Wiping out illegal online betting is a battle government seems to be losing, with industry stepping up to form alliances with other sector bodies in a bid to cut it out and limit the amount of money flowing offshore.
According to the SA Bookmakers’ Association (SABA), there are thousands of illegal websites tempting South Africans to wager money, yet government has only identified about a fifth of these.
Responding to a question in Parliament in March, trade and industry minister Parks Tau said 285 cases of illegal gambling were identified between 2018 and 2023, with responsibility for prosecution now lying with provincial boards and law enforcement.
However, research by Yield Sec South Africa identified 2 084 illegal operators actively targeting the country in 2024/25, with 1 134 affiliates promoting illegal activities. Some 27% of South Africans – 16.3 million people – interacted with illegal gambling during that period, says SABA CEO Sean Coleman.
As a result, billions in gross gambling revenue – the difference between the amount of money players wager minus the amount they win – is leaving SA’s shores each year.
“The financial impact is staggering. Illegal operators are estimated to be diverting over R50 billion offshore annually, depriving SA of significant tax income and social contributions,” says Coleman.
Every rand spent on offshore sites undermines jobs, tax revenues and community investment. Moreover, people who win on illegal gambling sites could lose all their money because they can't force these operators to pay out, explains Coleman.
Regulatory confusion
The National Gambling Board (NGB) and industry have diverging views of what is legal, based on differing interpretations of the 2004 National Gambling Act.
The NGB argues that no online gambling is allowed, while sports betting is. Several lawyers have told ITWeb this is incorrect: online gambling is allowed if the operator is licensed by one of the provinces.
The NGB says on its website that, as the regulatory authority responsible for safeguarding the integrity of the country's gambling sector, it is working with provincial authorities “to combat the rise of unlawful online gambling activities in SA”.
It says this “follows a growing concern over the proliferation of unlicensed gambling websites and platforms targeting SA consumers, often without regard for local gambling laws or consumer protection”.
Credibility issue
Coleman’s comments follow a round table and a flurry of media interest in a recent court case that clouded the definition of online gambling. The debate coincides with Responsible Gambling Month.
Garron Whitesman, founder of Whitesmans Attorneys, agrees with Robin Bennett, head of regulatory compliance at the Western Cape Gambling and Racing Board, who says in a LinkedIn post that protecting the industry must include “protecting the credibility of regulators, whose oversight ensures fairness and public trust”.
Whitesman says the NGB is there to coordinate matters where there are national norms and standards, such as the prohibition of illegal interactive gambling, yet it hasn't functioned properly for about a decade. “There was a time when it was much more involved in the process and debate.”
Coleman says the NGB must oversee the industry through monitoring, evaluating and engaging on proposed policy positions, and assist provincial licensing authorities in achieving regulatory compliance in a unified way. “It's an absolute will and way situation, and we're beating that drum because we're not getting enough support from our regulators.”
The NGB did not respond to a request for comment, while the Department of Trade, Industry and Competition was not able to respond at the time of writing.
Legal precedent
The illegality comes in when an operator from outside South Africa's borders offers gambling in the country, contravening the Piggs Peak decision. In 2011, Swaziland-based Casino Operations, which owned Piggs Peak, lost its bid to have its operations declared legal in SA, in a landmark judgement handed down in the Bloemfontein Supreme Court of Appeal.
Coleman says this makes two things clear in that it is illegal for international operators to enable South Africans to wager money here, and the decision enforces the fact that provincial boards are autonomous.
Based on this precedent, all that needs to happen is for a gambling body to challenge an illegal website through first issuing a cease-and-desist letter and then following the legal route, adds Coleman.
SABA will “assist with evidence-gathering and possible legal action... We'll send a very strong message to the illegal market to stay away from South Africa.”
Following the Piggs Peak decision, UK-based betting entity Betfair said it would no longer offer its services to South Africans.
Industry action
SABA is working with industry associations, such as the South African Banking Risk Information Centre, to set up a dedicated task force to investigate blocking these sites as merchants so South African cards can't be processed.
Other solutions include blocking local IP addresses from accessing illegal websites and working with the Advertising Standards Authority to take down adverts that punt illegal websites.
Whitesman says “the best way in my view to get people away from unlicensed is to ensure licensed operators are able to have offerings that are more attractive to punters”.
“This is a solvable problem. We have the data, the technology and the partnerships to act. We also have good legislation in place with legal case law precedent. What's needed now is alignment between regulators, government, the banking sector and law enforcement to protect South Africans from illegal gambling harm,” says Coleman.
* The South African Responsible Gambling Foundation offers free, confidential counselling and treatment for people affected by problem gambling and their families. Contact details for Gamblers Anonymous are here.
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