How Covid-19 flipped SA’s gambling industry overnight

In fiscal year 2020/21, as South Africa’s hard lockdown shuttered every casino in the country, betting overtook casinos for the first time in history as the dominant force in the country’s gambling economy. Casinos’ share of Gross Gambling Revenue dropped from 56.3% to 39.2% in 12 months, a 17-percentage-point decline. Betting surged from 26.8% to 45.6%, claiming the top position in the market. This wasn’t a gradual trend. It was a sudden shift.

Four years later, the gap had widened. By fiscal year 2023/24, betting accounted for 60.5% of the market, while casinos accounted for 29.3%. That represents less than one-third of the entire gambling economy. What began as a lockdown-driven change has become the permanent structure of how South Africans gamble. The data doesn’t lie: an entire industry flipped on its head in a single year.

Three eras, one industry

Analysis of National Gambling Board data from 2009 to 2024 reveals three distinct chapters in South Africa’s gambling story. Each era tells you something different about how South Africans gamble, where they gamble, and why they make these choices.

Figure 1: Gross Gambling Revenue market share by gambling mode across 15 fiscal years.

Era one: The casino kings (2009-2019)

Casinos dominated this period completely. In 2009, they controlled 84.4% of all gambling revenue in South Africa. Venues like Sun City, GrandWest and Emperors Palace functioned as destinations rather than just gambling locations. People visited for the complete experience, the atmosphere, dining, entertainment and the sense of possibility that these sprawling complexes offered.

Betting certainly existed during this time. Horseracing had a long history in South Africa, and sports betting shops were established fixtures in many communities. However, these operations were specialised and represented about 10% of the market. The limiting factor was infrastructure. Mass-market mobile betting required smartphones, affordable data and reliable internet connectivity. In 2009, these conditions weren’t widely available to most South Africans.

The situation changed gradually over the following decade. Mobile phone penetration among adults approached 90%. Data costs declined as competition among network providers increased. Technology improved with each passing year. By 2019, casino market share had declined to 56.3%, though they remained the dominant sector. Betting had grown to 26.8%, more than doubling its share over 10 years through steady digital adoption.

Industry analysts predicted eventual convergence, with betting potentially reaching parity with casinos around 2025 or 2026. These projections were off by about five years. The timeline would compress dramatically due to an unforeseen global event.

Era two: The Covid rupture (2020/21)

On March 23, 2020, President Cyril Ramaphosa announced one of the world’s strictest lockdowns in response to the Covid-19 pandemic. The lockdown began on 27 March 2020. Every casino in South Africa closed immediately. For months, these revenue-generating facilities remained shuttered. Slot machines were unplugged. Table games were covered. Staff were furloughed. Fixed costs continued, property taxes, security and maintenance, while revenue dropped to zero.

Online betting platforms faced no such restrictions. They operated continuously through lockdown Levels 5, 4, and 3. When global sports shut down, operators adapted. They offered virtual sports, esports, and international leagues that were still running. When traditional sports returned, betting activity increased significantly.

Figure 2: Market share comparison showing how FY2020/21 changed everything.

The fiscal data shows the scale of this disruption. In FY2020/21, casino GGR share fell from 56.3% to 39.2%, a decline of 17 percentage points. Betting GGR share rose from 26.8% to 45.6%, an increase of 18.8 percentage points. The market didn’t rotate gradually. It inverted in one year. This was comparable to the disruption e-commerce caused to traditional retail, sudden, structural and seemingly permanent.

Era three: No going back (2021-2024)

Industry observers expected casinos to regain market share when they reopened after lockdown restrictions were lifted. This didn’t happen. Instead, the divergence continued. By fiscal year 2023/24, betting accounted for 60.5% of total revenue, while casinos accounted for 29.3%. The gap widened each year following the pandemic.

The pandemic didn’t temporarily pause casino growth. It fundamentally changed how South Africans gamble. What industry insiders initially dismissed as a temporary anomaly caused by lockdown constraints has crystallised into a permanent restructuring of the gambling sector.

The money behind the numbers

South Africans wagered R1.14-trillion in fiscal year 2023/24. This generated R59.3-billion in Gross Gambling Revenue, representing a 25.7% increase from the previous year. Of that R59.3-billion, betting accounted for R35.9-billion, while casinos accounted for R17.40-billion. The disparity illustrates how dramatically the market has shifted.

Sports betting alone accounted for R761-billion in total wagers during 2023/24, representing a 76% year-on-year increase. Online and mobile platforms now account for 66.6% of all gambling spending in South Africa. This digital dominance extends beyond sports betting to encompass online casinos, poker platforms and other forms of remote gambling.

