Is Online Gambling Really A Threat To South Africa's Land Industry?

Casino Association of South Africa says it is

Themba Ngobese, the chief executive of South African land gambling industry trade body Casino Association of South Africa, claimed in a statement issued Monday that despite its illegal status in the country, online gambling was growing fast and constitutes a threat to the legitimate land gambling industry.

In what appears to have been an attempt to spur government into action against the genre, Ngobese made some startling if hypothetical claims that if only 5 percent of the available gambling revenue in South Africa was going to illegal internet gambling operators, it would represent an annual loss of around R110 million in tax for government.

But the gambling executive admitted that due to the wide prevalence of illegal online betting it is almost impossible to accurately determine the tax losses.

He also made the rather tenuous and unsourced claim that an alleged 20 percent drop in punter visitations to European land casinos is due to the advent of legal online gambling in several countries, saying that if a similar trend is followed in SA, the resulting tax and job loss in the industry could be devastating.

His claims in this regard are contradicted by international experience from land casino owners, who have repeatedly noted that online gambling is a distinct genre that does not cannibalise land business (see previous InfoPowa reports).

The CASA exec said that his association has launched an awareness campaign on the negative consequences of online gambling.

"It may all seem like harmless fun to gamble online, but players are completely unprotected and operators are not registered or regulated to run a business in our country," he pointed out in the CASA statement.

Ngobese claims that the illegal online gambling industry is already having a significant effect on the gross revenue growth of the gambling industry. He claims that revenue growth from casinos and horse-racing dropped to 0.6 percent over the last year compared with 10 percent growth in 2012-13.

CASA is also worried about what it perceives as growth in illegal "backroom" online gambling activity at internet cafes and appealed to the public to report any instances that come to light.

South Africa's land gambling industry contributes SA Rands 2.2 billion annually to the government tax coffers on revenues of SAR 21.8 billion, according to National Gambling Board figures quoted by the publication Business Day this week.

South Africa has for the past decade or more flirted with the idea of legalised and licensed online gambling before the possibility was finally abandoned by government last year in a decision to let the currently illegal status stand (see previous InfoPowa reports).

Existing laws provide serious punitive measures that include fines of up to SAR 10 million or imprisonment for up to 10 years for operating or even playing at an online casino.

The South African tax authorities have warned that any South African receiving undeclared regular income from illegal gambling operating or playing will nevertheless be taxed, and if necessary it will make its own assessment of what amounts may be appropriate.

Online Casino News Courtesy of Infopowa

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