The facilitators, criminals and money launderers in SA’s gambling crisis

The online gambling industry, which is fast reaching catastrophic proportions in South Africa, does not exist in a vacuum.

It requires accommodative regulations and tax regimes – which SA’s antiquated and fragmented legislation supplies in spades. It feeds off a desperate population that wants to believe in the life-changing potential of an elusive jackpot. Above all, it needs a financial system that facilitates funnelling billions in bets through its platforms at the least possible cost and with the least possible hassle.

The South African financial services industry has made this shockingly easy – and has made itself an accomplice to the online gambling pandemic.

The ‘legals’

Practically all the banks, including Standard Bank, FirstRand (FNB) and Nedbank make gambling companies prominent pre-set beneficiaries on their apps – alongside things like airtime and municipal utilities payments. Absa and Capitec are seemingly partial exceptions although they too have gambling companies as “public beneficiaries”.

But another major part of the financial infrastructure that allows gambling to thrive sits with a set of major household name corporations that have developed bank-less “universal voucher” systems that bridge the gap between the cash economy and digital payments.

By their very nature, these systems target the poor.

And now, as far as we can ascertain, they are responsible for many billions of rands getting funnelled into the gambling “ecosystem”. While these systems were developed to provide unbanked customers with access to a variety of goods and services, gambling is seemingly now their foremost offering.

Here we count, among others, retail giant Pepkor and Blue Label Telecoms (now rebranded as Blu Label Unlimited, also a major shareholder of Cell C). More on these shortly.

And taking it a step further, the presumed gambling market leader in South Africa and other countries in the region, the New York Stock Exchange-listed Super Group, has just launched its own cryptocurrency in a bid to lock in gamblers in a nearly cost-free payment system.

This will, as one company executive told investors recently, allow the owner of Betway and Jackpot City to be “in total control of their [gamblers’] destiny”.

All the companies mentioned here argue to various extents that they are not the nation’s morality police. That does not, however, excuse the intentional and highly conspicuous efforts to channel customers toward gambling – an internationally recognised public health hazard which, as mentioned, is reaching catastrophic proportions in South Africa.

The ‘illegals’

With the local online gambling business growing in leaps and bounds and proving exceptionally profitable, it is also not surprising that new entrants are making a move on Africa’s frontier market.

Some of these are legal, but there are also, as industry-commissioned research has recently alleged, illegal offerings on a staggering scale.

Read more: The tax grab, the fake dotcoza online casinos and your vanishing winnings

Online role-players that are unlicensed to operate in South Africa are, according to this research, in fact larger than the local licensed market leaders – a terrifying prospect that, if accurate, would put the industry’s extraction from the economy at more than double what is generally supposed.

And another danger lurks in the background – the use of gambling platforms as money laundering vehicles. We will get to a concrete example but the system is inherently vulnerable because, as the Financial Intelligence Centre (FIC) told us, the possibility of anonymous transfers creates “a high probability of obscuring the origin of illicit funds in transaction flows”.

This was illustrated in a recent case involving the use of accounts at two licensed local gambling sites to receive the proceeds of bank fraud. We’ll get to this peek into what could be a major vulnerability in the financial system in due course.

In this second part of our investigation into the inner workings of this near-completely extractive sector, we try to unravel all these strands.

But first, we need to revisit the scale of the problem.

Chasing the big win

There has been a lot of media attention around the latest official statistics released by the National Gambling Board (NGB) – total wagering of R1.5-trillion in the year up to the end of March 2025.

This number, driven by online gambling, was eminently predictable given the trajectory in the past few years – amaBhungane in fact predicted this exact number earlier this year before the new figures were released.

And there is no reason to think the trend has not continued, putting South Africans on track to wager R2-trillion in the current financial year.

What matters, however, is not this nearly unfathomable number but rather the so-called gross gambling revenue (GGR). This is what the gambling companies actually make. Conversely, this is what gamblers actually lose.

