Betting on probability — the growing stakes of gamifying finance

In South Africa, prediction markets and the various clones of games of chance adjacent to sports betting are called “interactive gaming” — because in this country, the bookmaker sets the odds, but the house still always wins. Unless you’re a casino – then the house still wins, but the wager is up to the risk appetite of the players.

In his 2016 thesis for a doctoral law degree, Towards the Regulation of Interactive Gambling: An Analysis of the Gambling Regulatory Framework in South Africa, Segoane Monnye precisely summed up the country’s complex relationship with gambling: “With the exception of horse racing, any form of gambling was criminalised in South Africa until the dawn of constitutional democracy in 1994.

“In the same year, the Lotteries and Gambling Board Act, 1993, came into force, decriminalising, among ­others, casinos and gambling games within the republic.

“This act has since been repealed, and gambling is governed by the National Gambling Act, 2004, as well as by provincial gambling laws.”

This is still in force, and the National Gambling Board’s regulations state that “online betting is defined as a gambling game played through a bookmaker licensed in South Africa where the punter has no interaction with, or influence on, the outcome of the event they are betting on”.

Engaging in unlicensed offshore online gambling is a criminal offence, and winnings from such platforms can be forfeited to the state.

The digital assist

Prediction markets are not explicitly defined as a distinct category in South African gambling law, but they work on the same principles as fantasy betting or sports pools.

Under the law, fantasy betting and similar predictive portfolios are not specifically prohibited. However, depending on their form, they could be ­justified as a contingency under a bookmaker licence, or constitute a sports pool (on either side of the law) under the Lotteries Act, 57 of 1997.

Basically, a prediction market would only be legally permitted if structured as a licensed sports bet or a legally sanctioned sports pool — which is kind of what they are.

“Sports betting is very close to prediction markets in a way. A weight of money drives the odds and drives the movement,” Port­folioMetrix chief investment officer Philip Bradford explained to Daily Maverick.

“The way you would make money from this is by not betting on the favourite. It’s actually saying, well, is there a bet? What are the odds? For an investor, it’s a bit like that as well. It’s more taking advantage of when things get out of whack.”

Bradford’s position is informed by the gamification of the investment market and its net-positive effect on democratising portfolio building. From an efficiency perspective, prediction markets serve as additional signals to help decode a generally noisy environment.

AI has helped a lot to improve the signal-to-noise ratio — “the game has become far more around efficiency analysis, but the biggest part of that is ignoring the real noise in the background and focusing on what kind of matters” — and the knock-on effect is improved collation of investment assets. (Because more investors have access to AI efficiency, you get more innovation and more variety of investment vehicles, which gives more people more opportunities to get into investment.)

“The world has changed for us investors,” Bradford says of this new financial frontier. “It’s a bit like fantasy football in a way. You don’t have to employ the best players in the world — that’s incredibly expensive. Nowadays, as an investor, you can actually choose the best players for your own team very cheaply and very easily.”

He describes the portfolio mix of index funds and exposure to individual risks like crypto or international companies (Tesla, Nvidia, etc) through ETFs and derivative trading vehicles as players available to all categories of investors.

This then leads to a question about market education.

Into the Fintr-verse

FinMaster, a financial literacy board game developed by two South African industrial engineers, seems like a good first step to harnessing gamification in a way that will help the ­average South African understand the previous paragraph.

Co-founders Elijah Djan and Danei Rall met in their final year of university over a shared frustration: growing up in homes where financial literacy was never discussed. They had to teach themselves everything they knew about money.

“At the age of 17, I realised that other people did not have the same experience with money that my own family did,” Rall said of her modest single-parent background.

“As a young girl, I promised myself that I would learn how to plan for my future and make sure I would never need to look to anyone for money.”

Rall is the designer and chief operating officer of the game, and together with her business partner, Djan, a serial entrepreneur and chief executive of the holding company Fintr, she has grand ambitions to empower a billion kids across the continent.

“We wanted to build an app instead,” Djan recalls. “But everywhere we went, people would point to an initial pizza box iteration we had created as a board game and ask, ‘Can I buy that?’

“That’s when we decided to take the game idea more seriously and build something uniquely South African with the ability to challenge Monopoly.”

Think of it as a PG13 version of Cards Against Humanity, but with investment portfolios and financial concepts instead of midgets and innuendo. Ac­­cording to Djan, the game mechanic of traversing a board with a token is an outdated idea of fun.

The company has released an annual update since the first concept in 2021 — two-pot retirement was added to the 2026 edition — and offers updated game card packs to keep things up with the times.

In the end, the gamification of finance and markets is coming to South Africa, whether the laws are ready or not. Mzansi has the largest number of licensed crypto service ­providers after the US, so the appetite for shaking things up exists. As long as the education is done right, it should be fine. DM

This story first appeared in our weekly DM168 newspaper, available countrywide for R35.