South Africa's gambling industry has seen significant changes since its legalization in 1994. In this article, we'll delve into the history of the gambling industry in SA, the various forms of gambling, key players in the market, and the revenues this industry generates.

History of Gambling in SA

The gambling business in SA had a rocky start, with stringent regulations imposed by the South Africa's Gambling Act of 1965, which effectively prohibited most forms of gambling, except for horse racing, which was recognized as a sport.

However, during the late 1970s, illicit casinos began to emerge, predominantly in the territories known as "bantustans." Bantustans were reservations for South Africa's indigenous Black population, and some of these territories achieved independence, paving the way for the establishment of gambling businesses. A notable example is the Sun City casino resort, situated in Bophuthatswana.

Yet, the majority of SA citizens were denied access to these casinos since only ethnically classified South Africans were allowed to reside in bantustans. By 1995, there were approximately 2,000 illegal casinos operating in the country.

Everything changed in 1994 when apartheid ended, and SA transitioned to democratic rule. This marked the legalization of all forms of gambling. In 1996, the National Gambling Act was passed, establishing a system for licensing casinos and conducting a national lottery. Horse racing was also recognized as a form of gambling once again.

Varieties of Gambling in SA

SA boasts a diverse gambling landscape with over 40 casinos operating across the country. The largest, GrandWest Casino & Entertainment World, is located in Cape Town and features a wide array of gambling options, including card tables, poker rooms, and numerous slot machines.

Popular forms of gambling in SA include sports betting and horse racing, both of which are also accessible online. The national lottery enjoys considerable popularity, attracting nearly 78.9% of gamblers, while only 10.6% opt for casino gaming.

Leading Casino Brands in SA

Several major players dominate the gambling market in SA. Some of the most renowned casino brands include:

  • Tsogo Sun, holding 14 licenses.
  • Sun International, boasting 13 licenses.
  • Peermont Global, with 8 licenses.
  • London Clubs International, granted 1 license.
  • Desert Palace Casino.
  • Leithlo Resort.

Revenue from Gambling

Revenues generated by the gambling industry in SA are estimated in billions of South African Rand. In the fiscal year 2015-2016, the gross income from legal gambling activities reached ZAR 26.3 billion, approximately equivalent to USD 1.86 billion. Casinos play a significant role, contributing to 70.5% of the total gross income.

In conclusion, the gambling industry in South Africa has a rich and evolving history. Since its legalization in 1994, it has become a diverse and thriving sector, playing a significant role in the country's economy.

Sources:

  1. "The Evolution of Gambling in South Africa: From Restriction to Liberation," SA Gambling Insights, 2021.
  2. "South Africa's Gambling Industry: A Historical Perspective," SA Business Journal, 2020.

Regulation of Gambling in South Africa

In South Africa, the gambling industry is strictly regulated by legislation. One of the key aspects of this regulation is the age restriction for players. Individuals must be at least 18 years old to engage in gambling, and minors are not allowed to visit gambling establishments.

There are several laws that form the legal framework for the gambling industry in South Africa:

  1. The National Gambling Act of 1996 - This law outlines how casino licenses are to be distributed among different provinces in the country. The total number of licenses is capped at 40, and they are distributed according to provinces as follows:
    • Western Cape Province (centered in Cape Town) - 5 licenses.
    • Northern Cape Province (Kimberley) - 3.
    • Eastern Cape Province (Bisho) - 5.
    • KwaZulu-Natal (Pietermaritzburg) - 5.
    • Free State (Bloemfontein) - 4.
    • North West Province (Mafikeng) - 5 licenses.
    • Gauteng (Johannesburg) - 6.
    • Mpumalanga (Nelspruit) - 4.
    • Limpopo or Northern Province (Polokwane) - 3 licenses.
  2. The National Gambling Act of 2004 - This law complements the previous one and introduces additional norms and rules.
  3. The National Gambling Amendment Act of 2008 - This law addresses the regulation of online gambling.

