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 amazing nature, cuisine, and numerous places to visit.
The gambling sector of the country, however, definitely needs some work that will provide better regulation of the industry. Gambling has a long history in South Africa and due to the huge interest in casino games and sports betting, the gaming scene in the country started to change significantly in the last few 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 is regulated in the country.
The gambling industry in South Africa is steadily growing, with the Gross Gambling Revenue (GGR) in fiscal 2018/2019 reaching a total of R30 billion. The gambling sector is regulated by the nine Provincial Gambling Boards and the National Gambling Board.
One of the main reasons why the Government has decided to start regulating 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, the illegal casino facilities in South Africa were about 2,000 by the end of 1995.
Even though gamblers found illegal casinos very convenient, the Government quickly realized that the unregulated gambling sector only causes huge losses and plenty of missed revenue. This is why South Africa started taking steps towards legalizing casinos and allowing operators to provide casino games after obtaining a license.
Gambling Regulation in South Africa
The gambling scene in South Africa started changing in 1996 when the National Gambling Act was passed. Under that law, gambling activities became “effectively regulated, controlled, policed and licensed”. Prior to implementing this act, South Africa had all forms of gambling deemed illegal. The only exception was horse racing as it was considered a game with an outcome that depends on both luck and skills.
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 will still be restricted by the 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 were also banned from offering online casino services to players who reside in South Africa. There are different opinions on whether online gambling should be legalized as some believe that it may lead to bigger gambling addiction rates among the population of the country, while others think the industry can significantly boost the country’s revenue gain.
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 are allowed to offer sports betting to South Africans only after they have obtained a license.
Those who participate in online gambling activities, deemed illegal in South Africa, can face 10 years in prison or a fine of R10 million, or both. This being said, there have been several loopholes in the legislative system that many have taken advantage of.
The National Gambling Board (NGB) was established in 1996 after the National Gambling Act was passed. Currently, the NGB is the regulatory body that is overseeing the gambling activities in all nine provinces in South Africa.
In addition to the NGB, all nine provinces in the country also have their respective Gambling Boards that also regulate the gambling activities in their areas. As mentioned earlier, online sports betting is legal in South Africa but it is allowed only for operators that have obtained a license from the authorities in the country. All nine provinces are authorized to issue licenses to sports betting operators in South Africa.
Companies that wish to operate as manufacturers, maintenance suppliers, suppliers, or are interested in joining the gambling industry in South Africa, can apply for a national license. Meanwhile, operators who wish to offer gambling activities only within the area of a certain province can obtain a provincial license.
Obtaining a Gambling License by South African Authorities
In order to be able to obtain a gambling license by any of the nine Provincial Gambling Boards, operators have to meet several criteria. Each province may have specific conditions that operators should fulfill in order to obtain a gambling license. Every Gambling Board in South Africa has provided the rules and conditions that must be met by license applicants.
To be able to offer sports bets online or offline, operators must obtain either route operator license, site license, supplier license, or any of the other types of licenses that are typically issued to sportsbook operators.
Before a license is granted to a specific operator, it should be proven that the same operator is eligible to apply for a gambling license in South Africa. If a license applicant provides false information or 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 licensee holders in the Provincial Gazette before their license is approved. If the license is not disapproved by anyone in the following 21 days, the operator is eligible to obtain a gambling license by 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 that are implemented by the respective Gambling Board.
If an operator is found to be breaching the rules and conditions of operating under a license by one of the Provincial Gambling Boards, the specific board has the right to terminate the existing license of the operator.
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 Province 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. The new sportsbook license by WCGRB will cost operators a fee of R12,612 and an annual fee of R2,530.
The casino fee for new applicants who wish to obtain a license by the New 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/renewal fee of R5,000.
Whenever operators are applying for any type of gambling license, they can check the fees with the respective Gambling Board that is in charge of issuing licenses in the areas they wish to offer their services.
Gambling Taxes in South Africa
Currently, recreational players who enjoy legal gambling activities in South Africa will not be required to pay any taxes. The winnings that South African generate thanks to 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 died down 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 be in full effect from 1 April 2012. According to that proposal, any winnings from a form of gambling, including the National Lottery, that exceed R25,000 will be subjected 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 for the new national tax, however, the 2013 Budget Speech does not provide a specific date for the implementation of the new gambling taxation, which is still not in effect.