South Africa Gambling Regulation

South Africa, officially known as the Republic of South Africa (RSA), is located in the southernmost part of Africa. It is a beautiful country with stunning natural scenery, diverse cuisine, and numerous places to visit.

The country’s gambling sector, however, definitely needs further work to improve regulation of the industry. Gambling has a long history in South Africa, and because of strong interest in casino games and sports betting, the gaming scene has changed significantly in recent years.

The most popular form of gambling in South Africa is the lottery, which is understandable considering almost every other type of gambling was forbidden in the country until 1996. Nowadays, South Africa has legalized casinos, poker, bingo, sports betting on fixed odds and betting exchanges, horse racing, and lotteries. Both land-based and online gambling are regulated in the country.

The gambling industry in South Africa is steadily growing, with Gross Gambling Revenue (GGR) in fiscal 2018/2019 reaching R30 billion. The sector is regulated by the nine Provincial Gambling Boards and the National Gambling Board.

One of the main reasons why the government decided to regulate various forms of gambling is the huge number of illegal casinos that took over the country in 1995. While most of them were small rooms with just a few slot machines, there were about 2,000 illegal casino facilities in South Africa by the end of 1995.

Even though gamblers found illegal casinos very convenient, the government quickly realized that the unregulated gambling sector caused huge losses and plenty of missed revenue. This is why South Africa started taking steps toward legalizing casinos and allowing operators to provide casino games after obtaining a license.

Gambling Regulation in South Africa

The gambling scene in South Africa began to change in 1996 when the National Gambling Act was passed. Under that law, gambling activities became “effectively regulated, controlled, policed and licensed”. Before the act was implemented, all forms of gambling were deemed illegal in South Africa. The only exception was horse racing because its outcome was believed to depend on both luck and skill.

Independent Territories Before 1996

National Gambling Act 2004 and Amendment Act 2008

Remote Bill 2014

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Independent Territories Before 1996

Several years before the government introduced the National Gambling Act of 1996, there were several independent homelands in South Africa collectively called TBVC. These included Transkei, Bophuthatswana, Venda, and Ciskei.

While the Gambling Act of 1965 banned almost all forms of gambling, all four of those territories legalized gambling and began issuing licenses to casino operators in the late 1970s. In 1994, after the country democratized, these independent territories once again became part of South Africa. At that time, gambling was still illegal nationwide, but the TBVC territories were allowed to continue offering gambling activities. In 1996, the Gambling Act was passed, legalizing casinos, sports betting, and lottery games.

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National Gambling Act 2004 and Amendment Act 2008

Although the Gambling Act of 1996 was pivotal for the gambling industry in South Africa, further amendments were still necessary. In 2004, the National Gambling Act of 1996 was replaced by a new Gambling Act. The new law officially made online gambling illegal. Sports betting, however, was not included in the ban.

To introduce several changes to the Gambling Act of 2004, the National Gambling Amendment Act was introduced in 2008. This was followed by an official announcement from the Gauteng High Court in 2010. After these legal changes, offshore operators were completely banned from offering any gambling services to residents of South Africa. Despite the ban, many foreign operators continued welcoming players from South Africa and even allowed them to handle their payments in SAR.

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Remote Bill 2014

As the government recognized how difficult it would be to stop foreign operators from offering online gambling to South African residents, a draft of the Remote Bill of 2014 was introduced. If passed, it could drastically change the online gambling industry in South Africa.

Unfortunately, the bill still has not been passed, meaning online gambling remains illegal in the country. The only exception is online sports betting, which is legal within South Africa. Although there have been ongoing discussions about amendments that would regulate online gambling, the National Gambling Board remains firm in its stance on interactive gambling.

Online Gambling

Even though the gambling scene in South Africa has changed drastically in the last several years, those who wish to enjoy their favorite casino games online are still restricted by law. Despite previous attempts to amend the Gambling Act, online gaming websites are still considered illegal in South Africa.

While there are no licensed operators who can provide online gambling activities to South Africans, offshore operators are also banned from offering online casino services to players who reside in South Africa. Opinions differ on whether online gambling should be legalized: some believe that it may lead to higher rates of gambling addiction among the population, while others think the industry can significantly boost the country’s revenue.

Sports betting, however, is excluded from the ban, and South Africans can legally place bets on different sporting events and horse races online. Of course, sportsbook operators may offer sports betting to South Africans only after obtaining a license.

Those who participate in online gambling activities deemed illegal in South Africa can face up to 10 years in prison, a fine of R10 million, or both. That said, there have been several loopholes in the legislative system that many have taken advantage of.

Gambling Regulators

The National Gambling Board (NGB) was established in 1996 after the National Gambling Act was passed. Currently, the NGB oversees gambling activities in all nine provinces of South Africa.

