Constitutional Court rules casino ‘freeplay’ credits are taxable in South Africa
Constitutional Court confirms non-cashable casino loyalty rewards must be included in adjusted gross revenue under Western and Eastern Cape gambling laws.
South Africa.- South Africa’s Constitutional Court has ruled that non-cashable casino loyalty rewards, known as ‘freeplay’ credits, must be included in adjusted gross revenue (AGR) for gambling tax purposes under the Western Cape Gambling and Racing Act and the Eastern Cape Gambling Act.
The Western Cape Gambling and Racing Act and the Eastern Cape Gambling Act regulate casino operations, including the calculation of adjusted gross revenue for taxation. Both Acts are designed to ensure that all amounts wagered or credited in casino play, including non-cashable loyalty rewards, are properly reported and taxed.
The case involved two major casino operators, one in each province, who had sought to exclude freeplay credits from their AGR for tax purposes. The judgment, delivered on August 29, 2025, provides clarity for casinos in both provinces on how these “loyalty credits are treated for taxation, according to the Constitutional Court of South Africa, case number ZACC 18 of 2025″, published on the Southern African Legal Information Institute (SAFLII) website.
Provincial gambling boards argued that all credited amounts, including non-cashable freeplay, should be included in AGR as taxable revenue. The dispute centred on the statutory interpretation of provincial gambling acts, not constitutional issues.
Freeplay credits deemed taxable
Justice Jody Kollapen, delivering the judgment, emphasised that the case was strictly a matter of statutory interpretation affecting only the narrow interests of the parties involved.
SAFLII said: “The Court confirmed that freeplay credits are part of AGR, dismissed applications to exclude them and ordered the applicants to pay the respondents’ costs, including the costs of two counsel.”
The Court added that the case “did not present issues of broader public or constitutional significance” as the ruling applies directly to the parties involved but sets guidance for other casino operators. The Court also dismissed applications for leave to appeal.
The ruling is seen as precedent-setting for South Africa’s gambling industry, giving operators a clear framework for handling non-cashable loyalty credits. This reduces disputes over revenue reporting, ensures compliance with provincial regulations and could lead to an increase in taxable revenue for casinos and the government, making the financial implications more tangible.
By confirming that freeplay credits are taxable, the Constitutional Court has clarified a previously uncertain area of South African gambling law and ensured that casino operators accurately report revenue for taxation purposes.