The growth here was equally spectacular with a 45% leap to R52-billion in the past financial year for what is officially known as “betting”, as opposed to the receding casino industry. Extrapolating to the current year, this should reach something like R73-billion.

The aforementioned research commissioned and recently unveiled by the industry lobby group South African Bookmakers’ Association (Saba) has also raised the spectre of these official numbers being a massive underestimation. The headline claim is that the unlicensed operators like the global behemoth 1xBet as well as competitor Stake.com are, in fact, responsible for 62% of gross gambling revenue, putting the total at something like R87-billion before last year’s surge.

These operators are legally active in other countries but have made their platforms available to South Africans without being licensed here, hence the illegality.

To be sure, this is very much an estimate – even if it is a good estimate, with a number of caveats.

As has been noted elsewhere, the scale of expenditure on gambling is having economy-wide repercussions. One clear effect is the large-scale immiseration of especially poor South Africans whom survey data shows gamble away a disproportionate share of their income, including using their social grant and National Student Financial Aid Scheme (NSFAS) allowances.

The other effect is the growing displacement of productive sectors by the nearly entirely extractive online gambling sector.

StatsSA recently released its updated basket of goods for measuring inflation. This is an index of common goods and services purchased by households with each category given a weight based on survey data. The new numbers show gambling hoovering up an astonishing large and growing proportion of household spending.

These figures are from a 2023 survey – predating much of the current boom in online gambling. The results were, however, already extraordinary:

• South Africans two years ago already spent almost as much on gambling as they did on secondary and tertiary education combined.
• They spent more on gambling than they did on vegetables. They gambled away more money than they spent on bread and more than they spent on all non-alcoholic drinks combined.

To reiterate, these comparisons date from 2023, and online gambling has more than doubled since then, creating a properly systemic problem for key employment-heavy retail and hospitality businesses big and small as household expenditure gets diverted to an addictive and socially destructive industry that creates little to no jobs or investment.

Read more: Students wager NSFAS allowances and their futures at online betting sites

And as we showed in the first part of our investigation (and which is underscored by the claims about the size of the illegal market) a significant portion of this spending flies offshore to multinational gaming groups, meaning that profits are very unlikely to find their way back into the economy.

A number of forces are fuelling the fire.

Besides the colossal sums spent on carpet-bombing advertising by the gambling companies themselves, there is another major form of implicit marketing that has contributed to the growing scourge in a way that is, in some cases, partially quantifiable.

This is the commonplace elevation of easy pre-payments for gambling sites to a rote offering by financial service providers rivalling airtime and pre-paid electricity – the traditional anchors of payment technologies targeting the mass market.

Let us turn to this crucial infrastructure.

The banks

Anyone using a banking app will probably have noticed the pre-set merchants for which payments are simplified conspicuously, including the major gambling platforms Betway, Hollywoodbets, Lottostar, Supabets and others. This is true – albeit to a differing extent – for virtually all banks.

This is in no way illegal but it can be argued that the relatively high visibility given to gambling amounts to implicit marketing, all the while facilitating easy use of the gambling platforms.

It can be argued that the banks are simply meeting market demands, but this could be said of any legal but dangerous addictive product that is demonstrably causing social harm on a massive scale.

The banks are choosing to make access to gambling payments frictionless and prominent – because of course they are making money on each transaction.

FNB, for instance, makes gambling sites among the recipients automatically made available to people using its card-free ATM deposit system. Its app, like those of its peers, lists a number of gambling sites as “public beneficiaries” that can be paid without having to go through the hassle of manually adding account details. Its list of “voucher” providers, again in line with the rest of the industry, displays Betway vouchers near the top of the list.

The bank told us that it does not actively promote gambling, and that “gambling is not a priority category within our banking app, and gambling-related beneficiaries represent a fraction of our lifestyle services available on the platform”.

