The South African Bookmakers’ Association (SABA) has warned that illegal online gambling continues to go unchecked – accounting for approximately 62% of all online gambling activity in the country – and posing a major threat to consumers, legitimate operators, and the broader economy.
“While much of the recent public and media debate has focused on the growth of legal online betting, the existential crisis lies in the scale and impact of illegal offshore operators that continue to target South African consumers unchecked,” says Sean Coleman, CEO of SABA. “These illegal operators pay no local taxes, contribute nothing to responsible gambling programmes, have no enforceable self-exclusion mechanisms, and pose serious risks to vulnerable players.
“Every rand spent on these offshore sites is money that leaves the South African economy undermining jobs, tax revenues, and community investment supported by the legal betting industry,” he adds.
According to the Yield Sec South Africa 2023/24 Report, commissioned by SABA, the country’s online gambling market is dominated by illegal offshore operators. The data shows that illegal platforms account for approximately 62% of total online gambling activity, compared to just 38% held by licensed, regulated South African operators. The Report found that 2 084 unlicensed gambling websites actively target South Africans, with around 16-million people – or 27% of the population – estimated to have engaged with illegal platforms in the past year.
“The financial impact is staggering,” says Coleman. “Illegal operators are estimated to be diverting over R50-billion in gross gambling revenue (GGR) offshore annually, depriving South Africa of significant tax income and social contributions that would otherwise support local communities, responsible gambling initiatives, and public programmes.”
In contrast, Coleman says, legal online operators contribute to the fiscus through taxation and compliance fees – including unrecoverable VAT at 15%, corporate tax, and a 6,5% tax on gross gaming revenue while also investing in responsible gambling, player protection mechanisms, and contributing to socio-economic development initiatives.
Gambling is a concurrent competence, so licence-holders are regulated at a provincial level, operating under bookmaker licences issued and monitored by the provincial gambling boards in accordance with both the Provincial and National Gambling Acts.
Most illegal operators, Coleman explains, are hosted in offshore jurisdictions such as Curacao, Malta, Gibraltar, and the Phillipines where “pseudo-licenses” are issued with minimal oversight. These entities use aggressive digital marketing, affiliate, and influencer networks to reach South African consumers, but offer no local recourse, accountability, or consumer protection in the event of fraud, non-payment, or harm.
Local payment systems – including bank transfers, EFT gateways, and credit card processing through third-party payment providers – are frequently exploited by illegal operators to facilitate transactions despite the clear prohibitions set out in Sections 8 and 11 of the National Gambling Act (2004) which make it unlawful to offer or participate in unlicensed gambling activities.
Coleman warns that South African consumers who use illegal online gambling sites face significant risks. Because these operators are unlicensed, winnings are not legally enforceable and can be forfeited to the state under Section 16 of the National Gambling Act. Players have no protection if a site refuses payment or manipulates results – and many illegal platforms are linked to fraud, identity theft, and data breaches. In addition to personal financial loss, participation in unlawful gambling is itself an offence and transactions may be blocked or investigated by banks.
Coleman outlines several urgent interventions needed to curb illegal online gambling in South Africa including:
- DNS blocking, IP blocking, and geo-fencing to restrict access by users;
- Payment blocking and merchant code filtering to disrupt illegal transactions;
- Cease-and-desist actions and prosecution of illegal operators through coordination with provincial gambling boards;
- Stronger inter-agency enforcement following the examples of countries such as the UK, Australia, and Finland which have successfully implemented payment and domain blocking regimes;
- Restrictions on affiliates and influencers driving traffic to unlicensed illegal markets;
- Public education campaigns to help consumers distinguish between legal and illegal sites.
From its side, he says, SABA has already implemented the following interventions:
- Concluded an MOU with SABRIC and currently working with the banking sector;
- Formation of a banking sector task force to focus on meaningful banking interventions; and
- Concluded an MOU with a Provincial Gambling Board and is working on cease-and-desist warnings, evidence gathering, and possible legal action against illegal operators.
“This is a solvable problem,” says Coleman. “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.”