Treasury's proposed 20% online gambling tax will hit bonuses before it hits operators

South Africa's National Treasury released a draft discussing a potential 20% online gambling tax in November 2025, with public comments closing in February 2026. Among the various aspects of this proposal, the one likely to impact players the most has received little attention thus far. If the tax becomes law as drafted, the adjustments operators will likely make first won't be to their profits, but to their promotional strategies.

Currently, players compare various factors such as bonuses, wagering requirements, and payout speeds when choosing platforms. As the tax takes effect, these comparison metrics will change significantly, potentially making them more significant than they are today. The term "gross gambling revenue" refers to the amount an operator retains after paying out winnings, not the total turnover.

For instance, a player who deposits R1,000, wagers R5,000 in total, and wins R400 has contributed R600 to the operator's gross gambling revenue. The proposed tax would apply to this R600, not the R1,000 deposited or the R5,000 wagered. This distinction is crucial as it compresses the tax base before it's applied, effectively lowering the revenue that operators can generate from player activity.

The proposed tax raises legal questions given its potential to conflict with existing provincial regulations on online gambling. While the Treasury frames the tax as a means to address social harms, similar to taxes on alcohol and tobacco, the annual projected yield of R10 billion is seen as a secondary outcome. Compared to the current provincial rates of 6% to 9% on online betting and 10% to 15% on casino-style games, the national tax would raise the combined effective burden on operators' gross revenue to between 26% and 35%.

Some legal experts suggest the actual rate could be as high as 39% once all obligations are considered. This rate could significantly alter the economic landscape for operators, not just marginally. Arnold Hurt, the Responsible Gambling and Local Industry Expert at PlayCasino.co.za, South Africa's independent review platform for online casinos since 2008, has been monitoring the licensed operator market for over a decade.