Why is South Africa yet to Regulate their Online Casino Industry?

To understand the online casino industry in the “Rainbow Nation”, one needs to understand South Africa itself. As a nation, it is characterised by poor governance, constantly shifting priorities, and a state that is rife with corruption. While the nation showed promise of steadying the ship after the Apartheid regime, the country is currently stifling under the pressure of the pandemic, that had hit an already struggling economy. As a result certain governmental projects (a long list of them) have been left by the wayside. 

One of these has been the regulation of an already (potentially hugely lucrative) incredibly popular online gambling industry. As it stands, online gambling in the forms of casino games, poker, and bingo are strictly forbidden within the country. The only legal form of wagering over the internet comes in the form of online sports betting with registered bookmakers. 

This is not to say however that an online casino does not exist. The industry is alive and well. It is just not regulated, and it is not legal. 

This however, had been set out to change, but never came to fruition. South Africa’s online gambling sphere is regulated by the National Gambling Board, who guide their rulings based on the National Gambling Act. The first installment of the Act came in 1996, but has been revised twice since then, once in 2004, and again in 2008. 

This latest revision gave many online gamblers, as well as operators more hope, as a task force was created to look into the legalisation of other forms of gambling aside from online sports betting (namely interactive (online) gambling, and greyhound racing). In 2008, the new framework was signed into law, but was never given a commencement date. 

This rather odd situation left many puzzled. For one, it fueled an already illegal online gambling industry, as with the passing of the law, many operators began occupying the market, as it was believed that it was inevitable for the new law to be implemented (it was signed in). This almost one step forward, two steps back action of not promulgating the law has one major explanation. Government began showing concern that if they were to open up an online gambling sphere, the socioeconomic impact would be, let’s say, unsavoury. 

South Africans are no strangers to gambling. So much so that established news portal techfinancials have estimated that 1 in 10 South Africans engage in the practice. The worry was that if a regulated online gambling sphere was to emerge, many more individuals would suffer from issues that may arise from problem gambling.  Many however, would argue that regulating the currently thriving industry would only aid problem gambling issues, as a gambling industry left unregulated only leads to the alienation of affected parties who may suffer from gambling addiction. 

In a recent conference hosted by SBC (Sports Betting Community), board member at the tourism grading council, Lee Zama mentioned that even after the framework had been signed into law, the regulation of the gambling industry relies heavily on four caveats.

Namely safety (ensuring player safety, and implementing support for afflicted players),  policing (ensuring operators and government work in tandem), economic significance (would the state gain from the endeavour), and equity (would the regulation of the industry have an even and well distributed impact on all those involved). 

What’s clear to see, is that based on Zama’s input, and despite the fact that the framework for regulation has already been signed into law, there is plenty that the South African government needs to do in order to regulate what can only be described as a booming industry. Potential revenue in the form of taxable income, along with the protection of players should be enough to convince the state that’s an endeavour worthy of pursuing, but we will have to wait and see.