Industry Alarm as Proposed 20% Gambling Tax Threatens South African Bookmakers

The SA Bookmakers Association warns a new 20% tax could push the total burden to 39%, potentially forcing closures and fueling illegal offshore gambling sites.

By: AXL Media

Published: Mar 7, 2026, 4:35 AM EST

Source: BusinessTech

The True Cost of the Proposed Levy

The SA Bookmakers Association, led by CEO Sean Coleman, argues that the headline figure of a 20% tax is significantly understated when viewed in context with existing obligations. Currently, licensed bookmakers operate under a complex multi-tiered tax system. This includes a 15% Value Added Tax (VAT) on supplies—which nets out to roughly 11% to 12% after expense deductions—and a 6.5% provincial gambling tax paid to regional licensing authorities. By layering a new 20% levy on top of these established costs, the industry predicts a total effective tax burden of approximately 39%, a figure that many small to medium-sized operators cannot absorb.

Fueling the Rise of Illegal Offshore Markets

A primary concern for the industry is that increased taxation on legal entities will inadvertently subsidize illegal online gambling. Data suggests that nearly 2,900 illegal operators are currently targeting South African citizens from "pseudo-licensing" jurisdictions such as the Philippines, Malta, and Curaçao. These offshore entities avoid local taxes and regulatory compliance, allowing them to offer more competitive odds. According to a late 2024 study, these illegal sites already control an estimated 62% of the domestic online market, resulting in over R50 billion flowing out of the South African economy annually.

Economic Consequences and Potential Business Closures

The association warns that the proposed tax could be the "final nail in the coffin" for many bookmakers already struggling with thin margins and high operational costs. Unlike illegal platforms, local bookmakers contribute to the national fiscus and provide employment within the country. A mass closure of these businesses would not only result in job losses but could also lead to a net decrease in government revenue as consumers migrate to untaxed, unregulated foreign sites. The industry maintains that the tax is counterproductive to its intended goal of boosting state coffers.