The situation is similar at Standard Bank, where vouchers for most major gambling sites enjoy pride of place. The bank tells us that: “We recognise that gambling can have serious social and financial consequences. While banks cannot act as moral arbiters, they do provide mechanisms for customers to protect themselves.

“There is room to strengthen our monitoring and to introduce timely nudges that warn customers when their behaviour could place them at risk of harm.”

This, however, again misses the point. While a bank cannot prevent anyone from gambling, what the banks are doing is implicitly encouraging it simply by making frictionless payments to gambling sites a highly visible part of their product offering.

Discovery Bank admits that there has been “increasing visibility and volumes” related to gambling, and says that it is “an issue to which our board has applied significant focus over the past 18 months”. It adds: “As an organisation we would welcome increased regulation around the promotion and participation in gambling given the potential social and personal cost which gambling presents more broadly – we have raised these concerns with the prudential and conduct regulators.”

However, this has not stopped it from electing to continue supporting the “increasing visibility and volumes” with the marketing of streamlined gambling payments through its app.

Nedbank seems to be the only bank we contacted that claims to be doing something, albeit not removing gambling as a pre-set beneficiary category. The bank told us that it had commissioned a survey in partnership with the Gordon Institute of Business Science to “address the increasing prevalence of gambling in South Africa”. The results have yet to be released.

But banks are just one of the conspicuous facilitators of gambling in South Africa. Others are arguably taking more direct aim at the mass market at the vulnerable low end of the income spectrum.

Read more: Gambling’s old guard wants to curb SA’s online enthusiasm

Cash to casino

In the past few years South Africa has seen the rapid rise of so-called voucher systems. Chief among these are 1Voucher, belonging to the retail conglomerate Pepkor, and Blu Voucher which is a rival offering from Blu Label, a major shareholder of Cell C. Another strong contender is OTT Voucher, belonging to a lesser-known private investment group CliqueFin.

These “universal” vouchers are generally also available through banking apps or at the major retailers, but have another key characteristic which is that they bridge the gap between the cash economy and the digital payment system. Vouchers can be bought for cash and redeemed online at any “payment partner” with which the voucher provider has an agreement.

Pepkor

Pepkor’s 1Voucher system, for instance, falls under the group’s subsidiary Flash – a payment system targeting informal traders, and in particular spaza shops. Essentially spaza shop owners use the Flash app to accept cash payments for vouchers, including for 1Vouchers, which customers can use to make online payments without the intermediation of a bank.

This is marketed as a great leap forward for financial inclusion, which for some applications it arguably is. However, inevitably and extremely conspicuous among the merchants accepting these vouchers are gambling sites.

1Voucher, which is the largest of the voucher systems, can be redeemed at a total of 128 payment partners. A total of 48 of these – which is to say 37.5% – are gambling websites, by far the largest category of the product offerings. A visitor to the service’s website will also be greeted by a “news” page where half of the articles are about gambling.

But how much money does this represent?

In its latest published financial results Pepkor noted that the 1Voucher system grew by an astonishing 37% in just one year to reach a throughput of R15-billion.

The crudest way to estimate how much of that was destined for gambling is to simply use the proportion of gambling sites among payment partners, which gives a minimum of R5.6-billion. The total is probably much higher considering that the rest of the payment partners include many quite niche offerings.

For a sense of scale this would make Pepkor responsible for more than a tenth of the money going into the online gambling sector, or at the very least the measurable licensed part of it.

This estimate on amaBhungane’s part was in any case not contradicted when we approached Pepkor for comment. Instead, the company chose a defensive posture, saying that “as we continue to expand our network of non-betting partners, the proportion of voucher redemptions at betting partners has steadily declined”.

Blu Label

The second major voucher system is Blu Label’s Blu Voucher. Here the offering is, on the face of it, even more severely skewed towards gambling. It has 62 payment partners listed on its website, of which no less than 40 are gambling companies. That’s 65% of the total offering.

According to Blu Label’s financial statements this voucher system had annual revenue almost identical to 1Voucher – R15.3-billion.

