South Africa’s big illegal gambling problem

The boom of online gambling in South Africa has also led to a rise in illegal gambling, with current measures and legislation insufficient to tackle the scale of the problem.

The extent of this issue was revealed by South Africa’s National Gambling Board (NGB) in a recent presentation to the Portfolio Committee on Trade, Industry and Competition.

In this presentation, the board revealed that it has reported nearly 30 cases of online gambling to the South African Police Service (SAPS) in the 2024/25 financial year.

However, it said one major problem is that, even if someone is found guilty, the only consequence is a small fine, with the highest being R1,500.

The board explained that online gambling has played a large role in increasing instances of illegal gambling.

Over the past few years, online betting has boomed in South Africa and is now the biggest contributor to the country’s gross gambling revenue.

In the 2024/25 financial year, South Africa’s gross gambling revenue amounted to R75 billion, up from R59.3 billion in the prior year.

Betting, which includes online betting, generated around 70% this total, at R52.3 billion, while casinos contributed R16.6 billion, or 22% of the total.

The NGB explained that the boom in online gambling was exacerbated by the Covid-19 pandemic in the 2020/21 financial year, when betting became the dominant gambling mode in South Africa, overtaking casinos.

In addition, it said online access to gambling through mobile phones and computers has led to an increase in illegal online gambling.

“This technological shift poses challenges for regulation and enforcement, contributing to issues like compulsive and addictive gambling,” the board said.

“There is no firm policy position that has been adopted at a national level on interactive gambling.”

The board added that current legislation related to gambling, particularly the National Gambling Act of 2004, is no longer adequate or responsive to the changes in gambling caused by technological advances.

The NGB said increased illegal gambling requires increased enforcement, and the board is currently working with various stakeholders to address the problem.

This includes the provincial gambling licensing authorities, SAPS, the Financial Intelligence Centre, banks, and other network providers.

These stakeholders will assist the NGB in detecting and prosecuting illegal gambling in South Africa, with a particular focus on illegal online gambling.

Illegal online gambling crackdown in South Africa

Commercial law firm Truter Jones told Daily Investor earlier this year that, in South Africa, the only forms of legal online gambling are placing totalisator and fixed-odds bets online with a licence issued by a provincial gambling regulator. 

Recently, betting operators have started offering casino-style and gamified betting products on their websites. 

“These games essentially entail placing a bet on the outcome of a contingency – be it a roulette wheel, other casino game, slot spin, or an illustrated plane going up or coming down – determined by a random number generator,” the firm explained. 

“Because these products do not fall within the definition of a gambling game in the National Gambling Act, 7 of 2004, they are legal and are not caught by the prohibition against the making of interactive games available in section 11 of the National Gambling Act.”

In contrast, an activity like accepting bets from punters in South Africa by third parties that are not licensed in the country would constitute illegal gambling.

For example, “self-styled” online casinos operated by entities outside the country that allow South Africans to play on their websites would be illegal.

The NGB revealed in its presentation that there has been a surge in online casinos offered from off-shore operators.

It said Curacao has been the source of most of these illegal online operators, and that the island country’s regulator has not been responsive ro requests to stop these licensees from operating illegally in South Africa.

Another example of illegal online gambling is games that do not involve placing bets or wagers but are essentially “pay to play”, with the result determined by the player’s skill, the element of chance, or both.

“The latter would include, for example, a game where the punter pays R5 to spin a wheel and, depending on where the wheel lands, that person will receive a payout of R150,000 that is not determined with reference to the odds of that outcome being achieved,” the firm explained.

Truter Jones director Amy Jones explained that the biggest challenge with identifying and prosecuting cases of illegal gambling is that the authorities lack the resources to identify, monitor and prosecute.

This is especially the case for illegal online gambling where, in most instances, the illegal operator is not situated in South Africa and the identity of that operator is obscured. 

“The prosecution of illegal online gambling requires a dedicated unit with specialist skills and training to enable them to differentiate between legal and illegal online gambling and then take the appropriate steps to identify and prosecute the guilty party,” she said.

To address the growing problem of illegal online gambling, the NGB said it has approach the Department of Communications to block IP addresses.

In addition, the board has worked with Google and ICASA to block gambling websites from unlicensed operators.

However, it said there is a need to develop a legal framework for online gambling, with the current legislation insufficient.