The harmful effects of surging online gambling rates are taking their toll on the most vulnerable in South African society. Social grant recipients and students dependent on financial aid are increasingly turning to betting in hopes of making ends meet.

At a parliamentary press briefing on Monday, Tebogo Letsie, chairman of the higher education portfolio committee, was asked a question relating to a Daily Maverick report that cited students who use their National Student Financial Aid Scheme (Nsfas) allowances to gamble online. Lestsie said the committee did not endorse gambling, but there were factors pushing students towards the activity.

“We are worried students do spend their allowances on gambling and there might be a contribution from Nsfas not paying these allowances on time. The students might then want to take a chance and borrow money from those students that have already received their allowances to make bets, thinking they will win, but they end up losing,” Letsie told TechCentral in an interview. “When their allowances come in, they are already in debt and must pay back the money.”

Nsfas funds are not the only form of government-led social spending that ends up in the hands of gambling houses. According to a News24 report, during an investor call on Monday Pick n Pay CEO Sean Summers called for an advertising ban on online gambling platforms.

According to Summers, research done by “a number of South African institutions” estimated that more than 20% of South African Social Security Agency (Sassa) grants were being gambled online.

The call echoed sentiments expressed by Rise Mzansi MP Makashule Gana in parliament in August, who said at the time that online gambling advertising had “gone overboard” by promising punters they would “get rich quick”.

In a presentation to parliament earlier this month, the National Gambling Board said it has been “working closely” with the Advertising Regulatory Board to ensure that gambling houses are compliant with regulations restricting when and how they advertise.

In the same presentation, the gambling board acknowledged that the rate of problem gambling was as high as 31% of those who engaged in the activity.

Sports betting

Total gambling turnover surged to R1.5-trillion for the year ended 31 March, with gross revenues totalling R75-billion. Online sports betting contributed R44.5-billion to the R75-billion total, while physical casinos, at R16.6-billion, made up only 22%. The shift away from physical spaces has been happening since the early 2010s, but lockdown restrictions due to the Covid-19 pandemic led to online platforms overtaking physical establishments in 2020.

Protecting government social spending from misuse is one of the use-cases for central bank digital currencies (CBDCs). In a December 2024 interview with TechCentral, Tim Masela, outgoing head of the National Payment System at the Reserve Bank, said a Sassa grant paid using a CBDC could be programmed to, for example, only buy bread and other essentials, or only facilitate transactions at certain outlets and not others.

Read: SA gamblers abandon casinos for phones as online betting surges

But there are political considerations in coding money for specific uses. In another TechCentral Show interview in September, PayInc CEO Stephen Linnell said programming money has implications for democratic freedom that may be undesirable.

Regarding the student gambling problem, Letsie said the portfolio committee will engage the ministry to explore solutions. More generally, the gambling board has called for an update of the “outdated” National Gambling Act of 2004, which does not consider online platforms in sufficient detail.

“There has been an upsurge in online gambling and casino games offered by offshore operators. There is a need for the development of a legal framework for online gambling, but there is also a need for gambling crime to be [categorised] as a priority crime,” National Gambling Board CEO Lungile Dukwana told parliament. — © 2025 NewsCentral Media