Using the assumption applied to 1Voucher this means R10-billion channelled to gambling websites. We have not received any response to questions we sent to Blue Label.

OTT

Turning to the last of the three major voucher systems, OTT Voucher, there are no publicly available financial statements to indicate the overall scale of money moving through to its payment partners.

The company, however, told us that gambling companies constitute only 11% of its payment partners, which is far less than its peers, although this is not necessarily an indication of revenue.

Retail

The voucher ecosystem extends far beyond these three “universal” systems.

There has also been a proliferation of product-specific vouchers, including for the major gambling sites like Betway and Hollywoodbets that can be bought from banking apps and, for instance, the “money market” counters at retailers like Checkers and a multitude of other channels.

The Shoprite Group, for instance, provides an e-wallet system for which gambling via Hollywoodbets is the third option for purchases after airtime and prepaid electricity.

None of these companies are “morality police” but, again, the spectacular pre-eminence of gambling in their contribution to the national payment system also arguably makes them complicit in the runaway growth of the gambling sector.

The payments frontier

In our first instalment on online gambling we zoomed in on the operations of Betway and its owner, the New York Stock Exchange-listed Super Group – which also owns Jackpot City, an online casino that is gaining traction in South Africa.

This is because the company is obliged to publicly reveal a great deal of its financial and operational information due to being a public listed company. The group also claims to hold “pole position” in South Africa’s online gambling market.

Read more: South Africa’s bad bet: How online gambling is a major source of extraction from the economy

As it happens, Super Group is again the exemplar of cutting edge developments.

The company recently launched its own cryptocurrency called ZAR Supercoin in partnership with South Africa’s largest crypto exchange, Luno.

It is a stablecoin, meaning that it is always worth exactly one rand and, unlike for instance Bitcoin which is “mined”, it is “minted” by simply buying coins from Luno, which holds rands as backing for the coins it issues. You can always go back to Luno and trade in the coins for rands.

As things stand you can do two things with these Super Group coins – gamble on the company’s sites or use them via the Lunopay app through which Luno facilitates payments at a wide array of merchants for everyday goods.

In the main, however, the purpose is to keep gamblers in the Betway and Jackpot City system and dramatically cut processing costs. In a quarterly teleconference with analysts earlier this year, Super Group’s CEO Neal Menashe was clear about this, making the jarring assertion that: “With the Supercoin, there’s lots of different benefits we can give [customers] as they start interacting with that because it’s a method that we will control, and we are in total control of their destiny.”

With regards to the bottom line, the company is also trying to get around the still substantial transaction fees associated with traditional banking, which can range from 3% to 6% in African countries. With crypto the transaction costs can be forced down to below 1%.

“But remember what happened in those markets is they deposit, they cash out, they re-deposit, they cash out, they re-deposit. So you got a lot of churn of the same money. So you’re paying deposit fees in and out all the time. So hopefully with our Supercoin et cetera, we can build that balance that stays in our ecosystem. We’re not paying for the same money about three, four or five times.”

South Africa is the first testing ground, after which the new ZAR Supercoin will expand to the rest of the continent.

The big next step is the launch planned for next year, of a dedicated Super Group digital wallet – essentially a way to store the new company crypto without an external exchange entering the picture.

Secret flows

The fact that any given gambling site is invariably a nexus for in- and outflows of massive amounts of money across all imaginable payment methods makes the whole industry ripe for abuse as a money laundering mechanism.

It is, for instance, possible to buy a voucher for cash, pass along the pin number to a third party who credits a gambling account and then withdraws that credit to yet another party’s crypto wallet. Gambling sites practically function as unlicensed exchanges.

This problem is not lost on the authorities. As mentioned above the Financial Intelligence Centre (FIC) is worried that online gambling sites operate in something of a regulatory grey zone with the National Gambling Board actually (and impotently) considering much of the industry illegal.