As of March 2024, 37 casinos are operational out of a total of 41 licences issued by provincial gambling boards. Four licences remain unused. This indicates where operators see future opportunities in the market, or rather, where they don’t. In an industry where licences are valuable commodities, unused licences suggest operators believe the economics of physical casinos no longer justify the capital investment required.

The forgotten losers

While betting and casinos competed for market dominance, two smaller sectors experienced significant declines that received little public attention. These sectors tell their own story about the broader shift away from physical, social gambling toward digital, individual experiences.

Bingo peaked at 11.3% of revenue in fiscal 2019/20 before collapsing to just 3.2% by 2023/24. Bingo’s core value proposition is social interaction. It appeals primarily to pensioners and older demographics who meet regularly for the community aspect as much as for the game itself.

When lockdowns forced social distancing, bingo lost its fundamental appeal. The game itself, random number matching with minimal skill component, cannot compete with betting apps or online casinos when stripped of its social context. Without the social element, participation declined sharply and has not recovered, even as other restrictions have been lifted.

Limited Payout Machines (LPMs), those electronic gaming devices in pubs and taverns, grew from around 1% in 2009 to reach 7.0% by 2023/24. While this represents growth in percentage terms, these machines face structural disadvantages compared with online alternatives. They occupy locations such as pubs, taverns, and convenience stores that saw traffic decline during lockdowns and never fully recovered to pre-pandemic levels. They also cannot compete with the visual sophistication and reward structures of online gambling platforms. When people can bet on live sports while watching from home, the appeal of going to a tavern to play a basic slot machine diminishes considerably.

Four hard truths

The National Gambling Board data reveal patterns that industry observers didn’t anticipate and that challenge conventional assumptions about gambling behaviour and market dynamics.

First, the disruption was instantaneous rather than gradual. This was the fastest peacetime industry restructuring in modern South African economic history. There were no warning signs or gradual shifts that might have allowed incumbents to adapt. The reversal occurred in a single fiscal year. Markets typically shift over years or decades, allowing established players time to adjust their strategies. The South African gambling industry had no such luxury.

Second, the divergence continues to widen rather than stabilise. Between fiscal 2021/22 and 2023/24, betting’s share grew from 52.3% to 60.5%, while that of casinos fell from 35.1% to 29.3%. The divergence has widened each year with no equilibrium in sight. This contradicts the expectation that markets eventually find balance points where different segments coexist in relatively stable proportions.

Third, total market growth masks the extent of casino decline. Total Gross Gambling Revenue grew 25.7% year-on-year, suggesting a healthy, expanding market benefiting all participants. However, that growth went almost entirely to betting. In absolute terms, casino revenue remains depressed compared with pre-pandemic levels, even as overall gambling spending increases. The aggregate numbers conceal a winner-take-all dynamic where betting platforms capture nearly all incremental spending.

Fourth, this represents a comprehensive shift from physical to digital rather than casino-specific challenges. Every gambling mode that requires physical presence, such as casinos, bingo and Limited Payout Machines, has declined or stagnated. Every digital mode, particularly sports betting and online platforms, has grown significantly. This represents a wholesale migration from physical to digital gambling, not merely a problem for casinos. The pattern suggests fundamental changes in consumer behaviour and preferences that extend across the entire gambling sector.

The question that remains

The data shows what happened with remarkable precision, documenting the transformation through official statistics that are difficult to dispute. However, the data cannot fully explain why the transformation became permanent rather than temporary.

South Africans continue to gamble actively. They wagered R1.14-trillion last year, demonstrating sustained interest and engagement with gambling activities. The appetite for gambling hasn’t diminished. However, this gambling now occurs predominantly on mobile phones rather than on casino floors. The location and method have changed while the underlying behaviour persists.

When casinos reopened after lockdown restrictions lifted, industry analysts expected a return to historical patterns. The betting surge appeared to be an artefact of lockdown constraints and forced digital adoption that would reverse once physical venues reopened. Casino operators invested in enhanced safety protocols and marketing campaigns designed to win back customers. This expectation proved incorrect. Customer traffic to casinos has not returned to pre-pandemic levels in most properties.

The transformation has proven permanent. Industry analysts, investors and casino operators all misjudged the situation. They underestimated how quickly consumer behaviour could change and overestimated the strength of attachment to physical gambling venues. The data now documents their collective error.

What changed during those lockdown months? Why didn’t gamblers return in significant numbers when casino doors reopened? The numbers document the change with precision, but offer limited insight into the underlying causes. Part Two of this investigation examines these questions through analysis of five structural forces that made this transformation irreversible and will prevent casinos from reclaiming their former dominance. The explanation extends far beyond Covid-19 itself. DM

Methodology: Analysis based on National Gambling Board (NGB) Annual Reports, FY2009/10 through FY2023/24. GGR = Gross Gambling Revenue, representing the total amount wagered minus winnings paid to players across all gambling modes.