Explore the historical evolution of gambling in South Africa, from the restrictions of the apartheid era to the rise of online sports betting, and examine the implications for society and the economy.
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Under South Africa’s apartheid regime, there were two things that the ultra-conservative, Calvinist government frowned upon but reluctantly backed down on when external pressures became too overwhelming.
The first was television. During the 1960s and early 1970s, the National Party and Dutch Reformed Church were opposed to the introduction of TV, viewing it as a profound moral, cultural and spiritual threat – it was seen as a weapon of "cultural imperialism" that could bring foreign, liberal values into the home. Only in 1976, four decades after public television was introduced in the UK, did the SABC launch its own TV service, after almost a year of test broadcasts. South Africa was one of the last countries in the world to have TV.
The second was gambling. The Gambling Act of 1965 made most forms of gambling illegal in South Africa, with horse-race betting a notable exception. Because it was the only form of gambling that was not banned, it was to the races on Wednesdays and Saturdays that people flocked to “have a flutter”.
Somewhat hypocritically, from 1976 onwards the Nationalist government permitted legalised gambling in the “independent” territories of Bophuthatswana, Transkei, Venda, and Ciskei, allowing the establishment of casinos. These proved highly lucrative for developers such as the Southern Sun hotel group and provided an outlet for South Africans, if they were prepared to travel a relatively short distance in most cases, to have a go on the one-arm bandits or engage in more serious pursuits such as roulette and blackjack.
Fast forward to 1994 and a unified, democratic South Africa. A study by the Wiehahn Commission the following year recommended that the government legalise gambling, but to regulate it to “protect society from overstimulation, raise revenue through taxes, create employment and empower the historically disadvantaged”. The National Gambling Act of 1996 was passed incorporating recommendations from the commission. The Act allowed for provincial authorities to oversee gambling at a local level and license casinos and other gambling outlets. The number of casinos per province was strictly limited. At the top of the pyramid was the National Gambling Board, which, among other things, was tasked to promote a responsible approach to gambling.
Since then, as people gamble increasingly online rather than visit casinos, the industry has changed dramatically, with sports betting having become the gambling method of choice for South Africans.
Gambling in the traditional sense involves games of chance, such as slot machines and roulette. There is zero, or minimal, skill involved – if you bet on black in roulette, the probability of a win is about 48.6% (given that there is also a green 0 on the wheel). These games are interactive in the sense that you interact as a player in a game.
Sports betting – on which horse will win a race or on or how many goals Liverpool will score in a match against Manchester United – is different. If you study your teams or horses diligently, you can improve your chances of winning – not by much, but possibly enough to give you a slight edge over the average bettor. The important thing is that the bet is on a specified outcome (for example, Liverpool winning by two goals) and the odds are agreed on at the time the bet is placed. There is no interaction. You place the bet and await the outcome.
The rise of sports betting has been quite extraordinary. To quote some numbers, according to the statistics from the National Gambling Board, gambling revenue (the profits made by gambling companies, not the value of gambles or bets made), rose from R22.1bn in 2020/21 to R72.7bn in 2024/25. In 2020/21, about half of revenue came from sports betting; in 2024/25, R52bn, or almost three-quarters, of revenue came from this form of gambling.
The phenomenon is not unique to South Africa. Stellenbosch economist Johan Fourie, in a Substack article “Why sports betting is taking off”, says it is happening across Africa and around the world. He says the obvious reason is technology. “A smartphone, a mobile-money account and a betting app now allow a 20-year-old in Nairobi, Lagos or Soweto to place a live bet on a Champions League game, with no bookmaker and no cash, and then share it with friends over WhatsApp … technology has made betting both frictionless and social,” Fourie says.
But it’s more than that. “Sports betting thrives where incomes are volatile, formal saving is hard, and big, ‘lumpy’ expenses – school fees, a new roof, a car – are out of reach of most people,” Fourie says. He refers to research by economist Sylvan Herskowitz, who followed more than 1 700 sports bettors in Kampala. “Herskowitz shows that their targeted payouts match the size of upcoming lumpy expenditures and that when they do win, they disproportionately spend the money on those big items rather than on everyday consumption,” Fourie says.
The voices of concern are becoming too loud for the government to ignore. Consumers are blowing on sports betting what they should be spending on groceries and are even draining their funds in their retirement savings pots.
To revisit the recommendations of the Wiehahn Commission, let’s see how things measure up. Does the system…
Treasury has mooted a 20% tax on gambling, which, as one would expect, has been roundly attacked by the industry. My solution: a 20% tax that is ring-fenced for financial education at primary school level. Any backers?
* Hesse is the former editor of Personal Finance.
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