National Treasury Seeks 20% Online Gambling GGR Tax to Curb Social Harm in South Africa

South Africa’s National Treasury has unveiled a proposal for a national 20% tax on gross gambling revenue (GGR) from online gambling, positioning the measure as a tool to reduce the social risks linked to the rapidly expanding digital betting sector.

In a discussion paper released on 25 November, the Treasury outlined plans for the levy to cover all forms of online betting, including interactive gambling platforms.

Although Treasury officials estimate the measure could raise approximately R10bn ($580m) annually, they were clear that revenue generation is not the core objective. The paper stresses that the main intention is to “discourage problem and pathological gambling and their ill effects.” It further states: “From a public policy perspective, recreational gamblers do not place any external costs on society. However, to the extent that problem and pathological gambling impose a cost, it is in the public interest that such behaviour be regulated or reduced.”

The paper underscores the significant transformation of the country’s gambling environment, noting the rapid rise of online gaming. Once largely dominated by land-based gambling, the sector has undergone a dramatic shift due to technological advancements and increased digital access following the Covid-19 pandemic. Data from the National Gambling Board (NGB) revealed that total industry turnover for the 2024/2025 financial year surged to around R1.50tn, marking a 31.3% jump from the previous year. Betting—encompassing sports and horse racing—represented 75% of that turnover, with casinos contributing 19.5%.

The Treasury also raised concerns about the limitations of the existing provincial licensing system. Because online gambling inherently crosses geographic boundaries, regulators say provincial oversight cannot fully contain or control the activity. South Africa’s quasi-federal structure, which allows each of the nine provinces to establish its own gambling regulations, adds further complexity despite the NGB being the national regulator.

The proposed national tax aims to create a unified framework that would simplify oversight, boost compliance, and eliminate the practice of provinces undercutting each other through lower tax rates. The suggested 20% levy on GGR would sit on top of existing provincial taxes, bringing combined rates into the 26%–29% range. According to the discussion paper, these levels are broadly aligned with tax burdens imposed by other countries with large online gambling markets.

Under the proposal, online betting firms would need to register with the South African Revenue Service (SARS) and provide the same compliance information already supplied to provincial gambling boards, streamlining enforcement. Notably, the levy would also extend to operators offering online casino products—even though such gambling remains illegal in South Africa. At present, two provinces, the Western Cape and Mpumalanga, have taken the lead in licensing fixed-odds casino-style games, live-dealer formats and virtual games under their existing sports betting rules. Consequently, most online operators currently hold licences from one of these two jurisdictions.

Earlier this year, in April 2024, the Democratic Alliance (DA) introduced a bill intended to formally regulate online gambling at the national level, but progress on the legislation has been minimal. The Treasury’s newly published draft tax framework is now open for comment, with stakeholders invited to submit responses until 30 January.

By fLEXI tEAM