South Africa’s National Treasury is seeking public input on a new proposal that could significantly change the landscape of online gambling in the country. As the online betting industry has exploded, the Treasury aims to curb the growing concerns around problem gambling while boosting government revenues with a 20% national tax on gross gambling revenue (GGR) from online gambling, including interactive betting.

National Tax to Address Problem Gambling

The proposal, outlined in a discussion paper, is designed to address the social issues arising from the rapid rise in online gambling. National Treasury emphasized that “recreational gamblers do not place any external costs on society,” but “problem and pathological gambling impose a cost,” which justifies regulation. The objective of the new tax is not just to generate revenue, but to mitigate these social harms by discouraging excessive gambling behaviors.

This 20% tax would be in addition to the existing provincial gambling levies, raising the overall tax burden on online gambling to between 26% and 29%. The Treasury predicts that the new levy could bring in over R10 billion annually by 2029, helping to offset the social costs of gambling-related problems.

South Africa’s gambling industry has undergone a dramatic transformation, with online betting becoming increasingly popular, especially after the COVID-19 pandemic. Technological advancements and greater access to mobile phones and the internet have made gambling more accessible than ever. “Gambling is now easily available online and accessible almost anywhere and at any time,” National Treasury stated, as reported by South African Government News Agency.

According to the National Gambling Board (NGB), the total turnover of South Africa’s gambling industry for the 2024/2025 financial year reached a staggering R1.5 trillion, representing a 31.3% increase from the previous year. Betting activities, including sports and horse racing, accounted for 75% of this turnover, with online sports betting and the National Lottery being the most popular forms of gambling.

However, this growth has come at a cost. The NGB reports that illegal gambling activities account for around62% of the total gambling volume, driven largely by unlicensed offshore operators who evade taxes and regulations. This illegal sector is a significant challenge for local regulators, who are struggling to oversee online gambling due to its cross-border nature.

Current Legislative Gaps and the Need for Reform

South Africa’s gambling laws, based on the National Gambling Act of 2004, are outdated and fail to adequately address modern online gambling. While some provinces, like the Western Cape and Mpumalanga, have adapted by issuing licenses for online casino games, many regions are unable to fully regulate the sector.

The proposed national tax aims to streamline the regulatory process and prevent provinces from competing with one another to attract operators through lower tax rates. By consolidating the tax system at the national level, it is hoped that South Africa can better address the challenges posed by the growing online gambling market.

In reviewing international best practices, the Treasury found that many countries with large online gambling markets have implemented similar or even higher tax rates. For example, several European countries and Australia apply taxes of 20% or more on online gambling revenue, which is often used to fund addiction treatment programs and stricter gambling regulations.

South Africa aims to follow this model by using the tax revenue to fund social programs that address gambling-related harm, such as addiction treatment and public education campaigns. However, the Treasury also cautioned that if the tax rate is too high, it could drive more gamblers toward illegal, unregulated sites, exacerbating the very problems the tax is designed to address.

National Treasury has released the draft proposal for public comment, allowing stakeholders to provide feedback on the planned tax and its potential effects. The deadline for submitting comments is 30 January 2026. The public consultation is an essential part of the process, as the government seeks to balance revenue generation with the need to reduce the negative social impacts of gambling.