Illegal Offshore Gambling Drains Over R50 Billion from South Africa’s Economy, Warns SABA

Illegal online gambling is now siphoning more than R50 billion annually from South Africa’s economy, with unlicensed offshore operators responsible for nearly two-thirds of all online gambling activity in the country, according to the South African Bookmakers’ Association. The association on Tuesday sounded the alarm, warning that the proliferation of illegal online gambling has reached crisis proportions, posing serious risks to consumers, legitimate operators, and the broader economy.

“While much of the recent public and media debate has focused on the growth of legal online betting, the existential crisis lies in the scale and impact of illegal offshore operators that continue to target South African consumers unchecked,” said CEO Sean Coleman. He added, “These illegal operators pay no local taxes, contribute nothing to responsible gambling programmes, have no enforceable self-exclusion mechanisms, and pose serious risks to vulnerable players. Every rand spent on these offshore sites is money that leaves the South African economy, undermining jobs, tax revenues and community investment supported by the legal betting industry.”

Data from the Yield Sec South Africa 2023/24 Report, commissioned by SABA, revealed that around 62% of online gambling activity in South Africa now occurs on illegal platforms, compared to 38% handled by licensed and regulated local operators. The report also noted that “2084 unlicensed gambling websites actively target South Africans, with around 16 million people, or 27% of the population, estimated to have engaged with illegal platforms in the past year.”

“The financial impact is staggering. Illegal operators are estimated to be diverting over R50 billion in gross gambling revenue (GGR) offshore annually, depriving South Africa of significant tax income and social contributions that would otherwise support local communities, responsible gambling initiatives, and public programmes,” the association highlighted.

SABA further revealed that most of these illegal operators are hosted in offshore jurisdictions including Curacao, Malta, Gibraltar, and the Philippines. These platforms often operate under so-called ‘pseudo-licenses’ with minimal oversight while aggressively marketing their services to South African players. Local payment systems, including bank transfers, EFT gateways, and credit card processing through third-party payment providers, are frequently exploited by these illegal operators despite clear prohibitions outlined in Sections 8 and 11 of the National Gambling Act (2004), which make it unlawful to offer or participate in unlicensed gambling activities.

In response, SABA has signed a memorandum of understanding (MOU) with the South African Banking Risk Information Centre and is collaborating closely with the banking sector to curb illegal gambling transactions.

The association outlined a multi-pronged strategy to tackle the problem, recommending measures such as DNS blocking, IP blocking, and geo-fencing to restrict user access to illegal sites. Payment blocking and merchant code filtering are also proposed to disrupt illicit transactions, alongside cease-and-desist orders and prosecution of illegal operators through coordination with provincial gambling boards. SABA further called for stronger inter-agency enforcement, citing the examples of countries such as the UK, Australia, and Finland, which have successfully implemented payment and domain-blocking regimes. Restrictions on affiliates and influencers that drive traffic to unlicensed markets are also advised, coupled with public education campaigns to help consumers distinguish between legal and illegal gambling platforms.

With illegal offshore operators continuing to dominate the online gambling landscape, SABA emphasizes that urgent, coordinated action is essential to safeguard South Africa’s economy, protect consumers, and preserve the integrity of the licensed gambling industry.

By fLEXI tEAM