Partially Regulated
The South African gambling industry is regulated by various National and Provincial legislation, rules and regulations. These norms and standards are required to be adhered to by licence holders and are enforced by the National Gambling Board (NGB) and nine (9) Provincial Licensing Authorities/Provincial Gambling Boards. Despite the open regulation of land-based gambling products for private operators, which has wide-spread enforcement throughout the country, the regulation of online gambling products remains restricted to the betting products that are licensed with a South African bookmaker (See the Gambling Sector Performance Summary 2021/2022; DTI Gambling in South Africa publication page 3). At present, online gambling (i.e. interactive gambling such as online poker, online casino, online bingo etc.) is strictly prohibited and is regarded as illegal in South Africa. In the circumstances, it is not possible to obtain a licence for online gambling products in South Africa.

Market Size
Due to the apparent prohibition of online and interactive gambling, the market size for online betting is relatively limited. The market size for online betting is further limited by the internal restrictions that are prescribed by the Provincial Licensing Authorities, which limits the maximum number of bookmakers that are able to be present in the market for a prescribed period. This limitation is further exasperated in practice, as only four (4) out of the nine (9) Provincial Licencing Authorities practically offer bookmaker licences that enable licence holders to offer online betting as a product. At present, the betting industry generates 44.9% of the total Gross Gambling Revenue (GGR) in the gambling industry in South Africa. However, there is no statistical data that indicates the precise amount that online betting attributes to this percentage in this regard. For more information on the gambling market in South Africa, refer to the National Gambling Statistical Report.

Competitive Landscape

• The online betting industry is extremely competitive and there are a wide range of betting products that may be offered
• The Gambling Sector Performance Report 2021/22 highlights that online betting has experienced exponential growth in the last two (2) years and the demand for online betting products is continually increasing as it has become the overall “preferred mode of gambling”
• As previously mentioned, the Provincial Licensing Authorities, limit the maximum number of bookmakers that are permitted to operate in the market for a prescribed period.
• Further information on the number or the respective register of licensees may be accessed on the Provincial Gambling Boards website, on the links provided below:

Localisation

• In consideration of the local payment requirements prescribed, all necessary payments are to be made to the relevant National or Provincial Gambling Board in terms of the National and Provincial legislation, rules and regulations
• In respect of local advertising in South Africa, the Advertising Regulatory Board of South Africa and its Code of Advertising Practice, prescribe general advertising standards that must be complied with, however, it should be noted that this body does not expressly provide for advertising standards in relation to gambling. In contrast, National and Provincial legislation, rules and regulations prescribe strict advertising standards that are required to be complied with. In this regard, the NGB and the Provincial Licensing Authorities are the relevant bodies that are responsible for regulating and enforcing gambling advertising compliance. In practice, advertisement of land-based gambling activities are more prevalent, as seen on billboards and various radio and television commercials

Top Key Attractions and Challenges

Attractions

• In comparison to other international legal regimes, the overall cost burden for levies, fees and taxes is relatively low, and is not too exorbitant
• There is a wide range of betting products that may be offered
• Comprehensive National Responsible Gambling Program, which is offered to the public free of charge by the South African Responsible Gambling Foundation

Challenges

• The South African gambling sector is fraught with regulatory uncertainties pertaining to the online gambling industry. The current legal regime pertaining to the online gambling industry is restricted to the betting industry. Technical applications of the law continue to be considered for introduction of various online gambling opportunities but these cannot be considered until the necessary changes to South Africa’s gambling legislation is considered holistically. Thus, transformative bills that were attempted to be introduced in the past, such as the Remote Gambling Bill of 2022, requires material review and finalization to transform and diversify the current online gambling landscape (NGB – Annual Report 2021-2022 page 42).
• In obtaining a bookmakers licence for offering online betting services or products, the licence holder is required to have a registered or physical address in the respective province where the licence application is submitted. As such, obtaining a land-based bookmakers licence is seen as a prerequisite to being authorised to offer online betting services to the public
• Further, given the limitation of bookmaker licences that are issued each year, it may pose various obstacles to potential applicants entering the online betting industry in South Africa