropriate tax regime could force legal gamblers and facilities to go underground and partake in illegal forms of gambling.”
If the Treasury has its way, it will demand that local suppliers of online betting register and provide the South African Revenue Service with similar information to that currently provided to the provincial gambling boards to collect provincial gambling tax revenue.
The department said in a consultation paper that the proposal is not fixated on revenue raising but on addressing the negative effects that online gambling is having on society.
The Bank’s quarterly bulletin said that as of January 2025, games of chance constitute 1.6% of South Africa’s CPI — a slight decrease from 1.8% between January 2022 and December 2024 — “signifying increased spending on other goods and services” relative to spending on games of chance.
“Despite the increase in household spending on games of chance, in nominal rand values, it is small when compared to the increases in the two essential goods and services categories.
“Although household spending on gambling, especially online betting, has increased notably in recent years, its contribution to total household spending remains minimal and relatively insignificant when compared to spending on essential goods and services.”
Research firm Trade Intelligence earlier this year raised serious concerns about the effect of online gambling on food security, consumer welfare and the retail sector as a whole, noting that punters are increasingly financing their betting with money that otherwise would have been spent on groceries.
Bookmakers have opened talks with the government to consider measures the sector can take to bar South African Social Security Agency (Sassa) social grant recipients and National Student Financial Aid Scheme (NSFAS) recipients from channelling taxpayer assistance to the scourge of online betting.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.