Massive Online Gambling Tax for South Africa?

In 2008, the National Gambling Amendment Bill began a chain of significant changes to South African gambling laws. The bill was introduced in an attempt to tighten local regulation of online gambling, and to reduce the presence of offshore gaming sites. The bill addresses several issues, including player protection polices, advertising, underage gambling, money laundering, and other important areas.

The bill also proposed ways in which online gambling sites could be licensed and regulated. Only 10 licenses will be issued, and the licenses stipulate that operators must have a physical presence in South Africa, and that all financial transactions must be made locally. In other words, the newly licensed internet gambling sites will be only available to South African players.

One important issue was missing, however, from the National Gambling Amendment Bill of 2008 – taxation. The issue of how online gambling sites in South Africa will be taxed is being covered by separate legislation – the Interactive Gambling Tax Bill, which was introduced in November 2009. The bill will introduce a special tax on all interactive gambling activities in the country. Only

Taxation on online gambling in South Africa will only apply to operators. The current proposal suggests that the tax be 6% on gross gambling revenue. The Department of Trade and Industry (DTI), which is the entity responsible for the control and taxation of internet gambling in the country, has defended the need for the heavy tax. “Taxation needs to be optimized to create a level playing field and to curb any proliferation of gambling,” a DTI spokesperson said.

The DTI has responded mildly to criticisms of the bill, saying that these concerns are being addressed. There has not yet been any indication that the new tax bill will be revised.