These laws also define the terminology related to gambling, what constitutes gambling, and the functioning of the National Gambling Board, the state regulator of the gambling industry in South Africa.

Regulators of the Gambling Industry in South Africa:

  • The National Gambling Board is responsible for the following:
    • Defining the rules governing the gambling industry.
    • Conducting research and collecting statistics in the field of gambling.
    • Ensuring responsible handling of gambling addiction.
  • The South African Bureau of Standards is in charge of standardizing, testing, analyzing, calibrating, and certifying gaming machines, electronic monitoring systems, and other casino equipment.
  • The Casino Association of South Africa (CASA) is another major player in South Africa's gambling industry. Founded in 2003, this association brings together casino operators and shareholders. Its key objectives include providing more information about casinos to the public and advocating for greater understanding and transparency in the gambling business. CASA represents nearly all of the country's casinos, with government representatives holding 37% of the shares in various land-based casinos, providing over 100,000 jobs.

Types of Gambling in South Africa

The National Gambling Board classifies gambling activities in South Africa into the following categories:

  • Casinos - including table games and slot machines.
  • Horse racing and sports betting offered through bookmakers and totalizators.
  • Limited Payout Machines (LPM) - machines with restricted bets and prizes.
  • Bingo - both traditional and electronic bingo terminals (EBTs).

South African casinos offer a wide variety of card games, including some with a unique South African flavor:

  • Klawerjas - a popular game in Cape Town, originating from the Netherlands, where the goal is to collect tricks.
  • Kalookie - a variation of rummy where players aim to achieve specific combinations.
  • Thuni (or Thunee) - a South African game popular among Asians, requiring players to accumulate a certain number of points.

Other popular card games in South Africa include Cribbage, Canasta, Samba, Skat, Spite and Malice, and Shithead.

Revenues from the South African Gambling Industry

For the fiscal year 2015-2016, the gross revenue from legal gambling in South Africa amounted to ZAR 26.3 billion or USD 1.86 billion.

  • Casinos generated the highest revenue, contributing 70.5% of the gross income or USD 1.3 billion.
  • Betting followed, accounting for 16.9% or USD 315 million.
  • Limited Payout Machines (LPM) contributed 9.0% or USD 167 million.
  • Bingo was responsible for 3.6% of the gross income or USD 66 million.

Revenue from the gambling industry varies by province:

  • The Gauteng province generated the highest income, contributing 40% or USD 745 million for the fiscal year 2015-2016.
  • The Western Cape province came in second, contributing 15.6% or USD 291 million.
  • The KwaZulu-Natal province took the third spot, with 18.5% or USD 344 million.

Gauteng leads in casino, betting, and bingo revenues, while the Western Cape province earns the highest revenue in the LPM sector, at 30%.

In 2015, there were 23,415 slot machines in South African land-based casinos, generating a total revenue of USD 969 million. Additionally, there were 932 gaming tables across the country in 2015, with a combined revenue of USD 237 million.

Taxation of the South African Gambling Industry

Revenue generated from the gambling industry in South Africa is subject to taxation. In 2015, the South African authorities received USD 262 million from gambling, which constituted 28% of the gross income of gambling establishments.

The tax revenue includes three types of payments:

  • Corporate tax - collected from corporations based on their income.
  • Gambling tax - collected from license holders by provincial authorities, based on their gross revenue.
  • Value-added tax (VAT) - calculated based on the value added at each stage of the production and exchange of goods and services, collected from casinos rather than players.

Source of photo: News of Gambling

Online Gambling in South Africa

Despite the prohibition of online gambling in South Africa, players can still use services offered by international casinos. Players can deposit in the local currency, making it convenient. However, starting from October 4, 2016, authorities have the right to confiscate online players' winnings. The Department of Trade and Industry published the new amendment, the National Gambling Amendment Bill, allowing the court to seize and withhold players' winnings.

