New gambling figures put National Treasury’s proposed 20% tax under scrutiny

The National Gambling Board’s (NGB) latest annual report highlights the substantial economic contribution of South Africa’s licensed gambling industry, raising questions about the potential impact of National Treasury’s proposed additional 20% online gambling tax on jobs, provincial revenue and the viability of licensed operators.

According to gambling law expert Garron Whitesman of Whitesmans Attorneys, the new figures underscore the need for the government to show that the proposed tax will achieve its stated objectives without undermining the regulated industry or driving consumers to illegal gambling platforms.

“The NGB’s own figures show that South Africa has a substantial, growing and regulated gambling industry that contributes billions in taxes and supports thousands of jobs. The government must demonstrate that any additional tax will achieve its objectives without putting those contributions at risk,” said Whitesman.

Gambling figures

According to Whitesman, the NGB’s 2025-26 annual report, tabled in October, shows that gross gambling revenue (GGR) increased from R74.5 billion to R84.46 billion over the past financial year, while provincial gambling taxes rose from R5.8 billion to R6.44 billion.

Total gambling turnover reached approximately R1.76 trillion, up from R1.5 trillion the previous year.

However, he cautioned that turnover represents the total value of wagers, including winnings repeatedly bet, and should not be confused with actual consumer spending. GGR, which represents wagers less winnings paid out, is the industry’s revenue before taxes and operating expenses.

“Licensed online betting operators already pay provincial gambling taxes, typically around 6.5% of GGR, as well as VAT, which adds an effective burden of approximately 12-13%.

“Together, these amount to an effective tax burden of around 18-19% of GGR. National Treasury’s proposed additional 20% national tax could therefore take the combined burden to approximately 38-39%, before corporate income tax and other business taxes are considered,” he said.

Contribution by gambling

Whitesman noted that there are 13 328 people employed in casinos and 12 230 in bookmaking, representing approximately 25 500 direct jobs across these two sectors.

This excludes the wider network of technology, payments, marketing, compliance and other businesses supporting the industry.

The figures also reveal a continuing shift towards betting and bookmaking, which have driven much of the industry’s recent growth, while revenue from casinos, bingo and limited payout machines has remained relatively flat.

Tax contribution

“The industry already makes a substantial tax contribution. Increasing the effective burden to almost 40% of gambling revenue could have serious consequences for investment, employment and the competitiveness of licensed operators, as we have seen in both the Netherlands and United Kingdom after the imposition of extraordinary tax levels,” said Whitesman.

“Government needs to demonstrate that the additional tax will deliver its intended benefits without undermining the existing tax base.”

The NGB report also provides important information about the industry’s contribution to responsible gambling and the demand for treatment services.

It records approximately R57.4 million in contributions to the National Responsible Gambling Foundation (NRGF), which provides free assistance to people experiencing gambling-related problems.

While the NRGF’s toll-free helpline received approximately 1.26 million calls during the year, a significant proportion related to operational queries. Of the 83 541 calls received by its counselling line, approximately 5 443 were classified as treatment-related. The Foundation treated 3 541 people during the year.

Gambling consequences

Whitesman stressed that problem gambling can have devastating financial and social consequences for those affected by it and requires effective prevention, treatment and consumer protection measures.

However, he cautioned against treating gambling participation, helpline call volumes and the prevalence of gambling-related harm as interchangeable measures.

“Licensed operators have long had responsible gambling measures in place, including player protection tools, public education and access to counselling and treatment, and continue to meaningfully strengthen these measures,” he said.

Whitesman argued that while fair taxation is an important part of a properly regulated gambling industry, National Treasury’s proposed additional 20% national tax raises serious economic and legal questions that it has yet to adequately address.

“The proposal is intended to generate additional revenue and reduce gambling-related harm, but he questions whether sufficient evidence has been presented to demonstrate that either objective will be achieved.”

Risk of higher taxes

Whitesman said of particular concern is the risk that higher taxes could make licensed operators less competitive, pushing consumers towards illegal offshore gambling platforms that pay no South African gambling taxes and operate beyond the country’s regulatory and consumer protection framework.

“If higher taxes push consumers into the illegal market, government risks undermining the very regulatory system designed to protect them. It could also erode existing provincial tax revenues and threaten jobs and investment.”

He added that the constitutional and statutory basis for an additional national tax requires careful scrutiny, particularly given South Africa’s existing provincial gambling taxation and licensing framework.