How Much Is The South African Gambling Market Worth?
Published on 11/12/17
South Africa’s gambling revenues are projected to rise to R30 billion in 2019, according to a new report. The South African gambling industry – including casinos, sports betting, the National Lottery, limited payout machines and bingo – achieved gross gambling revenue of R26.3bn in 2016.
The six casino operators employ 24,300 people, while the industry as a whole supports more than 64,000 jobs, including non-gambling services, such as catering and hospitality. There are more than 11,200 limited payout machines and 400 South African bookmaker outlets. Casino revenues account for 72% of the total gross gambling revenues.
Horse racing remains the dominant component of the sports betting market, although the football sector received a sizeable boost as a result of the FIFA World Cup in Brazil in 2014, so it’s anticipated the same boost will happen in 2018 for the FIFA World Cup in Russia. An increase in sports betting of 36.6% is forecast for 2018, related solely to the football tournament, followed by a rather more modest 1.8% increase in 2019.
Sports betting as a whole is projected to increase at a rate of 12.5% per year, taking the total gross revenue to R2.9 billion by 2019.
The National Lottery has consistently been the slowest-growing category in the gambling market, with less than 1% growth annually. Gambling revenue from the National Lottery is projected to increase to R2.33 billion in 2019. However, this represents only a small rise, considering the lottery’s gambling revenue was R2.28 billion in 2014, so the rise over a four-year period is relatively slim.
Bingo is expected to become the fastest-growing sector, with a projected increase of 19% and a gross gambling revenue of R2.7 billion forecast for 2019.
The sector paid R2.8 billion in taxes and levies in 2016 in a highly-regulated industry, which is governed by nine provincial gambling regulators, who issue casino, limited payout machine and bookmaker licences. Local gambling authorities are governed by the National Gambling Board and the Department of Trade and Industry. South Africa’s National Gambling Policy sets the criteria for the future of the industry.
However, despite the stringent laws on gambling, including up to 10 years in prison and fines of R10 million, illegal gambling activities and unlicensed venues remain a problem. Figures from the Casino Association of South Africa have revealed around R125 million in potential gambling taxes and levies was lost to illegal online gambling in 2015.
A study of the gaming industry, entitled ‘Gambling Outlook for South Africa: 2016 to 2020’, carried out by Price Waterhouse Coopers, revealed gambling revenues had improved in South Africa in recent years, describing it as a “vibrant and exciting” sector.
However, the study cites figures released by the National Gambling Board, estimating that 17.5% of the gambling population engages in illegal gambling activities. Despite the losses to illegal gambling, PWC predicts taxes and levies will increase by 6.1% to R3.5 billion by 2020.