As a result, playing online is possible, but there is no guarantee that you will receive your winnings since even transactions within the country are prohibited.

Prohibition of Online Casinos

Online casino games, bingo, and unlicensed lotteries were declared illegal in 2010 when the Gauteng province court banned the Swaziland-based Pigg Peak online casino. This set a precedent, and since then, all domestic online casinos have been unequivocally prohibited.

Only three types of online gambling are legal:

  • National lottery online platform.
  • Sports betting.
  • Horse racing betting.

Everything else falls into the so-called "grey market." It remains uncertain whether the government will consider the legalization of online gambling in the future.

Remote Gambling Bill and Gambling in South Africa

Remote Gambling Bill

The Remote Gambling Bill was under discussion for some time, aiming to potentially legalize online gambling in South Africa. The bill considered the following aspects:

  • Licensing issues.
  • Rewards and prizes sizes.
  • Responsibilities of provinces and the National Board.
  • Standards for online casino equipment.
  • Player rights protection.

The bill included certain limits:

  • Prohibition for minors to participate in gambling.
  • Restriction on player credit.
  • Limitations on online casino advertising and promotions.

In May 2016, the Remote Gambling Bill was rejected.

Representatives of the Department of Trade and Industry, responsible for entertainment industry matters, believed that the bill did not pay enough attention to the social issues associated with online gambling.

When the bill was discussed on May 27, 2016, Shaik Emam, a member of the National Freedom Party, argued against its acceptance, stating, "People's lives are being destroyed because they allow white-collar criminals to make losses on their behalf."

Such sentiments were prevalent in the government. There is a strong lobby from land-based casinos, as they dislike the fact that websites are taking away an increasing number of participants. Opponents of the bill have been closely observing the online business in Europe, where websites have claimed nearly 20% of offline casino visitors.

Supporters of online business legalization also point out that the government is losing millions of Rand by not legalizing online casinos. The Casino Association of South Africa (CASA) provides the following figures: "The country is losing around ZAR 110 million (USD 7.8 million) to illegal online casinos. At the same time, the aggressive policies of online casinos are causing a decline in revenues for land-based establishments. Profit growth has slowed to 0.6%."

As of now, the issue of online business remains unresolved.

Best Online Casinos for South Africa

Below is a list of online casinos with interfaces that offer convenience for South African residents:

  • Springbok Casino
  • Yebo
  • Casino Las Vegas
  • Slots Magic
  • Thunderbolt
  • White Lotus Casino

Online Slot Machines in South African Casinos

South African casinos offer popular five-reel video slots commonly found in online establishments, including:

  • Gladiator
  • Gold Rally
  • Safari Heat
  • Everybody's Jackpot
  • Hulk Jackpot
  • Silver Bullet
  • Halloween Fortune

Demographics of the South African Gambling Industry

According to the National Gambling Board in 2016, 15.3% of the entire population engage in gambling activities regularly.

Over a five-year period, there was a slight decrease in the number of players in casinos, bingo, betting, and the LPM sector. However, ticket purchases for the state lottery increased.

For instance, in April 2015, the statistics were as follows:

  • 78.9% of players bought state lottery tickets.
  • 11.2% played scratch cards.
  • 10.6% visited casinos.
  • 7.1% participated in private lotteries.
  • 6.2% engaged in horse racing and sports betting.
  • 0.4% played bingo.
  • 0.3% used LPM.
  • 17.5% were involved in illegal gambling.

Illegal gambling includes unlicensed establishments and online casinos. It's worth noting that in recent years, the number of participants in illegal gambling has decreased. In November 2012, 41% of players engaged in illegal gambling, while in 2015-2016, only 17.5% did so.

Only 9.9% of all players are recognized as having a gambling addiction. There is a growing number of black players, reaching 19.8% in 2015-2016. The number of players aged 25 and over is also increasing.

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