Sun International criticises Treasury's new gambling tax proposal

Sun International on Tuesday slammed a proposed new gambling proposal by Treasury saying gambling will make ​t​he industry one of the highest taxed gambling industries in the world and destabilise the legal gambling industry. 

​It also said customers will shift to offshore platforms and receive less protection, which directly contradicts the proposed regulatory intent​.

This after Treasury on Tuesday released a discussion paper titled "The Case for a National Online Gambling Tax", reveals that government is weighing the introduction of a 20% national levy on gross gambling revenue (GGR) from online betting and any future interactive gambling activities.

This would be imposed in addition to existing provincial gambling taxes, potentially lifting the combined tax burden on operators to between 26% and 29%.

The discussion document calls for public comment.

Treasury argues that the rapid expansion of online gambling, now available “anywhere, at any time”, has outpaced South Africa’s regulatory framework, creating gaps that increase the risk of problem gambling, addiction, and associated social costs.

According to the National Gambling Board’s latest data, gambling turnover soared to R1.5 trillion in 2024/25, up 31% from the R1.43trln generated during the previous financial year. Betting accounted for a staggering 75% of all wagering, driven overwhelmingly by online platforms. Of the R51.97 billion in betting GGR, 85.5% came from online betting.

However, Sun International CEO Ulrik Bengtsson said the  draft national online gambling tax proposal lacks meaningful input from the local gambling industry

Bengtsson said, "It is a great pity that Treasury did not consult with the industry or relevant regulators as adding additional taxes to gambling will make our industry one of the highest taxed gambling industries in the world. This will be over and above the VAT charge that only South Africa applies to gambling. Our offering is not a service where the price can simply be increased and passed back onto the customer. We are forced to absorb VAT charges so additional taxes, on gambling will effectively destabilise the legal gambling industry. "

He said evidence exists worldwide that increased gambling taxes will ultimately lead to a reduction, rather than an increase in tax revenue. Local operators will find it difficult to invest in new products and personnel, so customers will inevitably shift to offshore platforms. The major consequence of this shift will be that customers will receive less protection which directly contradicts the proposed regulatory intent. Offshore operators do not offer the same level of consumer safety; they pay zero taxes and invest nothing in this country.

The highly extractive offshore gambling platforms are currently able to operate well beyond South Africa’s borders. Many of these gambling sites operate from tax havens, and do not create any local employment or make any contribution to addressing responsible gambling, but they do harm the local legal industry.

There are over 2000 offshore sites identified, ndicating R55.1 billion leaving South Africa,  this is 62% of the country’s online Gross Gaming Revenue for 2023/4, according to an independent report by Yield Sec in  November 2024.

Bengtsson said, “Any notion that adding additional taxes will curb gambling is wrong. Increased taxes will only harm the local industry which makes an enormous contribution to South Africa, but it will not touch the offshore operators as their operations fall outside of South Africa’s regulations.”

Bengtsson further said that if there was more appetite to curb money pouring out of the country to offshore operators, it could significantly increase revenues for government and provincial gambling boards.

 “Unlike the offshore operators, Sun International employs 7000 people and invests R1.9 billion in salaries and wages. During 2024, we contributed just under R400 million in PAYE and about R80-million on skills development and training. Our direct contribution goes further in that we have impacted the lives of 620 000 people who benefitted from our corporate social investment spend of R28.3- million, of which R18million went into education," he said. 

For the first half of 2025, Sunbet, the group's online gambling platform, generated R65 million in gaming taxes.

Bengtsson said, “Given all that the local gambling industry does, we strongly urge National Treasury to reconsider their proposal to add further taxes on our industry, and to instead consult with industry stakeholders to develop a sustainable, predictable and stable tax and regulatory framework that will allow the industry to continue to invest in South Africa.”

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