FMF urges South Africa’s Treasury to scrap proposed 20% online gambling tax
The group warns that an additional national surcharge could increase the cumulative tax burden on compliant businesses.
South Africa.- The Free Market Foundation (FMF) has formally urged South Africa’s National Treasury to withdraw a draft proposal that would impose a 20 per cent national tax on online gambling operators, arguing that the plan is unenforceable, constitutionally questionable and risks damaging the legal industry.
In its written submission to the Treasury, the FMF said the proposal to extend a uniform tax across all online gambling activity assumes the government can reliably tax offshore platforms, despite there being no enforcement mechanism or infrastructure to do so. The Foundation’s Policy Officer, Ayanda Zulu, described this assumption as “fundamentally flawed”.
The Treasury released the draft national online gambling tax discussion paper in late 2025, seeking public comment on a framework aimed at addressing the rapid growth of digital wagering and the perceived fragmentation of the current provincial tax system. The paper argues that a uniform tax could stabilise revenue and strengthen oversight of online gambling.
Under South Africa’s existing regulatory regime, gambling licences and taxes are administered primarily by nine provincial gambling boards, while the National Gambling Board provides governance and standard-setting support. The FMF contends that a centrally imposed levy would circumvent this decentralised system, undermining provincial authority and raising constitutional concerns.
The FMF also noted that legal operators already contribute through provincial gambling levies, value-added tax and corporate income tax, warning that an additional national surcharge could increase the cumulative tax burden on compliant businesses.
Industry research cited by the FMF suggests that offshore online casinos, which are not regulated under South African law, account for a significant share of online gambling activity. The Foundation said that pushing players towards unregulated platforms could reduce tax revenue and weaken consumer protections.
While acknowledging concerns about social harms associated with gambling, the FMF said policymakers should first focus on clarifying the legal and regulatory status of online casino operations within the existing framework before advancing fiscal policy changes.
The public comment period on the draft paper closes soon, and Treasury officials have yet to announce the next steps.
