South Africa’s National Online Gambling Tax Remains Undecided: Finance Minister Says the Final Design Will Be Announced in the February 2027 Budget—How Much Could a 20% Rate Raise?

File photo: exterior detail of South Africa’s Parliament buildings in Cape Town, 2 March 2024. Institutional context for the budget-policy report; not a photograph of the October 2026 speech or its venue. Photo: Dietmar Rabich / Wikimedia Commons, CC BY-SA 4.0. Image title: Cape Town (ZA), Parliament of South Africa -- 2024 -- 3484. Display cropped to fit; image remains under CC BY-SA 4.0. Image source.

South African Finance Minister Enoch Godongwana delivered the Medium-Term Budget Policy Statement (MTBPS) to Parliament on October 21, using four sentences to outline progress on the national online gambling tax: the Treasury published a discussion paper last year; the submissions received “broadly agree on the need to address the growth of online gambling and its harms”; consultations are continuing on the tax design, its alignment with the existing regulatory framework, and its effects on provinces and the existing licensed market; and “the final design will be announced in the February 2027 Budget.”

The statement gave neither a tax rate nor an effective date. The frequently cited 20% comes from the discussion paper published by the Treasury on November 25, 2025; it is not a finalized rate.

What the Discussion Paper Proposes

According to the discussion paper, the Treasury proposes a national tax of 20% on the gross gambling revenue (GGR, meaning stakes minus payouts) of online betting, including “interactive gambling”—online casino-type games—which remains illegal in South Africa. This would be levied on top of existing provincial taxes and levies. The paper’s own calculation puts the combined rate at 26% to 29%. It states that, “at current levels of gross gambling revenue,” the tax could generate “more than R10 billion” in additional annual revenue for the central government, while stressing that its primary purpose is not to raise revenue but to curb problem gambling.

The South African Revenue Service (SARS) would collect the tax. Local online gambling operators would have to register with SARS and provide the same types of information they currently report to provincial gambling boards. The paper also states that if local operators engage in interactive gambling, which remains illegal, the resulting revenue would still be subject to this tax.

Running the Numbers Again: Where Does R10 Billion Come From?

The discussion paper cites figures for the 2024/25 financial year: national gross gambling revenue of R74.5 billion, of which betting accounted for R51.97 billion, with online betting representing more than 85.5% of betting GGR.

On those figures, online betting GGR would be approximately R44.4 billion; multiplying that by 20% gives about R8.9 billion, slightly below “more than R10 billion.” To reach R10 billion, the taxable base would have to be at least R50 billion. That means the Treasury’s estimate either includes other online revenue, such as interactive gambling, or assumes a higher base. The discussion paper does not show how this figure was calculated, a point that remains to be explained in February’s formal proposal.

Now compare this with existing tax receipts. The figures cited in the paper show that the provinces collect about R4.8 billion a year in gambling taxes and levies combined, with online betting accounting for approximately 39 percentage points, or about R1.9 billion. If the new tax brings in R10 billion, this one levy alone would be more than twice the country’s current total gambling tax and levy revenue, and roughly five times the existing provincial tax burden on online betting.

Comparison With Other Markets

Figure 5 in the discussion paper lists online gambling tax rates in approximately 50 jurisdictions, stating that 11 other jurisdictions also levy 20% and 16 impose higher rates. The chart shows rates above 20% in developing markets including the Philippines, Mexico, India, and Tanzania; Kenya, Brazil, and Peru are at roughly 10% to 15%, while Nigeria is lower. At a combined rate of 26% to 29%, South Africa would fall into the higher-tax group in the chart.

The industry’s calculation is higher still. Sean Coleman, chief executive of the South African Bookmakers’ Association (SABA), said in March this year that, including value-added tax, adding another 20% to the existing tax burden would bring the effective rate to 38%–39% of GGR. This is an industry association’s estimate; the Treasury has not adopted that calculation.

Where the Disagreements Lie

According to Godongwana’s earlier summary in a written parliamentary reply, differences in public submissions include whether the rate is too high or too low; the social and public-health effects of online gambling; whether a heavier tax burden would drive players toward illegal or offshore markets; legal and constitutional issues concerning the sequence of regulation and provincial powers; and the feasibility of enforcement and tax administration. Industry associations have also argued that this tax would be unconstitutional. The public consultation closed on February 27, 2026.

The provinces are a key variable. Under South Africa’s current system, gambling is regulated and taxed through provincial legislation, and the provinces have limited own-source revenue. A national tax and provincial taxes would share the same tax base. Godongwana explicitly identified how revenue would be allocated, and whether provincial revenue would be affected, as matters still under consultation in his October 21 statement.

What Comes Next

For licensed operators, the MTBPS has not changed any existing obligations. The next milestone is the February 2027 national budget. Four things will need watching then: whether the rate remains 20%, whether the tax base includes interactive gambling, the effective date, and how revenue will be shared with the provinces.

Sources

Original source document: Page 18 of the South African National Treasury’s 2025 discussion paper, “The Case for a National Online Gambling Tax”: a comparison of online gambling tax rates across countries (as a percentage of gross gambling revenue). Document attribution: South African National Treasury.

Full text of Finance Minister Godongwana’s Medium-Term Budget Policy Statement speech (October 21, 2026): https://www.gov.za/news/speeches/minister-enoch-godongwana-medium-term-budget-policy-statement-2026-21-oct-2026

South African National Treasury discussion paper, “The Case for a National Online Gambling Tax” (November 2025): https://www.treasury.gov.za/comm_media/press/2025/Discussion%20Paper%20-%20National%20Gambling%20Tax.pdf

Treasury media statement announcing the discussion paper (November 25, 2025): https://www.treasury.gov.za/comm_media/press/2025/2025112501%20Media%20statement%20-%20Draft%20national%20online%20gambling%20tax%20discussion%20paper%20for%20public%20comment.pdf

Full 2026 Medium-Term Budget Policy Statement: https://www.treasury.gov.za/MediumTermBudget/Medium%20Term%20Budget%20Policy%20Statement%20Full%20document.pdf

Themes of public submissions, the consultation deadline, and SABA’s estimate, based on media reports: https://businessnewssouthafrica.co.za/regulatory-policy/online-gambling-tax-consultation-final-design-february-2027-budget/ ; https://igamingfuture.com/igfea26-east-africas-betting-tax-dilemma-can-regulators-protect-players-without-stifling-growth/