South Africans have always been keen gamblers, however, the conservative apartheid government in 1965 banned all types of gambling except for horse race betting. Today, only land-based casinos along with land-based and online bookmakers, licensed by South African National Gambling Board (NGB), are legal. Authorities prosecute online casino’s operators, but there was no case in which they went after individuals who gamble online.
- Approximately 47% of the SA population uses gambling as a recreational activity.
- Land based industry accounted for $1.7 billion in 2012 according to PricewaterhouseCoopers.
- Data for online gambling is incomplete, but a recent study estimated its value at $0.4 to 1 billion annually.
The SA Gambling Market
The SA market consists of a range of categories and continues to grow. During the economic slow-down of 2013, gambling industry continued to show growth. The National Lottery continues to hold poll position, but casinos remain the top option chosen by most South Africans.
It is almost impossible to monitor the growth in online playing (the reason is a lack of official data). Conservative estimates value online gaming at $0.4 to 1 billion annually. A study cites individual online poker players from South Africa earning (or spending) as much as $20.000 in one day.
Licensing & Legalities
Gambling in South Africa is currently governed by the National Gambling Act of 2004. It states: «A person must not engage in or make available an interactive game other than an interactive game provided under a license issued in terms of this Act.»
In paragraph 8 the Act says:
«Despite any other law, a person must not engage in, conduct or make available a gambling activity except:
- A licensed gambling activity;
- Social gambling that is licensed or otherwise permitted in terms of any applicable provincial law;
- An informal bet, unless, in the circumstances, there are valid grounds to conclude that any of the parties to the bet intended to establish an enforceable contractual relationship when they staked, or accepted the stake of, money on that contingency».
SA legislation states that playing online is only legal when players make use of a site that has been approved and licensed by NGB. So far, no provision has been made for the licensing of online gambling.
In April 2014 the draft of Remote Gambling Bill of 2014 was introduced by Shadow Minister of Trade and Industry Geordin Hill-Lewis. In simple terms, this bill strives to allow for the licensing of online gambling activities. The Bill was expected to be brought before parliament no sooner than February 2015. But its prospects darkened noticeably as on January 17 SA Department of Trade and Industry poured a big bucket of cold water on iGaming legalization supporters. The DTI statement made it «publicly clear that there is no intention on the part of the government to propose the legislation of online games».
Thus, as of today on the Internet only sports betting (including horse racing) within SA is lawful. Playing online in a casino or poker room, run by a South African or international operator is not legal. At the same time, an estimated 250.000 South Africans still test their luck and gamble on international sites.
How Are These Laws Enforced?
To date, no concerted effort has been made to enforce laws prohibiting online gaming at sites not licensed by the control board. The fact that many of the online casino operators accepting Rands, are based outside the borders of SA, makes enforcement all the more difficult. However, there have been actions against such operators. Piggs Peak Casino’s online gambling site operating from Swaziland was forced to shut down access to SA gamblers in 2012 in a landmark ruling by the SA High Court. This case is currently in an appeal process, and although the SA Gambling Board says there are several other cases in the pipeline, these await the outcome of the Piggs Peak appeal.
Despite strict legislation that requires open access by the government to private bank account information (FICA), no online gamers have been prosecuted under the National Gambling Act of 2004. However, a 2014 court ruling indicates that South Africa-based online casino operators, who are not licensed, will be operating on dangerous ground and stand to pay large fines or even face imprisonment.
Other than the National Lottery, casino games are by far the most popular in SA followed by sports betting, limited payout machines (slot machines with a restricted bet and prize) and bingo, according to statistics published in 2013 by Price Waterhouse Cooper. All sectors show annual growth in revenues with bingo being the leader (66% growth in 2013/2014 financial year).
The statistics on online gambling in SA is not definitive and can only be assumed to follow a similar trend of legal gaming. The latter shows casino games representing 82.5% of the market compared to 8% on sports betting, 6.6% on LPMs and 2.9% market share for bingo. These figures are based on 2014 NGB statistics and indicate market share for legal gaming.
Deposit and Payment Methods
Depositing Options for SA Online Gamblers
According to SA Banking regulations, Credit Cards (e.g. Visa, MasterCard, Diners’ Club, American Express) are the only legal vehicle for deposits to international payment sites like Skrill and Paypal. The credit cards depend on the payment vehicle you choose. Those, who choose to gamble online, may find direct payments from their credit cards blocked owing to regulation by banks. Many South Africans make use of prepaid cards like Ecocard and online payment platforms like Skrill and Neteller. Ecocard is a prepaid card that allows you to load credit online. Participating casinos can then deduct credit from your e-wallet as you play.
Deposit options from these platforms vary. At all times, you will be asked the reason for an international payment to any of your SA bank accounts in accordance with Reserve Bank regulations. Paypal works through First National Bank (FNB) online profile only but allows for a transfer from an FNB Paypal account to your regular account. This process can take up to 10 working days. Skrill is quicker, more flexible and allows for deposits into a savings account. The regulation of online activity and interaction with international websites would prove highly controversial, and one wonders how government proposes to enforce their ruling.
