62% of South Africa Gambling Activity on Unlicensed Sites

South Africa’s Black Market Accounts for 62 Percent of Gambling Activity – Industry Calls for Stronger National Enforcement

Key Takeaways

• A YieldSec study cited by the South African Bookmakers’ Association estimates that 62 percent of gambling activity in South Africa takes place on unlicensed sites.
• SABA CEO Sean Coleman says enforcement falls under the National Gambling Board but argues the body lacks sufficient resources and skills.
• South Africa’s provincial licensing system creates compliance challenges for nationally active bookmakers.
• The National Gambling Board has launched an online gambling whitelist as part of efforts to address illegal operators.
• Consultations on a proposed 20 percent national tax rate on online gambling profits have concluded, with no further update so far.

Majority of Gambling Activity Reportedly Occurs on Unlicensed Sites

A significant share of South Africa’s gambling activity is taking place outside the licensed market. According to a recent YieldSec study cited by the South African Bookmakers’ Association, 62 percent of gambling activity in the country is conducted through sites that are not licensed domestically.

Sean Coleman, Chief Executive Officer of SABA, attributes this trend primarily to shortcomings at the national level rather than to the country’s provincial regulatory structure alone. While he acknowledges that provincial fragmentation plays a role, he states that enforcement of illegal gambling sits within the legal framework of the National Gambling Board. In his assessment, the NGB is currently under-equipped to deal with the scale of offshore and unlicensed activity.

Coleman describes the regulator as lacking sufficient resources and specialised skill sets to address the illegal market effectively. He also notes that the industry has expressed willingness to cooperate but has not been formally approached to assist enforcement efforts.

Provincial Licensing Creates Operational Complexity for Bookmakers

South Africa’s gambling regulation is structured at provincial level, with nine provinces imposing their own licensing conditions and compliance requirements. For bookmakers operating nationally with retail footprints, this means navigating multiple regulatory regimes simultaneously.

Coleman characterises this environment as an operational challenge. Companies must ensure that internal procedures align with varying provincial rules. Attempts to introduce national norms and standards have been initiated but, according to Coleman, have not yet produced effective harmonisation.

The regulatory framework has previously been tested in court. Coleman refers to a 2011 case in which the Gauteng Gambling Board moved against offshore operator Piggs Peak Casino, based in Swaziland, for offering online gambling to players in the province. The matter ultimately reached the Supreme Court of Appeal of South Africa, which confirmed that online gambling is considered to take place where the player is located. This decision placed offshore operators targeting South African consumers within the country’s regulatory reach.

Calls for Multi-Pronged Enforcement and International Benchmarks

Coleman argues that no single enforcement measure will be sufficient to curb illegal gambling. Instead, he calls for a coordinated strategy involving both government and industry stakeholders.

He points to international examples, including the United Kingdom and Australia, as benchmarks for disruption strategies. In the UK, a recent funding commitment of 26 million pounds has been allocated to tackle illegal gambling. Forthcoming legislative measures are expected to grant the UK Gambling Commission enhanced powers, including the ability to seek blocking of IP addresses and domain names linked to illegal websites.

By contrast, South Africa currently lacks comparable IP blocking powers at national level. This limits the regulator’s ability to prevent access to offshore sites that continue to attract local players.

Advertising and Sponsorship Highlight Visibility of Offshore Brands

Despite being unlicensed in South Africa, several offshore operators have achieved visibility through sponsorship and advertising. Coleman cites examples such as Dafabet sponsoring both the men’s and women’s national cricket teams, and 1xBet sponsoring teams in the Betway SA20 competition.

According to Coleman, these strategies increase brand recognition, particularly when matches are broadcast internationally. He argues that such exposure contributes to traffic flows toward unlicensed platforms. Traffic data, he says, indicates that offshore brands remain popular among South African players.

Coleman estimates that around 50 billion rand in gross gaming revenue flows to illegal operators. He adds that this results in billions more in lost provincial taxes and value added tax, although precise tax figures are not detailed.

Online Gambling Whitelist Introduced as Enforcement Tool

In response to growing concerns, the National Gambling Board has introduced a new online gambling whitelist. The initiative is intended to address black market activity directly by clarifying which operators are authorised.

The practical effectiveness of this mechanism has yet to be demonstrated. However, its introduction marks a formal step by the NGB to engage more directly with online enforcement.

At the same time, South Africa remains accessible to compliant international operators. Coleman points to the recent market entry of Virgin Bet as evidence that licensed expansion is possible. He notes that operators with a history of legal and compliant conduct in international markets face fewer obstacles when applying in South Africa. In contrast, companies that have previously targeted South African consumers from what he describes as pseudo licensing jurisdictions may encounter greater scrutiny in probity assessments.

Tax Policy Uncertainty Adds to Regulatory Questions

Beyond enforcement, fiscal policy remains under discussion. A proposal to increase the national tax rate on online gambling profits to 20 percent has been subject to consultation. The proposal followed an estimate by the NGB that 66 percent of adults engage in online gambling, up from 30 percent in 2017.

The consultation deadline was extended to 27 February. Coleman confirms that consultations have concluded but says there has been no further communication regarding next steps. As a result, operators are awaiting clarity on the potential tax framework.

Our Assessment

The figures cited by SABA indicate that a majority of gambling activity in South Africa currently occurs outside the licensed system. Industry representatives place responsibility for enforcement primarily with the National Gambling Board and point to limited resources and powers, including the absence of IP blocking authority. At the same time, provincial fragmentation, visible offshore sponsorships, and pending tax changes contribute to a complex regulatory environment. For operators and users assessing the South African market, enforcement capacity, fiscal clarity, and the effectiveness of the new whitelist will be central factors in determining how the licensed sector evolves relative to the black market.