South Africa’s proposed gambling tax could push operator burden to 40%, experts warn
The proposed 20 per cent national levy could push the tax burden on licensed gambling operators to around 40 per cent of gross gaming revenue when provincial taxes and VAT are included.
Key takeaways:
- Whitesman estimates the proposed levy could push the combined tax burden to 38-39 per cent of GGR.
- Lurie warns that the effective burden could reach approximately 40 per cent when VAT is included.
- Experts warn that higher taxes could push customers towards illegal offshore gambling platforms.
- South Africa’s gambling industry generated R84.46bn in GGR in 2025/26.
- Treasury expects to announce the final tax design in the February 2027 Budget.
South Africa.- South Africa’s proposed 20 per cent national online gambling tax has renewed concerns about the cumulative burden on licensed operators. Gambling law experts warn that, when combined with provincial taxes and VAT, the levy could take the effective burden to approximately 40 per cent of gross gaming revenue (GGR).
The latest developments follow Treasury’s proposed 20 per cent National Online Gambling Tax, which Treasury estimates could generate more than R10bn (US$610m) in additional annual revenue.
Garron Whitesman of Whitesmans Attorneys estimates that the combined burden could reach 38-39 per cent of GGR. Wayne Lurie of Lurie Inc Attorneys puts it at approximately 40 per cent when VAT is included. Lurie is also chief executive officer of the Safe and Responsible Online Gambling Association (SAROGA). Both have called for scrutiny of the proposal.
Whitesman said that licensed online betting operators already pay provincial gambling taxes, typically around 6.5 per cent of GGR, as well as VAT, which adds an effective burden of approximately 12-13 per cent.
“Together, these amount to an effective tax burden of around 18-19 per cent of GGR. National Treasury’s proposed additional 20 per cent national tax could therefore take the combined burden to approximately 38-39 per cent, before corporate income tax and other business taxes are considered,” said Whitesman, according to The Citizen.
Lurie said Treasury estimated the combined national and provincial gambling-tax burden at approximately 26-29 per cent of GGR before VAT, according to IT-Online. He said including VAT could take the effective rate to “around 40 per cent”.
Lurie argued that Treasury should assess the cumulative burden on licensed operators rather than consider the proposed national tax in isolation. He warned that the rate could have different implications for operator profitability, investment and employment.
The proposed tax would apply to GGR from online betting, including interactive gambling.
GGR represents stakes received less winnings paid out. It is an operator’s revenue before operating expenses, not its profit. Interactive gambling is not currently permitted under South Africa’s existing regulatory framework, unlike online betting offered by provincially licensed bookmakers.
The National Gambling Board’s (NGB) 2025/26 annual report highlights the scale of the regulated industry. Total GGR rose from R74.5bn (US$4.49bn) to R84.46bn (US$5.09bn), while industry-wide taxes and levies increased from R5.81bn (US$350m) to R6.45bn (US$388m). Turnover reached R1.76trn (US$106bn), up from R1.5trn (US$90.3bn). These figures cover the regulated gambling industry as a whole, not online betting alone.
Whitesman cautioned that turnover includes winnings that are repeatedly wagered and should not be confused with actual consumer spending.
The report notes that the GGR and turnover figures for Gauteng are provisional and unaudited. It also recorded 13,328 casino employees and 12,230 in bookmaking, representing approximately 25,500 jobs across the two sectors. These employment figures cover the wider industry, not online betting alone.
Could higher gambling taxes drive players to illegal offshore sites?
Lurie also warned of the risk that higher taxes could push customers towards illegal offshore platforms. He said: “If higher taxes undermine the competitiveness of licensed operators, the result may not be less gambling. Consumers could simply migrate to illegal offshore sites, where they have fewer protections and where the South African government receives no tax revenue.”
The proposed levy is not yet law. National Treasury published its discussion paper in November 2025, and the public-comment period closed in February 2026.
However, Finance Minister Enoch Godongwana said in his October 21, 2026, Medium-Term Budget Policy Statement that consultations were continuing on the tax design, its relationship with the existing regulatory framework and its implications for provinces and the regulated market. The final design is expected in the February 2027 Budget.
Lurie said the Budget announcement would not itself bring the tax into force. The proposal must be finalised, scrutinised and enacted by Parliament before taking effect. Under Section 77 of the Constitution, a national tax must be introduced as a Money Bill and follow the legislative process, including parliamentary approval and presidential assent.
The key issue for Treasury is whether the levy can raise revenue and address gambling-related harm without weakening the regulated market, affecting provincial revenue or driving consumers towards unlicensed operators.
Frequently asked questions (FAQs)
- How much could South Africa’s proposed online gambling tax cost licensed operators? Whitesman estimates that the combined burden could reach 38–39 per cent of GGR, while Lurie puts it at approximately 40 per cent when VAT is included.
- Why are gambling operators concerned about the proposed 20 per cent levy? Experts warn that adding the national tax to existing provincial taxes and VAT could weaken licensed operators’ competitiveness and push customers towards illegal offshore platforms.
- Is South Africa’s proposed national online gambling tax already law? No. Treasury is still consulting on the tax design. The proposal must go through the legislative process before it can take effect.
- When will Treasury announce the final online gambling tax design? The final design is expected to be announced in the February 2027 Budget.
