Online gambling has exploded across Africa, where governments are now trying to cope with the bankruptcy-making machines that are the online gambling syndicates, such as DraftKings and FanDuel.

In South Africa, the problem is particularly bad, as explained in an expose published in Reuters. In 2017, before the advent of smartphone betting, an estimated 30% of South African adults already engaged in gambling. In 2024, the National Gaming Board estimates 67% of South African adults engage in online gambling. Compare that with 22% of U.S. adults with an online gambling account, and you begin to get an idea of the magnitude of the problem.

Desperation is the reason so many South Africans engage with online gambling, said Sibongile Simelane-Quntana, executive director of the South African Responsible Gambling Foundation. She said South Africans are “trying to gamble ourselves into prosperity.” The exact opposite is happening, as more and more South Africans gamble themselves into a giant hole of debt and despair.

In 2024, Simelane-Quntana’s agency provided gambling addiction treatment to 2,600 South Africans. In 2025, that number nearly doubled, to 4,600. South African gamblers are on pace to break $100 billion wagered in 2026. In 2024, the number was $93 billion.

In response to the rise in gambling addiction, the national government has proposed a 20% tax on the earnings of gambling syndicates. Currently, the syndicates pay 6-9% to provincial governments. The new federal tax would raise the maximum rate to 29%. An industry trade group claims the total taxes faced by gambling syndicates would amount to $38.5%.

With so many billions wagered, the industry has a war chest to use for lobbying and disinformation. Sean Coleman, CEO of the South African Bookmakers Association, a gambling industry trade group, and managing director of Betdata, told Reuters that the tax would drive people to the “illegal market.” He attempts to make the case that there is a pent-up demand for gambling that will circumvent legal smartphone betting to seek out illegal gambling parlors.

The numbers themselves prove the fallacy of the industry’s case. If problem gambling doubles as a result of legalized online gambling, it’s because legalization attracted vast numbers of new gamblers. It’s not like these problem gamblers were waiting for legalization to seek help. They need help now because legalized online gambling is financially crushing them.

Even the industry’s estimate of a total 38.5% levy on profits is far less than the 51% of sportsbook revenues (not profits) levied by several U.S. states, including New York. Nevada and Iowa, on the other end, take only 6.75% of revenues.

The problem with large state taxes on gambling operations is that they make partners of gambling syndicates and governments in the systematic fleecing of their own citizens. States come to rely on the boost to the general fund, and the revenues are spent frivolously on consultants and marketing campaigns, rather than on education or gambling addiction treatment.

Instead of restrictions on gambling, we get school programs to educate children about risk and reward, odds and finances, and how gambling is an entertainment industry just like going to the movies or watching sports. These programs will no doubt lead to an increase in problem gambling, not a reduction in it.

This training, and, increasingly, the treatment for gambling addiction, is being taken over by the gambling industry itself. That way, if the government uses online gambling taxes to fund gambling addiction education and treatment, the funds will go right back to the trade association lobbying against the taxes. Taking a page from the opioid addiction playbook, the industry is both causing the problem and providing the cure, an obvious conflict of interest that there appears to be no way of stopping.

As gambling addiction spreads, the billions of revenue it generates are being split between businesses and bureaucrats. Malawi and Zimbabwe both began a similar tax on online gambling profits this year, according to Reuters. Senegal included a gambling tax increase in its 2025 economic recovery plan, hoping to plug a major deficit. Soon, these countries, too, will be paying the gambling lobby to educate children about gambling and treat the addicted. What a racket!

Written by Steve O’Keefe. First published April 6, 2026.

Sources:

“African states hike gambling taxes as addiction soars, and industry fights back,” Reuters, March 19, 2026.

“22% of All Americans, Half of Men 18-49, Have Active Online Sports Betting Accounts,” Sienna Research Institute, February 18, 2025.

“Online Sports Betting Taxes by State, 2025,” Tax Foundation, September 16, 2025.

Image Copyright: GovernmentZA, used under Creative Commons license.