Gamblers Winnings Confiscated in South Africa by DTI

The Department of Trade and Industry (DTI) in South Africa said that approximately $1.25 million rand won by online gamblers who were illegally gambling on non-sports games were confiscated in an ongoing effort to stop online gambling in the country.

While South Africa has legalized online sports betting in the country, other forms of online gaming, such as online slots is banned. Other gambling activities in SA are still legal. South Africa has had legal casino gambling since the early 1970s in the homeland, and the rest of the country followed suit in the mid-1990s. The country has 40 licensed casinos and a national lottery. Horse racing is also legal in South Africa.

Gambling Becomes Illegal

In 2010, the government banned all forms of online gambling in the country, even if the online servers were located outside South Africa, such as those online gambling sites located in the United Kingdom. Individuals, especially those well versed in technology, were still able to gamble online, but if they are caught, they run the risk of having their winnings (up to $10 million rand) confiscated. The potential winnings for online gaming however, makes the illegal activity attractive to some gamblers, even if they risk losing their winnings to the South African government.

In order to confiscate the winnings of illegal online gambling, the government first has to petition the South African High Court for approval. The banks cooperate with the National Gambling Board to determine where the winnings came from, how much the gamblers won, and whether the winnings were in a single day or over multiple days. The money is then transferred to the state.

The Government’s Major Concerns With Gambling

The South African government gives two reasons for keeping online gaming in the country illegal. First, the government is concerned that online gaming, where both money and cryptocurrency can be transferred between multiple countries, could be used as a money laundering scheme for criminal organizations. South Africa has had a problem with criminal activity, which only seems to be increasing, and one way to combat crime is to try and cut off criminal activities at the source. In addition, the government has expressed concern that online gaming contributes to gambling addiction. The SA government has stated that South Africans lost over 1.1 billion rand in 2014 in gambling activities.

Online Sports Betting is Still Legal

While the country does not allow online gambling, online sports betting remains legal in South Africa. South Africans can bet on a variety of games including soccer, cricket and horse racing. It is estimated that South Africans spend nearly 600 million dollars yearly on sports gambling, which represents an increase of 400 million dollars in the last eight years. Online sports betting in South Africa is expected to grow to a billion-dollar industry by 2025.

South Africa represents a handful of countries such as Morocco and Algeria who do not permit online gambling. Other nations in Africa, such as Kenya and Nigeria, allow for online gambling, as well as mobile gaming from phones or tablets. These nations have reported revenue from online gambling in the hundreds of millions of dollars.

South Africa has historically reported revenue shortfalls, and has had difficulty providing services for its citizens. If the nation considers the possibility of gambling revenue as a way to fund services, such as Kenya, Nigeria and the United Kingdom have, it may help the country grow its services for its citizens. But if South Africa decided to allow online gambling, it would also be allowing the problems that are associated with gambling and gambling addiction.

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