Should South Africa Legalise Online Gambling?

It can certainly be said that the economic reasons for legalizing online casinos are compelling.

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ONLINE GAMBLING

There’s no doubt about it: recent years have been quite turbulent for South Africa, both politically and economically. But now, with President Ramaphosa at the helm and the first green shoots of recovery starting to appear, this could be the perfect time to see what contribution online gambling – which has brought economic prosperity to many countries across the world – could make.

Let’s put the economic considerations into context. The country may be home to 75% of the African continent’s largest companies and make much of its money through mining of gold, diamonds and other minerals – but this hasn’t been enough to insulate it from wider economic issues.

For example, the combination of lower prices for the country’s exports, a fall in demand from China and bad harvests affecting the agricultural sector, GDP has shown only moderate growth of 0.7% in 2018. Unemployment has also been a concern, particularly in the public sector where a contraction in jobs has had a serious effect.

Plus there’s the question of public debt, which is over 50% of GDP and 2017 saw the highest rate since 2009 at 4.3%. National debt is projected to increase to by around a trillion rand in the next three years to nearly 66% of the GDP. There’s also the troubling prospect of inflation – driven by high oil prices and the comparative weakness of the rand against other leading currencies. As a result, it is currently running about 5%, approaching the notional cap of 6% above which it shouldn’t be allowed to rise.

An improving economic picture

However, it’s not all doom and gloom and there are signs that the situation may be improving, if a little slowly. For example, the GDP is predicted to grow by 1.8% in 2020, a marked advance on the 2018 figure of 0.7%. Inflation, too, is expected to plateau this year followed by a gradual decline driven by a strengthening economy and decreasing unemployment levels.

This said, it’s certainly an economy that could definitely benefit from a boost and there are rumblings that this is precisely what legalizing online gambling could very well achieve.

Naturally, there are both those in favour and those who are strongly opposed to the relaxing of the law and we can expect the two factions go head to head in the coming months and years.

Untapped potential: the gambling industry in South Africa

Gambling has a huge market in South Africa. Figures show that a huge majority of South Africans enjoy playing the lottery. As many as 96% of people have bought a ticket in the past, while over 25% of the population enjoy playing slots games. Then there are the traditional pursuits of horse racing and casinos – both of which were recently legalised by the government and now make valuable additions to the public purse.

There are over 40 licensed land-based casinos in the country, including Rio Casino Resort, which over 266,000 square feet is the fifth largest in the world.

Casino gaming was legalised in the 1990s, when gambling licences were distributed evenly among the provinces. However, with online gambling emerging across the world and disruption the dominance of land-based casinos, many are calling for South Africa to review its gaming laws, which currently prohibit online gambling – despite the fact it’s flourishing across the world.

To take the UK as an example, in the 20 years since online gambling has been legalised it has grown to be the biggest single sector, raising £5.4 billion of the £14.4 billion total. The benefits of this to the country are huge. While the government is able to make huge amounts in the gambling revenue, to reinvest in schools, hospitals and transport, it’s also a good employer – bringing jobs to the economy.

As the figures suggest, in the two decades since the activity was legalized it has become a firm favourite with UK citizens from all works of life. This has been fuelled by the efforts of leading online casinos to create playing experiences that try to emulate the excitement of the real casino experience.

They’ve achieved this through constantly introducing new slots games, variations on popular table games and even the live casino. The latter is a live-streamed version with actual dealers and games played in real time. The steady advance of technology has also played an important role in their success, especially the increasing sophistication of mobile devices. So all of the best sites have been optimised for mobile play 24/7 from anywhere with an internet connection.

Understandably, online operators have to offer a spectacular service to customers, and have a unique look and feel to stand out in this super-competitive market. One operator where you’ll find a great selection of games, and a striking look and feel, is here at online 777 casino.

Online gambling: the law in South Africa as it stands

Looking at the situation from a legal perspective, a couple of pieces of legislation from the last decade have given cause for pessimism to prevail about the future of online gambling in South Africa. In 2008 The National Gambling Amendment Act was introduced with the aim of legalizing interactive gambling. This proved controversial – so it wasn’t until August 2018 until it was finally passed. To get it through parliament it had to be tightened up considerably both banning dog racing and online gambling of any kind.

This was just confirming laws that had been introduced in 2010 which made it illegal to bet online, with the exceptions of horse racing and sports betting. The seriousness of this ruling was underlined by the fact that there is 10 million rand fines for breaking the law.

This, however, doesn’t mean that people aren’t prepared to flout the ban to enjoy all the pleasures of playing their favourite games online. It’s been estimated that the equivalent of 5% of national gambling spend goes on this illegal activity – a figure that amounts to around 1.5 billion rand each year. To put this into perspective, the tax revenue that this would generate could pay for a third of all of the books that the South African school system has to buy for its pupils each year.

Summary

It can certainly be said that the economic reasons for legalizing online casinos are compelling. However, governmental and commercial opposition seems to remain strong. The 2018 Amendment Act also gives little comfort for those looking for a change in the law.

But things can change. For example, last year saw the ruling by America’s Supreme Court legalizing sports betting despite strong opposition from the sports leagues themselves. So perhaps, if the momentum is allowed to build in South Africa, a similar turn around could be possible, despite how unlikely it may currently seem.

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