In addition to the NGB, each of the nine provinces has its own Gambling Board that regulates gambling within its jurisdiction. As mentioned earlier, online sports betting is legal in South Africa, but it is permitted only for operators that have obtained a license from the authorities in the country. All nine provinces are authorized to issue sports betting licenses.

Companies that want to operate as manufacturers, maintenance providers, or other suppliers in the South African gambling industry can apply for a national license. Operators that intend to offer gambling activities solely within a specific province can obtain a provincial license.

Licensing Process

Provincial Licensing Authorities

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Licensing Process

Applicants can apply for both types of licenses through any of the nine Provincial Gambling Boards. The required forms are available on the official website of each Gambling Board. After downloading the application, the applicant must follow the outlined steps. The entire licensing process can take anywhere from three months to a year.

Currently, the NGB has imposed a cap on the total number of gambling licenses that may be issued in South Africa. As of now, up to 40 licenses can be issued across the nine provinces. Not every Provincial Gambling Board can grant the same number of licenses, as the NGB determines the allocation for each province.

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Provincial Licensing Authorities

The largest provincial licensing body in South Africa at the moment is the Western Cape Gambling and Racing Board (WCGRB), which is authorized to issue the highest number of gambling licenses. Other provincial licensing authorities include the Gambling Boards of Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, and North West.

Each Gambling Board has several responsibilities to ensure that gambling activities in its region are properly regulated. These regulatory bodies can issue new licenses to gambling operators or renew existing ones. They must also ensure that license holders comply with the regulations imposed by the NGB and their respective Provincial Gambling Board. Additionally, the boards are tasked with collecting any revenue generated from gambling taxes.

Obtaining a Gambling License by South African Authorities

To obtain a gambling license from any of the nine Provincial Gambling Boards, operators have to meet several criteria. Each province may have specific conditions that operators must fulfill in order to obtain a gambling license. Every Gambling Board in South Africa provides rules and conditions that must be met by license applicants.

To offer sports bets online or offline, operators must obtain a route operator license, site license, supplier license, or any of the other types of licenses typically issued to sportsbook operators.

Before a license is granted to an operator, it must be proven that the same operator is eligible to apply for a gambling license in South Africa. If a license applicant provides false information, fails to present accurate information, breaches the conditions laid down by the Gambling Board, or does not follow the proper licensing process in any way, the operator’s permit, license, approval, authorization, or registration can be revoked.

The WCGRB CEO publishes information about the potential license holders in the Provincial Gazette before their licenses are approved. If no objections are raised within the following 21 days, the operator becomes eligible to obtain a gambling license from the authority.

An applicant may request a withdrawal of a license only before its final approval by the WCGRB. After a license is granted, the operator is required to pay the taxes imposed by the respective Gambling Board.

If an operator is found to be breaching the rules and conditions of operating under a license from one of the Provincial Gambling Boards, the specific board has the right to terminate the operator’s existing license.

Cost of Gambling Licenses in South Africa

It should be noted that the prices of gambling licenses issued by South African authorities may differ according to the Provincial Gambling Board that issues the licenses. For example, casino operators who are applying for a WCGRB gambling license for the first time will have to pay a fee of R504,703. Meanwhile, the annual fee for the casino license will be R252,351. A new sportsbook license from the WCGRB will cost operators R12,612, with an annual fee of R2,530.

The casino fee for new applicants who wish to obtain a license from the North West Gambling Board is R230,000. The annual fee for the casino license is R20,000, and the renewal of the license will cost the same amount. The same Provincial Gaming Board will require an application fee of R6,000 from bookmakers, with an annual or renewal fee of R5,000.

Whenever operators apply for any type of gambling license, they should check the fees with the respective Gambling Board responsible for issuing licenses in the areas where they wish to offer their services.

Gambling Taxes in South Africa

Currently, recreational players who enjoy legal gambling activities in South Africa are not required to pay any taxes. The winnings that South Africans generate through online sports betting also do not incur any taxes. There is, however, a 6% levy on horse racing in South Africa. This may be one of the reasons why sports betting has become increasingly popular among bettors in the country, while horse racing’s popularity has declined in recent years. Any gambling taxes are collected by the nine Provincial Gambling Boards in South Africa.

In 2011, the government proposed a national gambling tax that was supposed to take effect on 1 April 2012. According to that proposal, any winnings from a form of gambling, including the National Lottery, that exceed R25,000 would be subject to a 15% levy.

In the 2013 Budget Speech, a new national tax of 1% on Gross Gambling Revenue (GGR) of casinos was introduced. Despite the proposal, the 2013 Budget Speech did not provide a specific date for implementation, and the new gambling tax is still not in effect.