According to the Financial Intelligence Centre this creates “fertile ground for weak compliance with, and oversight of, anti-money-laundering laws such as the FIC Act. This vulnerability introduces the risk of transactions that allow the anonymous transfer of funds from one person to another and reporting failures relating to suspicious or unusual transactions. This risk has a high probability of obscuring the origin of illicit funds in transaction flows.” As we show below, gambling sites are in fact being used for what appear to be clear-cut attempts at money laundering.

Coming to the party (through the back door)

South Africa and the region more generally represent a booming frontier market for gambling companies from around the world, and competition is evolving fast. This includes legal and illegal players.

Recently one of the major international groups, the UK’s Betfred, made a quiet play by buying up smaller South African platforms. The group, owned by the family of billionaire Fred Done, started small with the acquisition of Betting World in 2021 for a modest £1.9-million.

The next year Betfred bought Sepels, another South African gambling company for £5.5-million. And then it ramped up its South African business enormously by buying 51% of the more high-profile Lottostar for £184,322,000 – more than R4-billion.

Betfred’s annual financial statements for the 2023 financial year show this operation rapidly contributing £41.4-million in net profit to Betfred’s bottom line – roughly R1-billion – in the same year.

But far bigger fish may have already slipped in under the radar.

We mentioned earlier research revealed by industry lobby group Saba, which claims South Africa has an illegal – or at least unlicensed – online gambling sector that may already be far larger than the legal one dominated by Super Group and Hollywoodbets.

While this conclusion clearly helps the industry deflect regulatory attention by identifying a larger bogeyman, the consultancy they appointed – Yield Sec – has some credibility. If nothing else it has done research for both pro- and anti-gambling clients across the world, as CEO Ismail Vali pointed out to amaBhungane.

Its research has grabbed headlines, with the main finding being that illegal gambling sites rake in substantially more gross gambling revenue than legal ones like Super Group and Hollywoodbets, hoovering up potentially as much as 62% of all gross gambling revenue.

This estimate is determined through a complex methodology involving the monitoring of web traffic to produce, in the first instance, figures for how many people “interact” with illegal gambling sites (including for instance clicking on ads, liking social media posts or registering on sites even if they do not gamble there).

Yield Sec then estimates actual visits to sites by unique individuals, and from there estimates expenditure using a “value-per-visit” based on each site’s peculiarities, including how easy it is to use and the kinds of games on offer.

The vast majority of illegal gambling in South Africa, according to Yield Sec, can be attributed to only two companies – 1xBet and Stake.com.

Although it has applied for a licence with the Western Cape Gambling and Racing Board, 1xBet has not yet received it despite already operating in the country. This makes it illegal.

In this shadowy part of the industry massive amounts of advertising, albeit all online, remains crucial. But just as with the legitimate operators, to a large extent it relies on the financial infrastructure that allows people to effectively commit crimes, mostly without even knowing it.

According to Vali, South Africans by and large use less exotic means to deposit money with gambling sites, meaning bank payments or vouchers as opposed to, for instance, cryptocurrency.

According to him, these payments are illegal even though gamblers would mostly not even be aware of it. The illegal sites generally also use opaque third parties to receive payments indirectly.

But access to financial infrastructure can be fragile.

Running for the hills

The revelation of the Yield Sec report has seemingly already had a dramatic effect – partially shutting down an alleged underground leader in the local industry, the aforementioned 1xBet.

After the report was released, amaBhungane tried to register with the illegal sites identified and deposit money into our new gambling accounts. Suddenly the sites no longer accepted South African payments, except through cryptocurrency.

After we signed up, 1xBet still briefly accepted ApplePay, but this functionality also soon disappeared.

Far more tellingly the company seems to have scrubbed the South African version of its website (1xBet.co.za) altogether. Using the Internet Archive’s Wayback Machine we could determine that the site was alive and well last year. If you try to visit it now it has been replaced by an “under construction” placeholder.

According to Vali this is often a consequence of research such as theirs being released. He told us that at the time of the research the illegal sites still very much accepted easy forms of payment from South Africa.

