Proposed 20% online gambling tax will only drive gamblers to illegal operators says Responsible Gambling Foundation

March 2026, Johannesburg – An online gambling tax will not have the desired effect of curbing the scourge of problem gambling, in fact it will only lead to all gamblers, including recreational gamblers, seeking out illegal platforms. 

This is the view expressed by the South African Responsible Gambling Foundation in its submission to National Treasury regarding a discussion paper calling for a 20% tax on online gambling. 

The Foundation warns that a blanket tax approach assumes rational behaviour from individuals with gambling disorders. Drawing on more than 20 years of treatment data, it notes that addiction is driven by compulsion rather than price sensitivity, and that higher costs are unlikely to deter problem gamblers while increasing financial distress for affected individuals and families. 

Executive Director of the South African Responsible Gambling Foundation, Sibongile Simelane-Quntana, says, “Our experience shows clearly that gambling addiction has no rationality. Increasing the cost of gambling does not treat addiction. It risks deepening harm while failing to address the root causes of problem gambling.” 

The Foundation is also concerned that higher taxes could push both recreational and problem gamblers towards illegal and unregulated online platforms, particularly while online gambling, also known as interactive gambling, remains unlawful and enforcement capacity is strained. International experience shows that poorly timed taxation can undermine consumer protection and erode the tax revenue base as gamblers flee to illegal platforms. 

“When a blanket gambling tax is imposed; it does not distinguish between those at risk and those who gamble within their means. Effectively, this approach penalises responsible behaviour while failing to target the root causes of gambling addiction.” 

Simelane-Quntana added, “South Africa must first close regulatory gaps, strengthen enforcement against illegal gambling, and ensure that all operators contribute fairly to harm reduction. A mandatory responsible gambling levy and the regulation of interactive gambling would be far more effective than relying on taxation to solve the public health challenge of gambling disorder.” 

The submission calls for a coordinated approach between National Treasury and the Department of Trade, Industry and Competition, focused on regulation, consumer protection, sustainable funding for treatment and research, and strong action against illegal gambling operations. 

Putting the horse before the cart 

Before considering taxation, lawmakers should urgently address the lack of regulation and licensing of interactive gambling. This would enable authorities to monitor operators, enforce responsible gambling standards, and ensure compliance with tax and legal obligations whilst also safeguarding the revenue base of the industry from illicit and unregulated operators.  

“Licensing online gambling operators not only channels activity into a regulated space but also provides a framework for harm minimisation and oversight. Additionally, the introduction of a mandatory responsible gambling levy through the 0.1% of the Gross gambling Revenue on all licensed operators could be considered.  

“This levy, which may be similar to the statutory levy under the UK’s Gambling Act 2005, would fund National Responsible Gambling Programme’ harm reduction and minimisation initiatives, including research, public education awareness, as well as treatment for gambling addiction,” concludes Simelane-Qutana. 

About The South African Responsible Gambling Foundation 

The South African Responsible Gambling Foundation (SARGF) is a non-profit company dedicated to preventing and treating disordered and addictive gambling while promoting responsible gaming practices in South Africa. The Foundation’s primary objectives are: 

• Education: Raising public awareness about the dangers of gambling addiction and promoting responsible gambling habits.   

• Counselling: Providing support and counselling to individuals and families affected by gambling addiction.   

• Monitoring: Evaluating gambling trends to influence policy and advocate for effective treatment of gambling addiction.   

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