Large-Scale Gaming Machine Seizures Underscore Toughened Stance on Illegal Gambling in South Africa

The large-scale confiscation of illegal gaming machines in Cape Town has been welcomed by the Eastern Cape Gambling Board, which has praised the operation as a sign of a more robust approach to combating unlawful gambling activity.

Authorities believe the machines were intended for distribution throughout the Eastern Cape before investigators intervened.

South Africa, and the Eastern Cape in particular, operates under stringent rules governing the supply and placement of gaming machines. Only legally licensed Limited Payout Machines (LPMs) are permitted for distribution outside of casino environments. These LPMs may operate in tightly regulated settings such as pubs and restaurants, provided that all licensing and compliance requirements are met.

By contrast, other categories of gambling machines are restricted exclusively to casino floors. These include more traditional slot machines as well as approved iGaming terminals, which fall under a separate regulatory framework.

The seizures come at a time when South Africa’s gambling industry is entering a period of regulatory change. A proposed shift in the country’s tax structure remains firmly under consideration, with stakeholders currently submitting feedback on the planned increase. The proposal, first released in November last year, would modernise the national tax system by introducing a single, unified tax for online gambling.

While the original consultation deadline was set for 30 January, authorities have since extended the period, with responses now due by 27 February.

Even with the possible adjustments, South Africa is still regarded as having a relatively attractive tax environment. At present, gambling operators are taxed based on gross gaming revenue (GGR), with rates ranging between 6% and 20%. The proposed changes would move the country toward a harmonised tax model applied consistently across all provinces.

Regulators have also stepped up efforts to curb illegal gambling activity in both digital and land-based markets. Part of this enhanced enforcement includes a stronger focus on eliminating unlawful marketing, supported by the creation of a new monitoring body tasked with identifying and filtering out illicit promotional content.

This tougher stance was highlighted last year when Parks Tau, the Minister of Trade, Industry, and Competition, instructed his department to initiate the process of appointing a National Gambling Policy Council.

The move paved the way for a fresh strategic direction after a surge in gambling-related marketing content appeared across numerous online platforms, including YouTube. It also aims to clamp down on illegal online gambling advertisements and bring greater clarity to South Africa’s gambling regulatory framework, following a seven-year hiatus during which the Council last met in 2018.

By fLEXI tEAM