After a critical analysis, it does appear that the South African gambling market recorded mixed reports in 2019. According to various indices, the online casino market took a large share of the industry’s revenue.
Although land-based casinos and other betting outlets attracted some patronage, it was not as huge as online gambling.
On the other hand, the National Lottery has also attracted some new bettors. As expected, these players are eager to have a taste of what the gambling industry has to offer.
Meanwhile, considering the impact of COVID-19 on the world’s economy in 2020, have the indices remained the same?
Land-Based Casinos Taxes
Before now, land-based casinos in South Africa were the only venues that offered casino games and other betting attractions. Based on their activities, the government usually levies humongous taxes on them.
Some of the reasons for such weighty tax levies include:
- Land-based casino appears to be a lucrative business
- Occupies a massive expanse of land (especially land-based casino resorts)
- Attracts a large number of customers
- Carries out other businesses within the premises
However, current indicators are pointing to the fact that land-based casinos may not be so lucrative as ten years ago. For instance, the COVID-19 restriction measures will likely reduce their customer base.
With all these indicators, should the land-based casino taxes remain high? Most economists will answer in the negative. Nonetheless, it beholds on the South African authorities to adjust the taxes levied on land-based casinos.
Why Online Gambling Is Illegal in SA?
Although it may sound hoax to some punters, online gambling in South Africa is not legal. Then how do online casinos operate in South Africa? These online casinos operate on the ground that their servers are not located in South Africa, therefore they are not regulated by their laws. To add salt to injury, these online casinos don’t pay their taxes to the South African Government.
Do you know why online casinos are licensed in other jurisdictions? For instance, Punt Casino is licensed in Curacao but allows South African players to enjoy games on their website. A Punt Casino review 2020 will offer more insight into their operations.
In 2004, the South African government was receptive to legalizing online gambling. But somehow, they were concerned about the economic impact of making gambling accessible.
Nevertheless, the National Gambling Amendment bill 2018 is likely to solve this challenge. However, this proposed law has remained a bill and has not been passed into law.
Overall, online casinos are still illegal because:
- No laws legalize their activities
- Concerns about sweeping the land-based casinos into extinction
- Government’s concerns about allowing more access to gambling
With the dwindling revenues of land-based casinos in South Africa, this fear will become a reality very soon. There is no gainsaying that land-based casinos have invested so much in the South African economy, so their interest should be protected.
Approximate Revenue to Country’s Budget after SA Online Casinos Legalization
Since all the online casinos that operate in South Africa are licensed in Europe and other countries, they pay their taxes to those countries. Imagine the vast income that will accrue to the South African government if online casinos are legalized.
If the South African government gets these revenues, the country’s budget will increase. For instance, because of the tremendous taxes imposed on online casinos in the UK, the country earns huge revenue channeled to the NHS, transport, and other sectors.
Passing the National Gambling Amendment bill of 2018 into law will allow online casinos to operate legally in South Africa.
Considering the above analysis, legalizing online casinos will, in no small measure, boost the South African economy. For instance, the United Kingdom earns £2.7 billion annually as online casino taxes. Although the UK and the South African economy are not at par, one-quarter of that amount earned will boost South Africa’s economy.
The fears of what will become of the land-based casinos cannot be waived away with a magic stick. Of course, with the rate the online casino market is growing, the land-based casino will be swallowed soon. The only remedy for land-based casinos is to adopt online gambling too. Both markets can form a synergy.
Finally, the COVID-19 pandemic has given room for online casinos to grow even faster. During the lockdown, online casinos made so much profit. If the South African government doesn’t legalize online casino gambling, its economy will miss enormous revenues.