SABA Calls on South African Regulators to Keep Prediction Markets Outside Gambling Sector Until New Laws Are Introduced

The South African Bookmakers’ Association (SABA) has urged regulators to prevent offshore prediction markets from operating within the country’s regulated gambling industry until legislators create a dedicated legal framework governing these platforms.

The association’s position comes after reports revealed that more than R700,000 was wagered on Polymarket over the outcome of Johannesburg’s mayoral race. According to SABA, the platform was not licensed to operate as a gambling provider in South Africa, meaning the betting activity took place outside the country's taxation system and without the responsible gambling protections required of locally licensed operators.

SABA maintains that prediction markets are effectively betting exchanges because participants wager against one another rather than against the operator itself. In this model, the platform simply facilitates transactions between users while earning revenue through commissions instead of assuming the financial risk of the bets.

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

The association argued that these platforms allow customers to stake money on uncertain future events—including sporting contests and political developments—with the expectation of making a financial profit. It believes operators should not be permitted to avoid gambling regulation by presenting their products as forecasting tools or information services rather than betting products.

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

Existing Legislation Does Not Clearly Cover Prediction Markets

SABA pointed out that current South African gambling legislation does not specifically provide a licensing category for prediction markets. The association also questioned whether the country's existing legal framework even permits betting exchanges, noting that such platforms differ from traditional bookmakers because they do not take the opposite side of customers' wagers.

The association referred to concerns it had previously raised regarding the North West Gambling Board's decision to issue exchange-related licences under the current legislation.

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

According to the association, provincial gambling regulators should only grant licences within the authority specifically provided by legislation. As a result, SABA believes lawmakers should first reassess existing gambling laws before allowing prediction markets or other peer-to-peer betting products to operate legally.

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

The association also recommended that any legislative review extend beyond gambling legislation to include financial market regulations and electoral laws. It argued that lawmakers would also need to consider consumer protection measures alongside anti-money laundering obligations before introducing any licensing framework for prediction markets.

Integrity and Financial Crime Concerns Highlighted

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

According to the association, products that allow users to financially benefit from failures or poor performances could increase the risk of match-fixing, insider manipulation and other integrity-related offences.

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

The association further argued that markets linked to elections, government appointments and legislative decisions may create financial incentives for individuals to influence public processes. It added that South Africa currently lacks a dedicated monitoring system capable of detecting manipulation connected to these markets, creating what it described as “a substantial regulatory blind spot.”

SABA also raised concerns over anti-money laundering risks associated with offshore prediction market operators. It noted that these platforms often process significant volumes of peer-to-peer transactions across multiple jurisdictions, with some also accepting crypto-assets as a means of payment.

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

According to SABA, this makes it more difficult for domestic regulators to access transaction records and enforce compliance requirements against foreign operators.

Consumer Protection and Taxation Also Under Scrutiny

The association argued that customers using unregulated prediction markets do not benefit from the safeguards available through licensed South African bookmakers. These protections include responsible gambling tools such as self-exclusion programmes, formal dispute resolution mechanisms and compliance with local advertising standards. Licensed operators also contribute financially to responsible gambling initiatives.

SABA additionally warned that offshore prediction market operators divert gambling-related revenue away from South Africa without contributing to local tax income or broader economic development.

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

To address these issues, SABA recommended that regulators formally classify prediction markets as exchange-style betting products and prevent operators from bypassing gambling laws through alternative product descriptions. The association also advocated for a precautionary regulatory approach under which prediction markets would remain unauthorised until lawmakers establish an appropriate legal framework.

Summarising its position, SABA warned, “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.”

Under SABA's proposed approach, offshore prediction markets would continue to be regarded as part of South Africa's illegal gambling sector until a comprehensive regulatory framework covering licensing, enforcement, consumer safeguards, integrity monitoring, taxation and anti-money laundering obligations has been enacted. The association also believes any future regulatory regime should specifically address the unique risks presented by political prediction markets and cross-border peer-to-peer financial transactions.

By fLEXI tEAM