Home company news South Africa’s Complex Gambling Regulations and the Impact on Domestic iGaming Market

South Africa’s Complex Gambling Regulations and the Impact on Domestic iGaming Market

With iGaming operators constantly on the lookout for new markets, South Africa could potentially become the leader in the region, if not the entire continent.

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Gambling.
Gambling. Photo by Markus Spiske on Unsplash

South Africa has been recognized by many as an evolving market when it comes to gambling. However, all reports are indicating that the current level of the gambling industry within SA is not meeting the needs of the players. At least not those who are interested in playing online games.

The root cause of this problem can be found in SA’s complicated and rather confusing gambling regulations. With the country relying on laws introduced over 20 years ago, many are wondering whether it’s time to move on. Especially considering the dynamic nature of online gaming that is currently in the gray zone.

South Africa’s Clunky Gambling Regulations

The entire gambling industry in South Africa is overseen by the National Gambling Board (NBG). The organization was tasked with allowing higher instances of South African administration to overlook and regulate gambling within the country.

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NGB’s first task was to build upon the existing legislation and come up with a framework that would work for both the regulator and those interested in gambling within South Africa. As a result, the nation was introduced to the 1996 National Gambling Act.

Prior to 1996, the country’s gambling operations were governed by the 1965 Gambling Act which was about as restrictive as they get. Anything other than horse racing betting was outlawed by this document. The result of such a strict gambling act was the boom in illegal casinos that were sprouting all over certain parts of the country.

These covert gambling houses would offer slot machines and other gambling activities to players. Despite being highly illegal, South African authorities weren’t too bothered with law enforcement. The country was heading towards a national crisis and illegal casinos were left alone.

The Aftermath

As South Africa emerged from its troubles in the early ‘90s, the Lotteries and Gambling Board was tasked with putting together a report on the state of the domestic gambling market. The board found that the Gambling Act of 1965 was no longer representing the will of the people. Such a report was only stating what everyone knew already.

By the time 1995 had rolled around, there were over 2000 illegal gambling operations within the borders of South Africa. These hidden, underground casinos turned up in every part of the country as people sought refuge from the turbulence of everyday life in this country at the time.

When this report was released in 1994, it was enough to prompt the authorities to take a different stance on gambling. The idea was to make gambling and lotteries legal but heavily regulated. The country would form a National Gambling Board that would issue licenses and keep gambling providers accountable for their actions.

However, the Gambling Act of 1996 that would eventually bring regulation to the South African gambling market, has left no provisions regarding online gambling.

The Question of iGaming 

iGaming is on the rise in South Africa. Still, this activity is deemed illegal by current regulations issued by the National Gambling Board. South Africans who want to experience the thrill of modern online slots and other games have no means of doing so. At least not legally

The National Gambling Board has issued a report on the social impact of gambling in South Africa. This report from 2013 outlines the position of iGaming and the current state of affairs. Per the report, iGaming is very much alive within the country. NGB did a survey among players and found out that 44.4% of them were aware that iGaming was illegal but were still playing online.

However, it’s the remaining 55.6% of players who were much more interesting. Namely, 38.2% claimed that iGaming was perfectly legal while the remaining 17.4% wasn’t sure. The fact that such a massive number of players think that online gambling is legal indicates that the current state of gambling regulation in South Africa isn’t meeting the needs of the modern SA market.

The Dynamics of iGaming in South Africa

The metrics published in NGB’s report from 2013 indicate that iGaming is alive and well in South Africa. But how does it work considering its illegal status? As it turns out, the regulations banning online gambling are mostly focused on regulating providers. Players themselves are not subject to control or law enforcement despite the letter of the law.

Those who wish to try out online gambling often choose to do so by going to some of the established online casinos. Interestingly enough, most players are perfectly aware that should something go wrong with the payout on one of those sites, they are left to their own devices.

The National Gambling Board has done another study regarding the socio-economic impact of gambling in South Africa in 2017. This latest report was showing the progression of trends indicated in 2013. The board has found that online gambling is becoming more and more popular among most demographic groups.

One of the main reasons for this is convenience. Players who are turning to online gambling are understanding that they can play their favourite games without having to visit some of the land-based casinos. The 2017 study also outlines the emergence of internet cafes whose main purpose is to facilitate online gambling.

The Future of Gambling in South Africa

Despite more and more people turning to illegal forms of gambling, the 2017 report indicates a steadily declining occurrence of problem gambling in South Africa. Critics of the current system argue that the country and its people would be far better off if the NGB decided to legalize online gambling.

It is also apparent that doing so would have a potentially significant impact on the economy of the country. With iGaming operators constantly on the lookout for new markets, South Africa could potentially become the leader in the region, if not the entire continent.

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