As proposed new legislation which could have a devastating affect on legitimate gambling looms large, the South African Bookmakers Association (SABA) says that illegal offshore gambling continues to dominate the country’s online betting landscape – exposing millions of consumers to financial loss, fraud, and legal consequences.
In November 2024, SABA commissioned a data-driven report from YieldSec, a global market research firm specialising in online gaming. The report indicated that illegal operators accounted for approximately 62% of all online gambling activity in South Africa, diverting more than R50-billion in gross gambling revenue offshore annually. An estimated 16-million South Africans have engaged with these illegal platforms in the past year.
“While the positive impact of re-channelisation away from the illegal market is acknowledged and supported by SABA, not enough is being done to address this area of the illicit economy,” says Sean Coleman, CEO of SABA.
Illegal gambling occurs when South African players place bets on foreign-based online platforms that are not licensed locally. In terms of the National Gambling Act (2004), it is unlawful to offer or participate in gambling services in South Africa without a valid local licence.
Despite this, offshore operators continue to target South African consumers – often operating under “pseudo licences” issued in jurisdictions such as Curaçao, Malta, Gibraltar, and the Philippines. These licences do not authorise operators to operate in South Africa and offer no consumer protection.
“These numbers are deeply concerning,” says Coleman. “The majority of online gambling activity in South Africa is still taking place outside the regulated system. That means millions of consumers are exposed to operators who pay no local taxes, provide no consumer protection, and operate entirely outside of South African law.
“Each time a player located in South Africa places a bet on a foreign based online gambling site an unlawful gambling activity occurs, with such illegal gambling activity being facilitated by, amongst others, the bank of the player in South Africa,” Coleman says. “As such, South African banks, third-party payment providers, and credit card institutions serve as a conduit between the SA online gambler’s banking account and the foreign based gambling website operator’s banking account – without which the unlawful gambling transaction would not be able to occur.”
In terms of Sections 8(a) read with Section 11 of the National Gambling Act 7 of 2004 (the National Act) it is unlawful to engage in or make available a gambling activity, unless that activity is licensed in South Africa.
Consumers who use illegal platforms also face serious consequences.
Winnings from unlawful gambling activities are not legally protected and may be confiscated. Under South African law, such winnings can be forfeited to the State and individuals may face prosecution for participating in illegal gambling activities. SABA is working with the banking sector in this regard to enforce this provision of the law.
“Many consumers are unaware that using these sites is not only risky, but unlawful,” Coleman adds. “There is no guarantee that winnings will be paid out and players have no recourse if they are defrauded or exploited. There is also the unregulated risk of gambling harm.”
SABA urges South Africans to ensure they are using licensed and regulated operators.
Legal operators are required to display their legal licence details including their registered entity name and the relevant provincial gambling board. By contrast, illegal operators often display foreign licences, or record their licensing jurisdiction, which have no standing in South Africa.
Licensed operators are subject to strict regulatory oversight including age verification, anti-money laundering controls, and robust responsible gambling measures – safeguards that are largely absent in the illegal market.
“Choosing a licensed operator is about protecting yourself,” says Coleman. “Consumers should take a moment to check who they are betting with. If the operator is not licensed in South Africa, they are operating illegally – and by betting with such an operator, the South African consumer is committing an offense in terms of the National Gambling Act.”