South Africa extends gambling tax consultation

• National Treasury moves deadline to 27 February 2026 for feedback on proposed 20% online gambling tax.
• Tax could generate over R10 billion annually but faces backlash over constitutional grounds.
• Industry warns measure could push bettors to unregulated offshore sites.

South Africa’s National Treasury has extended the public consultation period for its proposed 20% national online gambling tax.

The deadline for submissions has moved from 30 January to 27 February 2026, following multiple requests from stakeholders for additional time to respond to the contentious proposal.

The discussion paper, published on 25 November 2025, proposes a 20% levy on gross gambling revenue from all online betting operators. This would be a national tax layered on top of existing provincial gambling taxes of between 5% and 9%, bringing the total tax burden to approximately 26% to 29%.

Revenue generation versus harm reduction

Treasury estimates the proposed tax could generate more than R10 billion annually for the national government. Data from the National Gambling Board shows approximately R1.5 trillion was wagered in South Africa during the 2024/2025 financial year, representing a 31.3% increase from the previous year.

The primary objective is not revenue generation.

“The main objective of the reform would not be to raise further revenue, but rather to discourage problem and pathological gambling and their ill effects,” Treasury stated in its discussion paper.

The tax would function as a “sin tax”, similar to levies imposed on alcohol and tobacco products.

Treasury noted that 11 jurisdictions internationally already levy a 20% tax on gross gambling revenue, while 16 others charge higher rates. The department has positioned the measure as a response to what it describes as an epidemic of gambling addiction in South Africa.

Constitutional concerns mount

The proposal has triggered fierce opposition from industry stakeholders and legal experts who argue the measure violates constitutional principles. Critics contend that gambling regulation is primarily a provincial competence under South African law. Legal analysts say imposing a separate national tax on the same revenue base may illegally centralise fiscal power.

Ayanda Zulu, a political studies graduate from the University of Pretoria and intern at the Free Market Foundation, said:

“This bizarre proposal should not see the light of day.”

The Free Market Foundation described the measure as “a naked revenue grab that threatens the very existence of the legal gambling market”.

Several major operators have voiced opposition in recent submissions. Sun International and the South African Responsible Gambling Organisation warned that the tax could “destabilise the regulated market” and encourage migration to illegal offshore sites.

The South African Bookmakers’ Association and other legal analysts criticised the proposal for constitutional risks and insufficient consultation.

Interactive gambling complications

The draft includes interactive gambling in the tax base, despite online casino games remaining technically illegal under existing South African law.

Two provinces, the Western Cape and Mpumalanga, have adapted by allowing fixed odds bets on casino games, live-dealer games and virtual games under current sports betting regulations. The majority of online operators today hold licences issued in these two provinces.

In April 2024, the Democratic Alliance, then in opposition, introduced new online gambling legislation to parliament. No meaningful progress has been achieved to date. Legal commentators note that taxing activities without a clear national framework complicates enforcement and undermines policy coherence.

Historical context and enforcement challenges

South Africa has attempted gambling tax reforms before. A 15% withholding tax on winnings proposed in 2011 and a 1% national levy in 2012 were both abandoned after consultations revealed enforcement complexities.

Data from the National Gambling Board indicates that illegal gambling activities account for approximately 62% of total gambling volume, driven largely by unlicensed offshore operators who evade taxes and regulations. This illegal sector presents challenges for local regulators who struggle to oversee online gambling due to its cross-border nature.

The South African market has seen innovation in payment methods, with operators like Super Group launching the ZAR Supercoin stablecoin to facilitate transactions, though such developments occur as regulators grapple with oversight of both legal and illegal operators.

Treasury defends its approach by arguing that online gambling, unlike physical casinos, creates few local jobs or infrastructure benefits and is “easily available online and accessible almost anywhere and at any time”, necessitating a unified national response.

Industry prepares submissions

Comments can be submitted via email to [email protected]. Treasury has urged the public, industry stakeholders and civil society organisations to make submissions before the revised deadline, noting that public input will play a key role in shaping the final policy outcome.

The extended deadline gives stakeholders additional time to prepare detailed legal and economic arguments. The battle lines are drawn between government officials seeking a new revenue stream and social policy tool, and industry representatives warning the play risks undermining the rule of law and market viability.

As the February deadline approaches, the consultation period will test whether South Africa can balance its stated objectives of reducing gambling-related harm with maintaining a viable regulated market. The outcome will shape online gambling regulation across the country for years to come.