The South African Bookmakers’ Association (SABA) has called for offshore prediction markets to remain outside the country’s regulated gambling sector until lawmakers establish a dedicated legal framework covering their operation.

The association’s policy position follows reports that more than R700,000 was wagered through Polymarket on who would become Johannesburg’s next mayor. The platform did not hold a South African gambling licence, and the activity took place without local taxation or responsible gambling requirements.

SABA argues that prediction markets function like betting exchanges because users take opposing positions against one another while the platform collects commission. The operator does not directly accept the financial risk attached to each wager.

“Prediction markets are, in substance, exchange betting products operating under a different label,” SABA CEO Sean Coleman said.

Participants place money on uncertain future outcomes, including sporting events and political decisions, with the expectation of receiving a financial return. SABA said operators should not avoid gambling rules by presenting these products as forecasting or information services.

“The distinction is therefore largely one of branding rather than substance,” Coleman said.

Current Laws Leave Licensing Questions Unresolved

South African gambling legislation does not expressly provide a licensing category for prediction markets. SABA has also questioned whether existing laws authorize betting exchanges, since those platforms do not act as bookmakers taking the opposite side of a customer’s wager.

The association previously raised concerns about the North West Gambling Board issuing exchange-related licences under current legislation.

“There is a legitimate question as to whether existing gambling legislation authorises such activities at all,” SABA declared.

SABA said provincial regulators may only issue approvals within powers granted by legislation. It therefore wants lawmakers to review gambling rules before permitting prediction markets or similar peer-to-peer products.

“The emergence of unregulated prediction markets in South Africa, including markets on political outcomes, highlights the urgent need for regulatory clarity,” Coleman said.

The proposed review would also cover financial market and electoral legislation. SABA said consumer protection requirements and anti-money laundering obligations would need consideration before authorities introduced any new licensing system.

Integrity and Financial Crime Risks Raised

SABA cited an April 2026 study by the International Federation of Horseracing Authorities, which described prediction markets as a “significant and emerging challenge for sports integrity”.

Products that allow customers to profit from failure or underperformance may increase exposure to match-fixing and insider manipulation, according to the association.

“These concerns become particularly acute when prediction markets extend beyond sports into political elections, legislative decisions, public appointments, regulatory outcomes and financial events.”

Markets involving elections, government appointments or legislative votes could create financial incentives to interfere with public decisions. SABA said South Africa currently lacks a dedicated system for detecting manipulation involving these markets, creating “a substantial regulatory blind spot”.

The association also identified anti-money laundering concerns connected with offshore platforms. Prediction markets can process large volumes of peer-to-peer transactions across several jurisdictions, and some services allow the use of crypto-assets.

“Where offshore prediction market operators are involved, South African authorities may have little practical ability to obtain transactional information or enforce compliance obligations,” SABA outlined.

This structure can limit access to transaction records and reduce the ability of local authorities to impose compliance requirements on foreign businesses.

Consumer Safeguards and Tax Revenue at Issue

Customers using unregulated prediction markets do not receive the protections attached to licensed South African bookmakers. These can include self-exclusion systems and formal dispute procedures. Licensed businesses also contribute to responsible gambling programmes and follow local advertising restrictions.

SABA said offshore platforms can move gambling-related income outside South Africa without supporting domestic services.

“Without a dedicated framework, substantial gambling-related revenues leave South Africa without generating meaningful tax contributions or supporting local economic development,” the association added.

The association has recommended that regulators classify prediction markets as exchange-style betting products and prevent operators from avoiding gambling oversight through product descriptions. It also supports a precautionary approach under which platforms remain unauthorized while lawmakers assess the appropriate framework.

“Until South African Gambling Regulators have enacted a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, anti-money laundering compliance and taxation, SABA submits that betting prediction markets cannot and should not be authorised to operate in South Africa and should be treated as exchange-style betting products falling outside the scope of the current legislative framework,” the association warned, as iGaming Business reports, citing the official report (pdf).

Under SABA’s position, offshore prediction markets would remain part of the illegal gambling market until South Africa establishes rules governing licensing and enforcement. Any future system would also need to address the risks associated with political markets and peer-to-peer financial transactions.