This is further borne out by archived pages from 1xBet’s now-defunct local site that even gives a breakdown of transaction costs for the different payment methods, including bank cards.

Considering that 1xBet is currently in the process of applying for a licence to operate legally in South Africa, the question might be asked whether this behaviour will weigh on the decision by the Western Cape Gambling and Racing Board.

Yield Sec’s Vali, however, claims that these victories are generally short lived and that when a large operator ducks for cover it is usually followed by several smaller illegal operators making a play for the void.

But illegal gambling is not the only crime associated with the sector

A laundry

In the popular imagination casinos have long been associated with money laundering. With online gambling the risk is, as mentioned, likewise acute as was illustrated by one incident, certainly not isolated, involving a South African businessman who fell victim to telephonic bank fraud.

The case has reached the Gauteng Division of the High Court in Pretoria where the National Director of Public Prosecutions (NDPP) this year applied for the forfeiture of funds in accounts held at gambling sites YesPlay and Hollywoodbets.

The story goes like this: after being called by ostensible representatives of the Standard Bank fraud division the victim was persuaded to provide his banking details. Before long three transfers were made from two of his accounts totalling just under R170,000.

The destination: the central accounts of YesPlay and Hollywoodbets.

At these gambling companies the stolen money was allocated to three different gambling accounts belonging to three otherwise seemingly unrelated individuals, two of whom live in Johannesburg and the third in Limpopo.

AmaBhungane tracked down the three ostensible owners of these gambling accounts. The particulars of the case suggest that at least some of them were used as “mules” in a larger money laundering operation – otherwise uninvolved individuals who avail themselves or their accounts as stopovers for money flows in exchange for a small payment.

One of the young gamblers whose account was seemingly used as a stopover for stolen money is Gentle Ndlovu, a student from Limpopo. He told us that he had been approached by someone via Facebook who essentially offered money in exchange for control of Ndlovu’s gambling account.

He told us he could not recall who the person was or pretended to be, but did say that the mystery individual said it would be like a “lottery ticket”.

Ndlovu also claims that he first thought it was an opportunity, but then figured it was just a scam and didn’t dwell on it.

Another one of the payments of stolen money went to the Hollywoodbets account of Ndzalama Sibuyi, who told us she doesn’t know anything about it but that her gambling account had been frozen.

While both these implicated individuals answered our calls and spoke freely, the third individual, Nkateko Raseala, blocked us on WhatsApp when contacted and did not answer phone calls.

The National Director of Public Prosecutions’ court papers include correspondence between the Financial Intelligence Centre and the two gambling companies implicated.

Hollywoodbets claimed that the relevant transaction was the only transaction ever recorded on the relevant account, which it has now suspended.

Interestingly YesPlay not only confirmed the deposits and suspended the accounts – it told the Financial Intelligence Centre that the same accounts were already “involved in another fraud matter related to a different amount, date, and bank”.

This begs the question why the accounts were not suspended already, and instead were able to receive more stolen funds.

It also indicates that the relatively small case of this single victim may slot into a larger scheme – potentially the tip of the iceberg when it comes to using online gambling sites as vehicles for money laundering.

We asked the Reserve Bank whether the online gambling sector presented a risk, to which it answered that its financial surveillance department “continues to investigate certain online gambling cross-border transactions and is in constant engagement with other regulatory authorities to address emerging risks, including online gambling”.

It said it would engage the banking sector on measures to prevent online gambling risks and “how banks can best detect, disrupt, monitor, mitigate and manage this risk”.

‘Every precaution’

Hollywoodbets sent us a lengthy account of its anti-fraud measures and asserted that, presumably at least as far as it knows, fraud represents “a very small fraction of overall transactional volume and remains the exception rather than the norm”. Considering the size of the operation with transaction volumes in the billions of rands a fraction of volumes could however still easily run into the hundreds of millions of rand.

