South Africa proposes new taxes after online gambling growth
Online casinos and gambling and betting platforms have become a steady source of revenue for South Africa, and some regulators are now considering fresh levies and additional taxes to generate more funds based on the successes of these platforms.
Increasingly, more and more countries are moving towards legalized and regulated online betting as a means to both ensure player safety for residents and to generate new tax revenues, which can be used to support their local economies through a variety of means.
The South African gambling sector has reportedly brought in a huge amount of revenue during the 2024-2025 fiscal year, and the local government wants a larger share of that revenue. A proposal by the South African government aims to impose additional taxes on online gambling in an effort to increase its share of the lucrative online gaming industry.
What online gambling tax change is South Africa proposing?
The National Treasury in South Africa has offered an aim of taking increased action against the concerns that exist around about gambling in the country while also increasing the revenue the country is able to derive from the practice. The treasury is asking for public input on a significant 20% national tax on gross gambling revenue.
If passed, this new tax will increase the total gambling tax rate between 26% and 29%, after taking into account the provincial gambling levy. Critics argue that higher tax rates will hold back the growth of online gambling, ultimately resulting in lower revenues for the country when legal options are less able to generate money.
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South Africa’s gambling sector has seen a massive surge in both players and popularity since 2021. Online betting sites have become more prevalent and accessible than ever before thanks to newer technology and mobile phones becoming more common among South African residents. The treasury has noted that these online platforms are available anywhere, at any time, to prospective players. The proposed tax is to offset any perceived social cost that the national treasury claims is borne by South Africa and its citizenry.
The National Gambling Board reports that South Africa’s gambling industry made a reported turnover of R1.5 trillion in the 2024 – 2025 financial year, which is a 31.3% increase from the previous year. Betting activities, including sports betting and horse racing, accounted for 75% of the turnover. Online sports betting and the National Lottery were the more popular forms of gambling in the country.
This growth is undoubtedly impressive, but the NGB also reports that illegal gambling activities are rampant, accounting for roughly 62% of the overall gambling volume. Unlicensed offshore operators avoid both regulations and taxes, ultimately harming South Africa.
Critics of the new online gambling tax proposal suggest that by making it more difficult and expensive for players to engage with licensed operators, even more of those players will be pushed towards unregulated outlets. This imposes a greater safety risk for those players while also depriving the South African government of any revenues.
How South Africa’s online gambling tax proposal differs from others
South Africa is far from the only country considering shaking up its online gambling marketplace with new tax proposals. Finland is shaking things up in its gambling scene by doing away with the state’s monopoly and allowing online casino licenses, which will help private operators enter the market. The country will also introduce a 22% GGR, but compared to South Africa, Finland will have greater regulations and player protection mechanisms. South Africa is currently focusing on heavier taxes without incorporating the same level of regulations and safety policies, thus the greater criticism its proposal is receiving.
South Africa’s current gambling laws are outdated and based on the National Gambling Act of 2004, which is why many provinces lack proper regulations that reflect the current state of the industry. This is a legislative issue that likely requires significant reform. Many experts argue that the country should first turn its focus towards adjusting domestic gambling laws, rather than simply increasing taxes.
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Khizar Mundia has been playing video games for as long as he can recall. Things have come a long way since the many days he spent playing the original NES, though. He now covers a variety of competitive games and esports, as well as the world of streaming, ranging from Twitch to Kick. If it’s of interest to gamers, it’s of interest to Khizar.
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