Taxing the Algorithm: Why South Africa’s Proposed Online Gambling Tax Matters, and What It’s Missing

The Campaign On Digital Ethics (CODE) has submitted formal comments on National Treasury’s 2025 Discussion Paper: The Case for a National Online Gambling Tax. We broadly support the interventions proposed, but argue that it must go further.

Roulette wheels are no longer only in casinos, they're also in our pockets. With a few taps on a smartphone, people can bet on sport, spin digital slots, or chase “boosted” accumulators on apps that never close. Elements that once slowed gamblers down, such as travel, opening hours, or social scrutiny – are no longer factors. What remains is a seamless, data‑driven system optimised to keep people playing.

In its discussion paper, the National Treasury has proposed a 20 per cent tax on online gambling, which is a critical attempt to catch up with the current reality. CODE supports the introduction of this tax on gross gambling revenue (GGR) for online and interactive gambling. The rapid growth of digital gambling in South Africa has outpaced the regulatory frameworks meant to protect users, and thus, a national intervention is necessary, overdue, and proportionate to the scale of harm.

But taxation is only part of the solution.

CODE_Submission_NationalGamblingTax.pdf

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Online gambling is a digital rights issue

CODE’s mandate is tech accountability. We monitor the same design practices in gambling platforms that we see across the broader digital economy: algorithmic personalisation, engagement maximisation, behavioural targeting, and the exploitation of psychological vulnerabilities at scale. The gambling industry is not unique in using these tools, but it is among the most consequential contexts in which they operate, because the product being optimised for engagement is directly linked to financial ruin and can contribute to mental illness.

The proposed tax is an important step. But framing it purely as a fiscal or health intervention risks missing the broader regulatory challenge that the technology has created a new category of harm that existing frameworks were not built to address. The harm is not that people gamble, it is that these platforms are built to ensure that they cannot stop.

South Africa’s online gambling market is largely unregulated in its digital conduct dimensions. The interactive gambling provisions of the National Gambling Amendment Act 2008 were never brought into effect. That law, had it been implemented, would have introduced national licensing of interactive gambling and expanded the regulatory toolkit. More than fifteen years later, the gap remains, while the market has grown exponentially.

What we are asking for

CODE’s submission asks National Treasury to:

• Include explicit declaratory language in the tax legislation to prevent illegal operators from invoking tax compliance as evidence of authorisation.

• Commission a market sizing study of the offshore and unlicensed online gambling sector before the final rate is legislated, and explicitly address cryptocurrency payment channels in the enforcement framework.

• Model the combined effective rates across gambling modes to ensure the national tax does not create unintended distortions between online casino products and sports betting.

• Designate a defined portion of national gambling tax revenue for research, education, and treatment of gambling harm, to give the stated primary objective concrete legislative expression.

• Recommend in its final policy paper that the DTIC and the NGB initiate a dedicated process to develop minimum platform conduct standards for digital gambling operators serving South African users.

The bottom line

South Africa’s online gambling industry, where the annual value of bets placed in 2024/2025 was over R1,5 trillion, has exploded and grown faster than our ability to regulate it. Tax, however, is a blunt instrument. It can make gambling more expensive, but it cannot make it less addictive. It can raise revenue for harm reduction, but it cannot, by itself, stop platforms from algorithmically identifying vulnerable users and targeting them with inducements designed to deepen their engagement.

The missing half of this intervention is platform conduct regulation, which includes minimum design standards that apply to every operator serving South African users, regardless of where they are licensed. CODE is committed to supporting that process, and we call on the Department of Trade, Industry and Competition and the National Gambling Board to initiate it without further delay.