SA Betting Industry Waiting On Gambling Legislation

December 21 - According to a PwC report, South Africa boasts the third largest sports betting market in the world; moreover, it is also growing at a rapid pace, having reported an increase of 3.5 percent in 2010.

However, South Africa has also been facing a number of issues regarding legalizing its online sports betting industry, and although the government has made some attempts at regulation, the results are almost nonexistent. This state of affairs makes it very difficult for avid punters.

As such, authorities are still unsure of exactly when the online gambling legislation will fall into place, which means the country is missing out on millions of rand in taxable online gaming revenues. But that has not stopped many leading international gaming companies from setting their sights on the lucrative South African online gambling market.

For instance, large UK land and online sports betting giant Ladbrokes Plc recently signed a Joint Venture agreement with KaiRo International Group to launch an online sportsbook that hopefully one day will be licenced and regulated in South Africa.

Speaking about regulating the online sports betting industry in South Africa, Themba Marashi, chief compliance officer of the National Gambling Board of SA, said that regulation is required for many good reasons such as generation of revenue, protecting players from addiction to betting, and providing enhanced sports betting security to punters.

Although the Interactive Gambling Act of 2008 mentions betting regulation, nothing much was done. In 2009, the department of industry and trade stated that licenses will be provided for 5 years for an application fee of R500k and a betting tax of 6 percent will be imposed. But the South African betting industry remains unregulated.

A Look at the Global Sports Betting Industry

PwC released its “Global Gambling Outlook to 2015”, in which it stated that the French sports betting market was the largest in 2010 worth $3.8 billion, with Germany and South Africa not far behind. In the past one year, however, the French betting market has witnessed a sharp drop, with a further decline being expected during the current year. But PwC predicts that the French betting market might improve with the improving economic conditions.

The PwC states that the betting market of South Africa is the fastest growing in 2010 mostly because of betting upgrades and new sports betting licenses. Surprisingly, little growth is predicted from the new casinos for the forecast period. The PwC has predicted that a 15 percent tax imposed on winnings more than R25,000 will have an adverse effect on the betting market.

Moreover, the National Gambling Act in South Africa allows only 40 licensed sports betting outlets. Currently there are only 37, leaving little room for growth. Owing to this reason, few companies are willing to invest further in the market. However, all this could change if SA decided on a firm timeline as to when they would regulate the online gambling industry, and take advantage of the market.

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