Sun International Responds To The Proposal By National Treasury To Further Tax The Gambling Industry

1.  Does not address how to deal with the ever-escalating number of offshore operators able to receive bets from South Africans while paying zero taxes

2.  The proposal misses many significant points and punishes the local gambling industry which makes significant investments in South Africa

3.  These proposals will not necessarily achieve the stated objectives of raising tax revenue or increasing player protection

4.  It is premature to suggest a taxation without a clear implementable national online gambling law in place

5.  Invites the National Treasury to engage in dialogue with the industry stakeholders to find a find sustainable, predictable and balanced tax and regulatory framework for SA

The discussion document, which calls for public comment, was published late yesterday.

Bengtsson noted that Treasury does not understand the nature of online gambling or how the industry works, and has not acknowledged the significant role that the local gambling industry already plays in the South African economy, with Sun International alone contributing R3.2 billion in national and provincial taxes during 2024.

“It is a great pity that Treasury did not consult with the industry or relevant regulators as adding additional taxes to gambling will make our industry one of the highest taxed gambling industries in the world. This will be over and above the VAT charge that only South Africa applies to gambling. Our offering is not a service where the price can simply be increased and passed back onto the customer. We are forced to absorb VAT charges so additional taxes, on gambling will effectively destabilise the legal gambling industry.

Significant evidence exists worldwide that increased gambling taxes will ultimately lead to a reduction, rather than an increase in tax revenue. Local operators will find it difficult to invest in new products and personnel, so customers will inevitably shift to offshore platforms. The major consequence of this shift will be that customers will receive less protection which directly contradicts the proposed regulatory intent. Offshore operators do not offer the same level of consumer safety; they pay zero taxes and invest nothing in this country.”

Speaking at the recent Gambling Regulators Forum, Bengtsson identified the vast offshore online gambling industry as a key issue for which little attention has been paid in South Africa to date. Balanced regulation and dialogue with industry players is key to moving forward productively.

The highly extractive offshore gambling platforms are currently able to operate well beyond South Africa’s borders. Many of these gambling sites operate from tax havens, and do not create any local employment or make any contribution to addressing responsible gambling, but they do harm the local legal industry.

“Any notion that adding additional taxes will curb gambling is wrong. Increased taxes will only harm the local industry which makes an enormous contribution to South Africa, but it will not touch the offshore operators as their operations fall outside of South Africa’s regulations.”

Bengtsson also asserted that if there was more appetite to curb money pouring out of the country to offshore operators, it could significantly increase revenues for government and provincial gambling boards. There are over 2000 offshore sites identified, (Source: independent report by Yield Sec Nov 2024) indicating R55,1bn leaving the country, this is 62% of the country’s online GGR for 2023/4.

“Unlike the offshore operators, Sun International employs 7,000 people and invests R1.9 billion in salaries and wages. During 2024, we contributed just under R400-million in PAYE and about R80-million on skills development and training. Our direct contribution goes further in that we have impacted the lives of 620,000 people who benefitted from our corporate social investment spend of R28.3- million, of which R18-million went into education.

Our knock-on effect shows that we have spent some R50.1-million on supplier development, and R4.5-billion on preferential procurement from black-owned SMMEs. Of that, R1.6 billion went to black women suppliers, meeting our own ambitious target of 30%.”
Whilst acknowledging that 70% of Sun International’s profits come from land-based properties which this bill does not target, Bengtsson is concerned that the proposed taxes will be detrimental to its online business.

Bengtsson highlighted that, for the first half of 2025, Sunbet (the group's online gambling platform) generated R65 million in gaming taxes. These funds were distributed between the North West Province (approximately 33%) and Mpumalanga (approximately 66%).  Over the past six months Sunbet has spent over R100-million in VAT, paid salaries to its 250 employees, and helped grow the country’s digital economy by employing highly skilled people with online and digital expertise.

Sun International has long been at the forefront of responsible gambling. The current National Responsible Gambling Programme (NRGP), which was established by Sun International 25 years ago, is now administered by the South African Responsible Gambling Foundation (SARGF). Today, the programme is funded and supported by the broader industry, with contributions and resources allocated according to a prescribed percentage of each company’s Gross Gambling Revenue.

Bengtsson remarked “The heat and the noise surrounding recent discussions in the media about gambling came from sources which, like the National Gambling Board, have their own vested interests and do not speak for the industry as a whole.

Given all that the local gambling industry does, we strongly urge National Treasury to reconsider their proposal to add further taxes on our industry, and to instead consult with industry stakeholders to develop a sustainable, predictable and stable tax and regulatory framework that will allow the industry to continue to invest in South Africa.”