The company told us that “while it is virtually impossible to eliminate all instances of fraud entirely – much like the challenges faced by financial institutions – we continuously refine our controls and response protocols to stay ahead of emerging threats”.

Hollywoodbets claims to conduct extensive Know Your Customer checks when people open accounts and, among other things scrutinise withdrawals with checks “which includes biometric authentication, document validation, and/or cross-referencing the customer with the Home Affairs database to ensure consistency and reduce the risk of fraudulent activity. We exclusively accept transactions that are processed through 3D Secure authentication protocols, ensuring that only verified and authorised payments are credited to client accounts in alignment with industry best practices and fraud prevention standards.”

At heart the company’s anti-fraud strategy relies on the banks, and specifically the receipt of alerts from banks that transactions might be dodgy.

“It is important to note that the effectiveness of this process is contingent upon receiving the bank alert in real time. Delays by the clients/banks in alert transmission may affect the speed and scope of our response.”

There is, however, seemingly a massive lacuna in this approach: the aforementioned voucher systems. We were able to easily buy a 1Voucher, send the pin to someone else and have them load credit to their gambling account. They could then withdraw by having the Hollywoodbets site issue a new 1Voucher for which the pin can again be sent to anyone. Essentially there is zero intermediation by any bank, hence no contact with the country’s already imperfect fiduciary controls.

To be fair to Hollywoodbets it places a very low limit on the amount of money a gambler can withdraw per day or month. The purpose might be to keep punters from leaving with all their cash, but the happy side-effect is that using the platform to launder money would be a very slow and arduous process.

Other gambling sites, however, have practically no limits whatsoever on the amounts that can enter and exit on a day.

Fingers crossed

As we pointed out in the first instalment of our investigation into the online gambling sector, South Africa’s gambling laws are ludicrously outdated having been written in 2004, before the advent of real smartphones, never mind online gambling as we know it today.

Given the rising tide of concern around the social and economic damage wrought by online gambling, it would be reasonable to expect that regulators are taking the need for reform seriously.

But as we also pointed out, the only perceptible move has been an attempt by the DA to introduce a problematic and probably stillborn Remote Gambling Bill that has been pooh-poohed by major operators.

The most vocal political opposition to the industry has recently come from Rise Mzansi MP Makashule Gana, who has proposed advertising bans and increased gambling taxes, among other things.

The most forceful recent regulatory proposal took the form of a proposal paper from the National Treasury entitled The Case for a National Online Gambling Tax.

Read more: Odds are National Treasury's proposed 20% online gambling tax will fuel illegal operators

As the name suggests the proposal is to levy a tax on gambling sites, specifically 20%, which sits near the middle of the spectrum applied in various other countries.

This would be a tax on gross gambling revenue and be in addition to the existing provincial taxes of between 6% and 9%, representing a major hike for any operator. Based on the officially measured gross gambling revenue of the industry, this would have been R10-billion in additional revenue for the fiscus in the past financial year.

The Treasury, however, claims that “the main objective of the reform would not be to raise further revenue, but rather to discourage problem and pathological gambling and their ill effects”.

It is not explained how this would be the case because the proposal is specifically not to institute excise taxes like the “sin tax” on cigarettes that are paid by the consumer (creating a disincentive to gamble) rather than the provider.

The Treasury also seems to believe it can catch the possibly enormous illegal part of the industry, saying that a gambling tax can be designed in a way that “ensures that illegal gambling operations are equally subject to the requirement to register for tax purposes and remit tax on their activities”.

However, the industry launched an almost vitriolic counterattack before the ink was even dry. One industry representative accused the Treasury of “meatball economics” and predicted court challenges.

Read more: Odds are National Treasury's proposed 20% online gambling tax will fuel illegal operators

What is clear is that the online gambling crisis has opened many fronts – from regulation to taxation, responsible behaviour and good governance by supportive companies in the financial sector, as well as a battle against outright crime.

It is going to be one hell of a war. DM