Ever since the first online casino came up, there has been intense competition between land-based casinos and online alternatives. The competition grows every year as the demand for online casinos keeps increasing, and more online casinos spring up. Some experts even believe online casinos may make land-based casinos obsolete.
South Africa is home to many reputable companies within the international gambling industry and known for its luxury casino resorts. It therefore comes as a surprise to many to learn South Africa has not yet made online gambling fully legal. Offshore casino operators are increasingly taking residents’, but not yet tourists’, attention away from the traditional casinos in the country but this may change with the new Gambling Amendment Bill. South Africa maintains a strong casino reputation internationally due to revenue generated from tourists through the luxury Sun City casino resort but the question is if the future doesn’t look even brighter in the legitimacy of online casinos. Let’s take a look.
South Africa’s Online Casino Scene Today
According to the country’s legislation, the operation of online casinos from within South Africa is illegal but nothing stops residents from playing offshore. Only a few legalized and regulated online sports betting platforms have been given licenses within South Africa to operate, which allows them to accept wagers on sports from local residents and citizens. Knowing the size of the online casino industry, many South African casino operators are pushing for online casino legislation, in a bid to help consolidate the country’s economy during the global pandemic.
In the meantime, many South African players are searching for online alternatives, and there’s no lack of options. A quick look at the many casinos and betting sites reviewed by the team at Africa-Bet, reveals more than 700 online casinos open to South African players. According to Joanna Bruce at Africa-Bet, the number of real money casinos by foreign operators offering banking solutions in ZAR and African Rand, as well as customer support in Afrikaans, are increasing each month since the beginning of the COVID-19 pandemic.
South Africa’s Land-based casinos in 2020
The South African casino resorts are known for their high standards and more than 45 of the land-based casinos meet the highest international standards, this is quite impressive. The land-based casino industry has the lion share of up to 70% in the Gross Gambling Revenue(GGR) of South Africa, which is worth up to R30 billion yearly. The GGR fluctuates every year based on different factors.
Unfortunately, just like many other countries, the GGR of South Africa has gradually been losing market share to its online counterparts. This shift accelerated significantly in 2020 due to the impact of the COVID-19 pandemic. The nationwide lockdown that kept citizens at home for long made the traditional gambling industry face unparalleled losses as they couldn’t operate during this time.
Online Casinos Market Trend in 2020
As the impact of COVID-19 lockdown negatively affected land-based casinos in 2020 causing the Sun to close down two of their casinos, it gave a positive rise to online alternatives’ growth. 2020 recorded an exponential increase in the demand for online casinos globally, with millions of players visiting casinos to play their favourite games online.
Sadly, an estimate for revenue generated from online casinos in South Africa is impossible due to its illegal status. Since no licenses are given out to online casino operators to operate in the country, the government can’t generate GGR from online casinos.
On the other hand, casino games enthusiasts residing in South Africa have been taking their business to foreign sites, and such sites pay taxes to the country where they are based. So, the South African Government has been losing quite a lot of the GGR they could generate to online casinos offshore. This is especially more so in 2020 when many countries enjoyed a much higher revenue than in previous years, from online casinos.
Outlook for 2021
Unfortunately, nothing much can be done to land-based casinos losing market shares to online casinos. Many players are getting more comfortable with online casinos and will prefer not to travel for miles before they can play at a land-based casino. Still, it doesn’t change the fact that many players still love traditional casinos, and casino floors will not stop getting guests. So, the GGR of South Africa’s land-based casino industry is still expected to record a high yield of up to R20 billion in 2021.
Presently, it is still illegal for operators in South Africa to operate in the country, so no GGR can be expected from the online casino industry. Many operators are pushing for the legalization of online casinos in the country, and there is hope that that could happen soon. Residents are playing at casinos licensed by the UK and many other countries. In the United Kingdom, some of these casinos pay taxes to get revenue of about €2.7 Billion annually from online casinos. With the increase in South Africans’ interest in online casinos, the country could earn up to a quarter of the UK’s online casino revenue. For now, the South African Government will still keep losing players to online casinos offshore. Still, if they could get this online casinos’ revenue, it will, without a doubt, significantly increase the country’s budget.
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