The Free Market Foundation (FMF) is demanding that a national 20% tax for online gambling proposed by the national treasury be withdrawn and reconsidered within South Africa’s existing decentralised regulatory regime.
It said the proposed tax will undermine provincial authority and overburden legal gambling operators, and risks driving consumers further towards unregulated offshore platforms, which already feature strongly the online gambling market.
“The assumption that it would be possible to enforce a tax on offshore platforms despite the absence of any mechanism or enforcement infrastructure is fundamentally flawed,” Ayanda Zulu, FMF policy officer and author of the submission said on Friday.
He said South Africa’s gambling regulatory regime is decentralised, with provincial gambling boards (PGBs) holding primary authority over licensing, compliance and taxation. The National Gambling Board (NGB) plays a limited role in oversight, norms-setting and compliance support.
“This centralisation of fiscal authority undermines the autonomy of PGBs and raises serious constitutional questions regarding the erosion of jurisdictional boundaries.”
The FMF disagrees with treasury’s assertion that online bookmakers are “undertaxed” and that tax competition is problematic. It argues that bookmakers already face a substantial cumulative tax burden, which includes provincial gambling taxes, value-added tax and corporate taxes. Introducing an additional national levy will push their effective tax rates to disproportionately high levels.
R1.5-trillion
National treasury is considering the 20% tax on the online and interactive gambling industry to curb the scourge in problem betting, arguing that the revenue can contribute to public sector funds to mitigate the social costs.
The South African Responsible Gambling Foundation released a study last year that found that nearly 45% of government grant recipients were gambling money intended for education and to survive.
This week, Rise Mzansi received a response from trade, industry & competition department (DTIC) director-general Simphiwe Hamilton after demanding that the government adopt several reforms to deal with the scourge.
Read: SA eyes new ‘sin tax’ as online gambling explodes – but will it backfire?
It said in a memorandum of demands that last year alone, South Africans wagered over R1.5-trillion, or R400-billion more than 2024. Gambling operators made over R74.5-billion in gross gambling revenue – 60% of which was generated through online betting.
The party said gambling operators only paid R 5.8-billion in taxes and levies and contributed 0.1% of their gross gambling revenue to the gambling foundation.
Its demands include banning gambling advertising during certain hours, action against illegal operators, taxes, and amending legislation.
Hamilton said in his reply that the department is also concerned about gambling challenges and has instituted processes to address these issues. They include the National Gambling Policy Council considering and formulating interventions on some of the issues raised by Rise Mzansi.
The National Gambling Amendment Bill 2018 remains in a mediation process in parliament. The department has been advised that all the processes regarding the proposed law have been exhausted legally and that the trade minister Parks Tau is not empowered and is not in a position to withdraw the bill as the executive.
“The bill therefore awaits parliamentary processes. However, the DTIC would like to confirm that the new comprehensive bill is being developed and processes are underway with consultations having commenced with provinces,” he said.
The department noted the recommendations on the advertising ban and said it would consider compliant mechanisms. Norms and standards for gambling advertising and gambling advertising regulations are expected to be published before July 2026.
“It is emphasised that gambling is a functional area of concurrent jurisdiction with provinces and the licensing of gambling takes place in provinces. It should be noted that the issue of illegal operators also require provinces as they are licensing authorities,” Hamilton said.
Read: No, online gambling has ‘not been banned in South Africa
“This issue will be consulted with the National Gambling Board and provinces for further action. The NGB is undertaking work with provincial licensing authorities to address illegal gambling and the work is ongoing.” – © 2026 NewsCentral Media
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