Online gambling in South Africa is no longer a niche activity.
It is now the dominant force in the gambling sector, contributing close to 60% of total gross gambling revenue, which reached roughly R75-billion in the 2024/25 financial year. The industry is expanding rapidly, aided by smartphones, frictionless payments and relentless advertising.
Regulation, by contrast, has not kept pace.
Much of the public debate on gambling focuses on harm reduction, advertising limits, and how much tax the state should extract from operators. But beneath these questions lies a more basic issue that receives remarkably little attention: What exactly are gamblers told about the product they are using?
In the early 2000s, I served on the South African Council for Responsible Gambling, following the impact that gambling addiction had had within my family. That experience exposed me to both sides of the industry: the mathematics that underpin gambling products; and the very real social and financial harm that emerges when those mechanics meet scale, repetition and weak disclosure.
The conclusions that I have reached are not grounded in moral opposition to gambling. Rather, they arise from a deep concern about the way gambling is currently presented to the public, which obscures its most important economic reality.
Designed to lose
At the heart of gambling lies a simple mathematical fact. Every gambling product, whether a slot machine, an online casino game, a sports bet or a lottery ticket, is constructed with a negative expected value for the player. This means that, on average and over time, participants will lose money. This is not a behavioural tendency or a moral judgement. It is a design feature.
Each wager carries a built-in disadvantage, known as the house edge. On any single bet, a player may win. Over repeated play, however, the law of large numbers ensures that outcomes converge toward the expected result. The more you play, the more certain the loss becomes.
This distinction between short-term uncertainty and long-term certainty is crucial. Gambling feels random in the moment, but it is highly predictable in aggregate. Loss is not merely a risk. It is the statistically inevitable outcome of sustained participation.
This is well understood by gambling operators and by anyone trained in probability. It is far less well understood by many – perhaps even the vast majority of – consumers, who experience gambling through episodic wins, near misses and carefully curated stories of success. Advertising amplifies these impressions, foregrounding jackpots and exceptional outcomes, while backgrounding the mechanics that make the system viable.
Gambling is often defended as a form of entertainment, comparable to buying a cinema ticket or attending a sporting event. But the analogy is misleading. When you buy a movie ticket, the cost is fixed and known upfront. You do not risk further losses the longer you remain seated. Gambling, by contrast, is open ended by design. Its true cost only emerges through repetition.
This is not an incidental feature. Repetition is central to the business model. Ease of access, continuous play and rapid feedback loops are precisely what convert uncertainty into statistical certainty. The advent of different means of online gambling has greatly amplified these dynamics.
Over time, the system does what it was designed to do.
Cigarettes, but not gambling?
In most other areas of commerce, a feature this fundamental would trigger disclosure obligations. Investment products must disclose risks and expected returns. Credit products must disclose interest rates and the true cost of borrowing. Medication must list side effects, even when those effects are relatively rare.
In gambling, however, the defining characteristic of the product, that long-term loss is effectively guaranteed, is treated as implicit knowledge. Instead of plain disclosure, consumers are offered generic “play responsibly” messages, brief warnings and marketing that emphasises excitement and possibility.
The mathematics is technically available, but practically invisible.
This raises a basic question about informed consent. Can a choice be considered informed if the core economic reality of the product is not disclosed in a way that ordinary people can reasonably understand? Or do we rely on the assumption that the mere possibility of losing is equivalent to understanding the certainty of loss over time?
South African law already recognises that where harm is cumulative, probabilistic, and predictable under normal use, disclosure must be unavoidable. Tobacco regulation provides the clearest example. Cigarette advertising is effectively banned, including on digital platforms, and packaging is dominated by mandatory health warnings that occupy a substantial proportion of the surface area. These requirements do not rest on the assumption that smokers are unaware of risk, but on the statistical reality that sustained use leads to harm with high probability.
Gambling harm is also well researched. A substantial body of international literature links sustained gambling participation to financial distress, mental health disorders, family breakdown and elevated suicide risk, with population-level impacts that, in some studies, exceed those associated with smoking. Much of this research predates the rapid expansion of online gambling, which has dramatically increased frequency, accessibility and intensity of play.
Despite the obvious perils, gambling remains largely exempt from comparable disclosure standards. Advertising is pervasive, emotive and aspirational, while warnings are minimal and behavioural rather than economic. The contrast raises a legitimate question about regulatory consistency. If cumulative, predictable harm triggers mandatory disclosure in one domain, why does it not do so in the other?
Stop treating gambling as an ‘exception’
None of this requires banning gambling or denying personal responsibility. Adults are entitled to take risks, and many do so knowingly. The issue is not paternalism. It is transparency.
If sustained participation in a product leads to loss with near certainty, that fact is not incidental. It is material. And material facts, in most areas of economic life, are expected to be disclosed plainly.
Let me end with just one, concrete recommendation.
Gambling establishments – especially online – should be compelled to disclose the house odds on any game. Where they advertise, they should also be required to disclose the risk of loss in plain language. For example, a game with an 8% house edge should have to make a clear statement such as: “Repeated play erodes your stake. After 40 spins, R100 is expected to fall to below R4.”
As SA revisits gambling regulation, the government ought to take seriously the proposition that gambling does not deserve to be treated as an exception. The question is not whether gambling should exist. It is whether it should continue to operate without something akin to a health warning about its most defining feature: the high likelihood of consumers losing over the long term. DM
Dudley Baylis is a director of Bridge Capital, an independent M&A advisory, corporate finance, renewable energy and property advisory house.