Online gambling is a popular pastime enjoyed by many South Africans. But, the sector is also highly regulated. This country is one of the biggest online gambling markets in Africa. Yet South Africa’s gambling laws are still quite complicated.
The gambling sector in South Africa is regulated by two authorities. The national government and provincial regulators both have a say on gambling matters. Online sports betting enjoys relatively relaxed rules. But casino gaming is a lot more complicated. The rules also tend to vary from one province to the other. In this article, we will explore the basics of South Africa’s online gambling. This guide will explain how the law works, who is in charge and how to get a license.
Legal Status of Online Gambling in South Africa
Before we go into the specifics of the law, we need to clarify the legality of online gambling in South Africa.
Generally, online sports betting is legal in South Africa. Operators only need to get a valid national and provincial license. This permits them to provide online bookmaker services to South African punters. But, other forms of online gambling are generally not legalized in South Africa. This means online casino gaming is considered illegal in South Africa according to the national law.
Most provinces in South Africa don’t issue licenses to online casino operators. However, some provinces have a more progressive stance to casino gaming. These provinces don’t issue online casino licenses as well. But they interpret existing laws in a broader sense. This allows sports betting operators in their province to legally offer casino-style games online.
Online Gambling in South Africa – Who is in Charge?
In South Africa, gambling is controlled by a dual regulatory system. The national law sets the general framework for the industry. But provincial authorities are in charge of implementing the law. They issue licenses, check operators and enforce gambling laws.
The main law that controls South Africa’s gambling industry is the National Gambling Act of 2004. This law defines the gambling activities that are considered legal in the country. It also prohibits unlicensed activities and includes regulations that licensed operators must follow. Additionally, since the industry runs on a dual system, each province also has its own unique laws.
According to the National Gambling Act of 2004, the main body in charge of gambling in South Africa is the National Gambling Board (NGB). This is the country’s number one regulatory authority. The NGB ensures compliance with the law. It also monitors operators to ensure fair practices and consumer protection.
In addition to the NGB, each province in South Africa has its own gambling board. The provincial authorities issue licenses and also monitor operators in their province. Below is a list of all nine provincial authorities in South Africa:
- Western Cape Gambling and Racing Board
- Gauteng Gambling Board
- Northern Cape Gambling and Liquor Board
- North West Gambling Board
- Mpumalanga Economic Regulator
- Limpopo Gambling Board
- KwaZulu-Natal Gaming and Betting Board
- Free State Gambling, Liquor and Tourism Authority
- Eastern Cape Gambling and Betting Board
How to Get a Gambling License in South Africa?
South Africa runs a highly regulated online gambling market. Operators are not allowed to offer gambling services except with a valid license. The provincial regulator issues both national and provincial licenses. A national license obtained in one province, allows an operator to offer their services anywhere in South Africa.
Overall, the process of obtaining a license is the same across all provinces. But, the gambling activities that are permitted tend to vary from place to place. It all depends on how each province chooses to interpret or apply the national law. The steps below show the general process for obtaining an online gambling license in South Africa.
Step one – Submitting an Application
To get an online gambling license in South Africa, operators must submit an application to a provincial authority. Things to include in an application include:
- Detailed business plan
- Evidence of financial stability
- Documents showing ownership and management structure
- Description of the proposed gambling platform
- Partnership information with payment providers, software providers and so on
Step Two – Due Diligence
Once the Application has been submitted, the provincial authority will carry out background checks on the applicants. The regulator will also investigate the applicant’s management team and key personnel. Investigations will cover the financial records and the criminal history of key stakeholders.
Step Three – Technical Assessment
This stage of the application process involves evaluating the gambling platform. The goal is to ensure it is fully compliant with technical standards. Some of the basic checks that the operator will carry out at this stage include:
- Verifying the fairness of games offered by the operator
- Verifying anti-money laundering measure
- Ensuring compliance with player protection standards
- Confirming the platform’s responsible gambling tools
Step Four – Licensing Decision
After completing the relevant assessment, the provincial board will issue a decision. Applicants must pay a provincial licensing fee. This varies from one jurisdiction to the other. But the application fee for a National License is the same across all provinces.
The approved license will specify the gambling activities that the operator is allowed to provide. The review and approval process can range from several months to up to a year depending on the province.
Again, national legislation prohibits operators from offering online casino-style games to South Africans. This means most provinces will only grant operators a sports betting license. However, an operator may find legitimate ways to enter the casino gaming market through routes offered by progressive provinces like Western Cape and Mpumalanga.
License Renewals and Reviews
All issued licenses are subject to regular review and renewal by the issuing authority. The licensing authorities also monitor the activities of licensed operators and may request a review at any time. These regulators have the power to suspend or revoke an operator’s licenses. To prevent this operators must ensure that they continue to meet compliance and player protection standards.
Offshore Operators in South Africa
Like many other jurisdictions, South Africa does not expressly ban offshore operators. That’s because it’s almost impossible to stop players from registering and playing on these international gambling sites.
South Africa does not block foreign gambling websites. But, the country has restrictions that prevent foreign exchange and payment providers from rendering their services to unlicensed foreign operators. The receiving banks may also seize and hand over incoming funds to the NGB. These measures limit the activities of unlicensed offshore operators in the country.
Conclusion
As this guide shows, South Africa’s online gambling laws are a bit complicated. Online sports betting is completely legal.. But online casinos remain largely prohibited by law. Operators can find a legal workaround and offer this service to South African gamblers through specific provincial loopholes. Operators and developers looking to enter the South African market must be aware of the legal requirements and follow stipulated laws to keep their platforms legal and compliant.
