Universal access to the internet is transforming betting and gambling, a sector that is strictly regulated in the physical world, and experts warn it risks becoming South Africa “next great social ill”.

Speaking in parliament on Tuesday, Rise Mzansi MP Makashule Gana urged the department of social development to address the “scourge” of online gambling and not leave it to the department of Trade, Industry and Competition to deal with alone.

Get breaking news from TechCentral on WhatsApp. Sign up here

“We have a new crisis in this country affecting young people and grant recipients, and it is online gambling,” Gana told MPs. “Actually, online gambling is more addictive than nyaope (a form of cheap heroin popular in townships). It is a social ill and we need to deal with this problem because these online gambling companies are targeting young people and grant recipients.”

Data from the National Gambling Board shows that over the past 20 years, the gambling sector has grown annual gross revenues from R8-billion in the 2003/2004 financial year to a whopping R59-billion in 2023/2024. Over the same period, market share has shifted away from physical establishments – dominated by casinos at 89% market share – to online sports betting, which has taken 69% of the market in 2023/2024, with casinos at just 29%.

Statistics from the South African Responsible Gambling Foundation, a provider of free treatment and counselling to South Africans trapped by problem gambling and gambling addiction, show that following the Covid-19 pandemic, there has been a similar shift in the preferred mode of gambling reported by those who contact the organisation seeking help.

A social gamble

Of the 2 662 referrals received by the foundation from 1 April 2023 to 31 March 2024, online betting was by far the most popular form of gambling. In contrast, casino slot machines topped the list of preferred gambling modes in the 2020 financial year when online sports betting was not even in the top 10. So, the market has shifted considerably in a few short years.

The shift from physical gambling establishments onto online platforms comes with regulatory challenges that have proven difficult to surmount.

Read: No, you’re not addicted to your smartphone

In the physical world, regulations stipulate a minimum distance between gambling establishments as well as minimum distances from schools, churches and community centres. These restrictions helped stem the rate at which gambling could be accessed by the most vulnerable in society. The shift to online gambling has changed that.

“We have noted that children can now gamble using their parents’ phones without the parents’ knowledge. This was difficult for them to do before the advent of online gambling as they could not get entry into gambling venues,” said Sibongile Simelane-Quntana, executive director of the South African Responsible Gambling Foundation.

According to Simelane-Quntana, problem gambling is affecting both genders equally. However, it is mostly the youth (aged 18-34) who are attracted to online gambling, as they are more tech-savvy than older people. Responsible Gambling’s data shows it is mostly full-time employed people who are being negatively affected by online gambling and coming forward for help.

“They might be gambling during work hours and focus less on their work. In addition, they are also spending more of their income on gambling than providing for the household,” said Simelane-Quntana. “Gambling has become 24/7 available to any punter, which makes it easy to become addicted.”

But other, more vulnerable segments of society are not as visible to the organisation: children and the unemployed are less likely to seek professional help. Some may not even recognise their gambling has become a problem.

On his X page, finance influencer and former banker Koshiek Karan has been campaigning for the amendment of the Remote Gambling Bill to make it more difficult for online platforms to make gambling easily accessible to South African citizens.

Among the amendments Karan calls for are restrictions on the integration of betting platforms and banking apps and the use of gamification to lure people into betting.

“Saying people will always bet strips predatory firms of accountability. Online gambling is designed to monetise exploitation; there’s relentless marketing, ‘free’ bets, banking app integrations and addictive gamification. In reality, gambling firms actively seek out the most vulnerable,” Karan said in a post on X. – © 2024 NewsCentral Media