This article was first published by BBrief on 4 December 2025
National Treasury’s draft proposal of a 20% national tax on the gross gambling revenue of all forms of online gambling – including online sports betting, which is legal – must be called what it is: a revenue grab that violates constitutionalism, undermines democratic practice, and punishes enterprise, all while being dressed up as a measure to reduce social harm.
This proposal comes against the backdrop of a moral crusade against interactive gambling (specifically) in South Africa, whose prevalence has seen many South Africans – particularly those who are socio-economically disadvantaged – spend their money on online operators in an effort to generate income. Notably, interactive gambling remains technically illegal in the country as the Gambling Amendment Act of 2008 was never promulgated.
Therefore, the proposal of a national tax on it constitutes an inversion of the basic rule of law logic. Instead of first attending to the question of whether a regulated interactive market is desirable, Treasury is quietly opting to chase easy revenue.
But there are far more serious issues with this proposal that warrant inspection here.
As per the National Gambling Act of 2004, gambling regulation in South Africa is effectively a provincial competence, with each of the nine provinces having its own gambling board that handles licensing, compliance, and taxation. While the national government plays a role in oversight and coordination, the provinces retain primary authority over regulatory responsibilities.
This means that a national tax is unconstitutional because its centralisation of fiscal responsibility ignores clear jurisdictional boundaries and the limits placed on the national government.
Moreover, much like what occurred in the case of the flawed Tobacco Bill, this proposal has been put forward without engaging in preliminary discussions with industry players and other relevant parties who will be affected by it. Sun International CEO Ulrik Bengtsson notes that: “It is a great pity that Treasury did not consult with the industry or relevant regulators, as adding additional taxes to gambling will make our industry one of the highest taxed gambling industries in the world. This will be over and above the VAT charge that only South Africa applies to gambling”.
Meaningful – and not procedural consultation – is a core component of democratic practice that ensures legitimacy, accountability, and genuine participation by all stakeholders. Despite comments now being open, the bypassing of preliminary engagement with some stakeholders strongly suggests that Treasury isn’t committed to authentically democratic practice, but rather box-ticking that is aimed at paving the way for its own agenda.
Arguably the most concerning aspect of this proposal is its punitive tax rate of 20%, which, as the South African Bookmakers’ Association notes, will implode the legal gambling market and trigger a surge in underground gambling.
Currently, online gambling taxes, which are paid to provincial boards, sit in the range of 6% to 9%. An additional tax of 20%, coupled with VAT and other levies, will inflate the effective tax rate for some legal operators to around 40%. This is an untenable situation that will destabilise the legal market as operators struggle to survive and find it difficult to pass on the costs to consumers.
As one can see, this proposal is a naked revenue grab that threatens the very existence of the legal gambling market, which is a vital revenue stream that is widely regarded as a far safer alternative than the technically illegal, unregulated activity of interactive gambling.
Time will tell how the broader public reacts to it, but it is encouraging to see industry players and other relevant stakeholders already pushing back. This piece takes the view that this bizarre proposal – which doesn’t even explicitly ring-fence funds for its stated objective of social harm mitigation – should not see the light of day. The legal market must be left alone, and attention should instead be directed to the question of interactive gambling that has been raised.
While interactive gambling is a vice and overindulgence has naturally placed it on the agenda, the conversation surrounding its regulation should be a robust one that considers all angles and resists moralising uniformity. The gut-wrenching stories of lost money deserve as much attention as serious questions about individual agency and the socio-economic crisis in South Africa, which is the primary driver of interactive gambling.
Having said that, Treasury’s proposal, which is both dangerous and somewhat distracting, poses a serious legal, democratic, and economic threat that should be actively resisted as the conversation surrounding interactive gambling regulation continues.
