New 20% tax on online gambling in South Africa aims to curb social risks

South Africa is considering imposing a 20% tax on online gambling to curb its rapid growth and address related social harms.

“Due to the surge in online gambling and its impact on society, it is proposed that a 20% tax is applied on gross gambling revenue from online betting, including interactive gambling,” the National Treasury said in its discussion paper published on Tuesday.

While the proposed tax could generate about R10 billion in additional revenue, its main purpose is to “discourage problem and pathological gambling and their ill effects,” the Treasury said.

The proposal seeks to address the steep rise in online gambling in South Africa, driven by widespread smartphone use and deepening economic hardship in a country with one of the world’s highest unemployment rates.

The trend has intensified calls for the government to establish a stronger regulatory framework to manage the industry’s growth and limit its social impact.

Data from the National Gambling Board show that about R1.5 trillion was wagered in South Africa’s gambling industry in the 2024–25, nearly one-third more than the previous financial year.

Gambling participation rose to 65.7% by end-2023, from 30.6% in 2017, with the National Lottery and online sports betting the most popular forms.

Most gamblers were young adults aged 25 to 34, while Mpumalanga, the Western Cape, and Gauteng provinces accounted for more than 80% of total turnover.

The move mirrors global trends. The UK taxes remote gaming at 21% of gross profit, and is consolidating remote levies, and New Zealand introduced a 12% offshore duty on online gambling profits.

Other measures under consideration include requiring local online betting operators to register and provide the nation’s tax agency with the same information they currently submit to provincial gambling boards for revenue collection.

“This should ease administration and industry compliance,” the Treasury said.