The South African government, and governments around the world in general, are having a torrid go at putting paid to projecting themselves as effective stewards of the wealth generated by the societies they govern.
If it isn’t the scandal-ridden GNU at a national level, it is the downright operational, financial and governance failure that is local government. What does not get an awful lot of attention in this body pit of incompetence, collapse and rout is provincial government.
Of course, this is beginning to change as the online gambling sector continues to burgeon in prominence and revenue. Provincial gambling licences are required to operate conventional gambling outlets through provincial licensing authorities.
Deputy minister of trade, industry and competition Zuko Godlimpi has pointed out that the rapid expansion of betting, which now comprises over 60% of gross gambling revenue (GGR), has transformed the landscape, presenting both opportunities and regulatory challenges.
The industry generated a total of R75bn in GGR as at March 31 2025, and the betting sector accounted for 70% of the total industry GGR, up from 60% in the previous year, according to the latest annual performance plan of the National Gambling Board (NGB).
Acting NGB CEO Lungile Dukwana acknowledges that gambling regulators face an ongoing challenge of offshore online casino operators offering their products to South Africans.
He says unlawful online gambling has spiked, driven by rapid smartphone penetration, economic pressures due to the high cost of living, and the infiltration of offshore operators and unlicensed platforms in the market.
This undermines the regulated industry, deprives the state of revenue and heightens risks of addiction, financial distress, and social harm, especially among low-income communities who increasingly view gambling as a source of income rather than entertainment, he warns.
Simply put, the revenue that South Africa’s real economy needs is vanishing due to the existence of a digital economic behemoth that is sucking capital out of the country.
One might wonder what online gambling and a lack of investment in the real economy have to do with each other. Simply put, the revenue that South Africa’s real economy needs is vanishing due to the existence of a digital economic behemoth that is sucking capital out of the country.
Sean Coleman, CEO of the South African Bookmakers Association, said a report commissioned by the association found that illegal operators accounted for about 62% of all online gambling in South Africa, diverting more than R50bn in gross gambling revenue offshore annually.
The report by Yield Sec adds that an estimated 16-million South Africans have engaged with these illegal platforms in the past year. Because these platforms operate and generate revenue in South Africa while not being licensed here, billions flow out of the country with little to no tax revenue.
Whether provincial government needs to be better equipped to clamp down on illegal operators to ensure more compliance with licensing and tax obligations, or a new watchdog with a fresh lick of paint needs to be established to this end, it is a leakage that the country cannot allow to continue.
Let’s look at the toolkit that we have at our disposal. No matter what President Cyril Ramaphosa will have you believe when he hops on his Investment Conference soapbox, gross fixed capital formation as a percentage of GDP has fallen from 15% in 2018, when he became president, and has failed to recover since.
The state-backed windfall of investment in infrastructure that many await won’t come, because the cupboard is doing extensive heavy lifting in other areas, such as padding fiscal debt costs and much-needed pro-poor policies.
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