There’s been a lot of talk this week about the government's proposal to introduce a national 20% tax on online gambling. The news spread quickly, but most articles stopped at the headline. Very few explained how the tax would actually be calculated, who pays it, how it connects to existing provincial taxes, and what this means for everyday South Africans.

This guide breaks everything down in plain language, with simple examples and real numbers, so you can clearly understand what the proposal is about and how it might impact online betting going forward.

What exactly is being taxed?

The 20% tax does not apply to your personal winnings. Government is not planning to take 20% of your payout if you win a bet. The tax applies to something called gross gambling revenue. This is the amount an operator keeps after paying out all winning bets.

Think of it this way:

• Every bet placed brings money in.
• Every winning payout sends money out.
• Whatever remains in the middle is the operator’s actual income.

The tax applies to that middle portion.

A simple example

This R1,600 is paid by the operator, not by players directly. However, operators will change how they structure odds and payouts to make up the difference.

How this sits alongside existing provincial taxes

Online bookmakers and casinos already pay provincial gambling taxes. These vary by province, but they generally fall between:

• 6%–9% for online betting.
• 10%–15% for casinos and other gambling formats.

The proposed 20% national tax would be added on top. An operator currently paying 8% provincially would end up paying around 28% in total.

Current vs proposed combined taxes

This is a major increase, and operators will need to adjust how they run their platforms to handle the higher tax burden.

How operators are likely to absorb the tax

When tax rises, operators have a limited number of ways to protect their margins. These changes happen quietly in the background and are usually spread across many small adjustments rather than one dramatic shift.

1. Slightly tighter odds

A small change in odds can have a noticeable effect over time.

2. Lower return-to-player percentages on slots

3. Fewer or smaller bonuses

• Deposit match offers.
• Cashback rewards.
• Free spins.
• Boosted odds.
• Risk-free bets.
• Multi-bet insurance.

Operators reduce bonus costs long before touching core odds.

How different types of gamblers might feel the impact

Effects differ depending on how often a person gambles.

Occasional bettors
Very small change.

Regular sports bettors
Reduced odds and fewer bonuses add up over time.

High-frequency players
Lower RTP and weaker bonuses mean deposits do not last as long.

What about offshore gambling?

Some players may shift to offshore platforms that:

• don’t pay tax.
• offer bigger bonuses.
• require little verification.
• accept crypto.
• operate outside SA law.

Enforcement is difficult, so the tax becomes less effective if too many players move offshore.

Why this proposal is happening

Online gambling has grown fast, driving more financial stress, impulsive betting, hidden household losses, and addiction-related behaviour. Treasury wants a tax model that reflects digital gambling and funds related social harm.

What this means for the average South African

The bottom line

The proposed 20% national tax aims to modernise gambling oversight and ensure operators contribute more to social costs. High-frequency bettors will feel the change most. The final impact depends on implementation and whether players stay on regulated platforms.