Withdrawal Options for SA Online Gamblers
Restrictions, applied to withdrawal options, are similar to depositing ones – direct payments to credit cards may be blocked by banks. But withdrawal method to Visa and Mastercard credit cards is offered by both sport betting platforms and online casinos. Bank transfers to player’s account are much more likely to get through. In both cases a player can be asked to provide his documents to confirm his/her identity:
- A copy of photo ID
- A copy of credit card (front and back)
- A proof of address (a copy of utility bill, bank statement)
When using withdrawal options, mentioned above, you should keep in mind, that South African residents’ bank accounts are monitored by the SA Revenue Services. And depositing significant sum of money into your bank account may rouse their interest.
Hence, one might find withdrawal through e-wallets more convenient. Skrill and Neteller are most widely used for this purpose.
Since the first online casino in South Africa was launched, the mobile gambling market has boomed under the influence of the increased mobile access and technology fast-paced improvement. Importantly, mobile gaming (gaming on cell phones/ tablets) generated R694 million in 2012. The mobile gaming industry is expected to be 39% of the total South Africa’s gaming revenue by 2017.
Due to the fact that online gambling is legal exceptionally in the form of sports betting in SA, there are no local mobile gambling platforms either. South African players that want to gamble via their portable devices have to access offshore casinos. Among the most popular mobile gambling platforms for SA players, there are BetVictor Casino, BGO Casino, and Royal Vegas Casino.
Choosing Online Casino
Choosing the Right Option to Play
Despite the complicated legislation aimed at SA casino operators, South Africans still gamble where and when they choose without fear of prosecution. If you are concerned about the legalities, you will have to wait for online casinos to be licensed – that might even happen this year as the Remote Gambling Bill of 2014 is being processed in the parliament.
However, if you’re willing to gamble on non-licensed sites at your own risk, your options are open, and your primary decision-making criteria should be based on the following:
- Reliability: do they pay out when you win? You can search the Internet in order to determine the reliability. Disgruntled users are sure to post warnings online. However, you can also look for eCOGRA certification that is only granted to reliable online gaming sites.
- Customer service: test this by contacting ‘help and support’ and seeing whether you receive prompt, useful answers.
- Payout Ratio: This is based on the ratio between deposits used on gaming and winnings. The closer it is to 100%, the better your chances of winning will be. A 95 – 97% payout ratio on online slots would be fairly representative of the online casinos operating in South Africa today. However, the payout ratios for National Gambling Board sanctioned gambling are as follows: sports betting – 87.3%, LPMs – 90.8%, Bingo – 92.1% and casino gambling – 93.2%.
- Device support: how will you play? Your platform’s software should be compatible with your preferred device.
- Games offered: does your online casino offer the games you want to play? Is there anything unique or different that you would like to explore?
- Welcome Bonuses: a lot of online casinos offer a bonus for joining up. It’s worth looking into this kind of incentive as long as the site is reputable.
As long as there are no legal South African online casinos available to play in, using world’s most famous brands might be an option for online gamblers from SA. They include:
- Casino.com: A reputable casino with certified software, good game selection and a mobile version of the site.
- 888 Casino: Part of prestigious 888 Group and one of the longest running online casino games sites — since 1997.
- Slots heaven: Relatively new casino brand from the Gibraltar-based online casino and poker company Mansion.
- Winner Casino: Hundreds of casino games, sports betting, slots and poker — all wrapped up in a user-friendly interface.
- Omni Casino: Veteran among online casinos — is running since 1997. Thus, has trusted reputation.
Are online winnings taxable?
Winnings are not taxed on online sports betting and lottery, but a 6% tax in the form of VAT is deducted from all horse racing winnings. Since most of online gaming is illegal at time of writing, players should be cautious of depositing large winnings into their bank accounts since these can be monitored by the SA Revenue Services. The same rules are applicable to residents of South Africa who are foreign nationals.
Are gambling losses tax deductible?
You can offset these against your winnings, but in every other respect, they are not tax deductible since ‘professional gambler’ is not a recognized form of business in South Africa.
Should I provide genuine personal details when signing up?
You definitely should. Some casinos might refuse to pay out if you signed up using false information. Personal information is sensitive, so you should ensure that you only sign up with reputable casinos.
What if my bank won’t allow me to deposit money for casino credits?
In this case, you are using a casino that is not licensed by the NGB. Use an online payment platform like PayPal or Skrill to deposit and withdraw funds.
The SA National Gambling Board is cracking down on illegal online casino owners in South Africa. The result of the Piggs Peak appeal, as well as the fate of the 2014 draft legislation proposed for the regulation of online gambling, will likely be determined in 2015. However, although it is illegal to play using sites not licensed by the Board, there have been no prosecutions of online players to date.
All gambling income should be declared to SARS, and since your banking information is open to their inspection, it would be wise to ensure that such income is declared and taxed. Choose your preferred online platform wisely, particularly if you choose to gamble on sites not recognized by the NGB.