Treasury Proposes New ‘Sin Tax’ on Online Gambling and Extends Public Comment Period

The National Treasury of South Africa is preparing to introduce a new tax targeting online gambling, a move that would see gambling operators pay an additional 20% on the revenue they generate from online betting activities. As part of the consultation process, the Treasury has extended the deadline for public submissions on the proposal, shifting it from 30 January to 27 February 2026 to allow for broader engagement and feedback.

The department has described the proposed levy as a “sin tax”, drawing parallels with existing taxes imposed on products such as alcohol and tobacco. Under the proposal, the tax burden would fall on gambling companies rather than on individual bettors. According to the Treasury, the intention behind the measure goes beyond revenue collection. It has emphasized that the tax is also designed to curb gambling addiction and reduce the social and economic harm associated with excessive betting.

The proposal comes amid rapid growth in South Africa’s gambling industry. Data from the National Gambling Board indicates that total wagers climbed to R1.5-trillion during the 2024/25 financial year, reflecting a 31.3% increase compared with the previous year. Betting now dominates the gambling landscape, accounting for 75% of all gambling activity, with online platforms playing a central role. Revenue generated from betting has surged dramatically, rising by 390% over the past five years to nearly R52 billion.

If implemented, the new national tax would be imposed on top of existing provincial gambling taxes. This combined burden would raise the overall tax rate on online gambling operators to between 26% and 29%, significantly increasing their fiscal obligations.

Political reactions to the proposal have been mixed. Rise Mzansi Member of Parliament Makashule Gana has welcomed the initiative, arguing that gambling is increasingly damaging livelihoods and household incomes and that decisive intervention is necessary. In contrast, the Free Market Foundation has voiced strong opposition, maintaining that online gambling remains illegal under an incomplete piece of legislation dating back to 2008 and therefore should not be subject to taxation.

As the consultation period continues, the proposal has sparked a broader debate about regulation, public health, and the role of taxation in addressing the rapid expansion of online gambling in South Africa.

By fLEXI tEAM