South Africa Lawmaker Proposes Sin Tax as Gambling Surges

South African lawmakers have proposed a “sin tax” on gambling as the industry surges. Politicians have also expressed concern about the fact that many people in the country gamble in order to deal with the cost of living and not for fun.

African Gambling Grows But So Does Harm

At first glance, the South African gambling industry’s figures look impressive. With ZAR 1.1 trillion ($59.85 billion) wagered in FY 2023/2024 alone, the industry recorded a 40.2% increase in the amount of money South Africans have bet. In the meantime, the gross gambling revenue increased to ZAR 59.3 billion ($3.2 billion), up 25.7% year-on-year.

Unfortunately, these figures do not necessarily reflect a healthy ecosystem. According to a recent study by Bettabets, a staggering 70% of gamblers play in hopes of winning money to meet the rising costs of living. Of all winners, 27% said they spent their winnings right away.

And, of course, some of the people whoend up in this cycle of wagering to supplement their wages develop gambling problems.

As the industry expanded and harm became more pronounced, lawmakers proposed an additional tax on gambling products.

The Current Laws Are Not Suited for the Modern Industry

In an interview with BusinessTech, Rise Mzansi MP Makashule Gana said that he considers the country’s current gambling laws to be “inadequate.” According to him, this dated ruleset fails to address the dangers posed by the modern industry.

Gana, who was very concerned about the rising addiction rates, suggested that, among other things, South Africa should implement a “sin tax” on real-money games of chance, mirroring the taxes the tobacco and alcohol industries have to pay.

Like other regulated markets, South Africa would use the proceeds of this tax to fund safer gambling initiatives and gambling harm treatment.

In addition to that, the MP proposed harmonizing the Remote Gambling Bill and the National Gambling Amendment Bill in order to modernize the country’s regulatory framework. He is also considering a revenue-sharing model between provinces, especially when it comes to online gambling.

Ads Are a Serious Problem, Gana Says

One of Gana’s primary concerns, however, was operators’ aggressive marketing. He argued that the inescapable gambling ads and the prominence of gambling influencers and content creators are providing players with a false impression that winning is easy and common.

Because of that, he proposed stricter regulations for gambling ads, especially ones aired on TV or social media. Gana was firm that ads should be restricted to certain hours and must not target vulnerable audiences.

In addition to that, he proposed hosting regular awareness campaigns and educating the public about the risks of gambling and the dangers of addiction.