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South Africa Faces Mounting Gambling Crisis as Vulnerable Populations Targeted

A surge in online betting and a desperate economic climate are fueling a gambling crisis in South Africa, with a meaningful portion of the country’s most vulnerable citizens falling prey to the promise of quick riches. Recent data reveals a troubling trend: nearly 27% of social grant recipients are actively involved in gambling, highlighting the desperation driving this behaviour.

Risky Behavior

The rise in gambling is inextricably linked to South Africa’s challenging economic realities. With an unemployment rate of 33% – even higher among young people – and insufficient economic growth to create adequate job opportunities, many are turning to gambling as a perceived escape. “When one is in a hopeless situation,it is tempting to clutch at straws,” one analyst noted,highlighting the desperation driving this behavior.

Betting companies, according to reports, show little concern for the exploitation of thes feelings. The proliferation of smartphone technology has further worsened the problem, making betting more accessible than ever before.

Gambling Revenue Soars, Masking Deeper Issues

The scale of the problem is staggering. In the 2024/25 financial year, the gambling industry generated R75 billion in revenue – and this figure doesn’t tell the whole story. Including “rollover bets,” where winnings are reinvested rather than cashed out,the industry’s total turnover reached a massive R1.5 trillion. The continued appeal of gambling is also evident in the R1.96 billion spent on lottery tickets last year, a clear indication of widespread false hope.

Illegal Online Betting Complicates Regulation

A significant portion of the gambling activity is occurring through illegal online betting platforms operated by offshore companies. While difficult to regulate, this represents a major concern, leading to lost revenue and jobs for South Africa.The national Gambling Board recently reported to parliament that 60% – approximately R47 billion – of the industry’s gross gambling revenue now originates from online betting.

Calls for Stricter Regulation and Advertising Controls

Authorities are now grappling with how to address the crisis. Calls are growing for the blocking of illegal gambling sites and tighter restrictions on aggressive advertising practices. While an outright ban on betting advertisements may be too drastic, there is a strong push to prohibit the promotion of “instant riches.” A proposal has been made to require gambling ads to carry warning labels, similar to those found on cigarette packaging.

The advertising Regulatory Board is under pressure to urgently implement a code of good conduct for gambling advertising. Other nations have already recognized the need for regulation and have implemented legislation to mitigate the harms associated with online gambling.

Potential for Increased Tax Revenue

Beyond limiting harm, stricter regulation could also significantly boost tax revenue.The fiscus collected R5.8 billion in taxes and levies from the gambling industry last year, a figure that could be substantially increased with improved controls.

Outdated Legislation Needs Modernization

The current National Gambling Act of 2004 is widely considered outdated and inadequate to address the challenges posed by technological advancements in gambling. Previous attempts to modernize the legislation have been hampered by parliamentary obstacles, particularly concerning the regulatory powers of provincial governments.

Upcoming Summit and Proposed Legislation Offer Hope

A Responsible Gambling Summit, scheduled to take place in South Africa in November, will bring together regulators, policymakers, industry leaders, and global experts to develop a roadmap for the future. Simultaneously, parliament’s portfolio committee on trade, industry & competition is considering the Democratic Alliance’s (DA) Remote Gambling Bill as a starting point for crafting a extensive regulatory framework. The bill aims to regulate and license online and remote gambling, regulate advertising, and ensure responsible gambling practices.

Concerns Over government Control of the National Lottery

Despite the ongoing crisis, the government’s plan to take over the national lottery in 2034 has drawn criticism. Experts warn that the moral hazard of state-run gambling would undermine efforts to address poverty and could exacerbate the existing problems. “Given the havoc caused to many lives through gambling, it would be disastrous for the government to take over the national lottery,” a senior official stated.