Why is online gaming so popular in South Africa?
Worth over $45 billion globally, online gaming’s growing momentum within Africa is hard to overlook. By 2018, gambling in South Africa, Kenya and Nigeria will be worth around $37 billion by 2018.
The rise of online gambling in South Africa
Starting in 2008, when online gambling for real money was legalised in South Africa, the online gambling industry in the country began to flourish. Furthermore, in the same year, the tax on recreational betting and the winnings were not considered as income and therefore, were not taxed as such. One can liken the growth to the increased use of smartphones in South Africa, which helped to attract millions of players. With the option of English and Afrikaans, it became possible to play in quite a number of casinos using South African Rands (ZAR) or American Dollars.
What’s unique about South Africa’s casino market?
The casino market in South Africa was worth less than $1.5 billion in 2006, whereas in 2015 the number was slightly lower than $2 billion (a growth of 25 percent in less than 10 years). Casinos are by far the largest component of the gambling market with gross casino gambling revenues accounting for 72 percent of total gross gambling revenues in 2014. Currently, a total of 38 out of 40 possible casinos are operational in South Africa. On the 31st of October 2015, the Department of Trade and Industry gave notice of intention to increase the set number of maximum casino licenses from 40 to 41.
The most popular South African online casinos are safe and reliable and the software they use have been developed by some of the leading companies in the industry. Online casinos record high returns to player ratios and the transactions are secured while your personal data is kept safe. As of 2014 PwC put the country’s total gambling turnover at $18.77 billion, of which 82 percent, $23.73 billion, came from the 37 casinos in the country. Bingo was the fastest-growing category in 2013 with a 58.9 percent increase, followed by LPMs at 25.9 percent and sports betting at 21.3 percent.
However in terms of providing a favourable environment for customers, some casinos go as far as offering special bonuses for South African players, making them eligible for the offers that are available to other players as well.
Taxes and levies
Total gambling taxes and levies amounted to R2.5 billion in 2014, up 10.7 percent from 2013. Casinos paid R1.8 billion in provincial gambling taxes and levies or 10.4 percent of their gross gambling revenues in 2014. The estimated deemed output VAT collected on gross gambling revenues from casinos in 2014 amounted to R1.9 billion, or 11 percent of gross gambling revenue, bringing the total taxes paid by casinos on their gross gambling revenues to R3.7 billion or 21.4 percent of their gross gambling revenues.
Casinos face growing competition from other forms of legal gambling such as electronic bingo terminals, limited payout machines, sports betting outlets as well as from the increase in illegal online gambling. But despite these bumps, casino gross gambling revenue is projected to rise to R19.2 billion in 2019 from R17.2 billion in 2014, a 2.2 percent compound annual increase.
With the rising trends in mobile casino gaming revenue generated thus far, 2016 will definitely exceed $2 billion, and further growth of the industry is expected in coming years.
This article was sponsored by SeoFurnish Private Limited.