South Africa’s R32 billion ‘casino’ that is only getting bigger
Since the Covid-19 pandemic, online betting has seen a massive boom, growing to twice the size of traditional casinos in South Africa.
That year, gross gambling revenue at traditional casinos nearly halved to R10 billion from R19 billion. It has steadily recovered since then, reaching nearly R17.5 billion last year.
However, while traditional casinos have been floundering, online betting has exploded.
Even during the five-year period preceding the pandemic, casinos only saw a marginal revenue increase from R17.8 billion to R18.8 billion.
On the other hand, online betting (racing, physical bookmakers, and online) doubled its market share from R4 billion to R8 billion.
While traditional casinos still dominated the industry at that point, the Covid-19 pandemic turned South African gambling on its head.
With people not being able to visit casinos in person anymore, they turned towards online betting, and since 2020/21, betting operators have outperformed their traditional in-person counterparts.
In the last financial year, betting and racing generated R32.5 billion, while casinos made R17.4 billion.
The total combined revenue from gaming this past year was about R60 billion.
Nkoatse Mashamaite, Chief Compliance Officer at the National Gambling Board told the Kaya Biz podcast that, essentially, online betting “has taken the lion’s share” of the gambling industry, now contributing more than half of the industry’s revenue.
The online gambling industry in South Africa is expected to keep growing, reaching a projected market volume of US$1,097.00 million by 2029, according to Statista.
“We noted the serious growth after the COVID years because a lot of people were driven to bet online, and this is the only mode of gambling that is permitted to be offered through the online mode,” Mashamaite said.
During COVID, land-based casinos struggled since they couldn’t operate in person, while betting services used online access to reach their audiences.
As restrictions lifted, betting continued growing online, while casinos could only return to pre-COVID levels of steady growth.
The pandemic did lead to some closures, like Malady Casino in the Free State, while Carousel Casino is still trying to stabilise operations.
Tsogo Sun, which operates numerous well-known casinos across the country, including Montecasino and Suncoast, saw similar results.
These casinos struggled during the pandemic, so they looked towards increasingly digital modes of operating.
This plan worked, and income generated from online betting doubled from the 2023 to the 2024 financial year, growing from a gross revenue of R100 million in 2023 to approximately R200 million for the 2024 financial year.
While betting has seen a boom online, some forms of online gambling have still not been legalised.
“It’s still a crime to offer a casino game through the online system,” Mashamaite said.
Despite this, licensed betting operators have started offering games modelled after casino games, which is a point of concern for the National Gambling Board.
Mashamaite said the lines are being blurred. People are staying on websites longer playing casino games like roulette and slots.
This has resulted in increased participation in gambling across the board, because the more time people spend more time playing these games, the more likely they are to become addicted.
Online gambling and betting also lack the barriers that gambling traditionally had in South Africa.
When gambling was first legalised in South Africa, casinos were located on the outskirts of towns, which meant that people had to travel to reach them.
The distance forced people to really consider whether they wanted to go and how much they wanted to spend when they got there.
In addition, there was also the chance that once people arrived at the casino, they would change their minds about wanting to gamble.
However, with the rise of online platforms, gambling has become accessible from anywhere, which means that it is easier for people to partake and lose a lot of money without even thinking about it.
Although legislation to legalise online gambling was passed in 2008, it was not implemented due to concerns about the vulnerability of citizens.
Mashamaite said that legalising online gambling would ensure that South Africans can gamble in a safer environment with proper oversight and monitoring.
While online betting may be legal, the requirements for online gambling would be much stricter.
The Financial Intelligence Centre’s “know your client” requirement, for instance, is one tool that could help monitor online gambling patterns, allowing for intervention when issues arise.
He said that, ideally, the 2008 legislation will be updated to address real concerns around online gambling.
Originally, the government treated online gambling as a separate form of gambling, but really, it’s just a platform for existing games.
Enabling current licensed operators to offer online gambling, like betting operators, would be a significant step forward.
He added that there is a need to address illegal gambling and proper licensing.
There have been cases where foreign operators, like one from Swaziland, tried to argue that because their server is located outside South Africa, South African citizens gambling on their platform don’t fall under South African law.
However, the courts clarified that the effects—financial defaults and debt—happen here in South Africa, which makes it illegal.
Tackling these challenges requires ongoing efforts, including cybercrime measures and enforcement, Mashamaite said.
Some operators even disguise gambling activities as internet cafes, where they switch off servers during inspections to avoid detection.
While South Africa’s police are highly committed to addressing this, enforcement can be complex given the rapid, tech-savvy tactics used globally to evade regulation.
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