Opinion | Entrenching poverty

In a period of five years, gambling on illegal platforms has rocketed by 500%, rapidly turning it into a structured feature of the South African economy. It has evolved to become an extraction industry, has exacerbated social and economic ills and is compounded by regulatory failure. Research suggests that it is mainly lowincome South Africans who gamble away an astonishing share of their monthly pay.

Problem gambling is aided by a permissive and enticing environment, feeble regulatory framework, poor enforcement, low to no sanctions and weak tax collection. This has played out in a R1,5 trillion wagering industry in 2024. Its benefit to the economy in terms of jobs is negligible while its local investment is paltry.

Off-shore operators have captured the market and increased revenue by 40% from the 2023/2024 financial year. According to research conducted by Info Quest, 53% of respondents gambled to supplement their income and 63% gamble with committed household income. A large restaurant group said that online gambling is eroding household disposable income and is a clear threat to their business.

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Betway ploughs over 30% of its expenditure into advertising and marketing, which does the economy no favours as it fuels gambling addiction and leeches money from the country to off-shore destinations. The research suggests that South Africa is 10years behind in terms of the international industry regulatory framework. According to a 2023 Competition Commission report, South African and international banks implicated in alleged rand-dollar manipulation generated about R1 trillion a day from 2007 to 2013.

At least 28 banks have been implicated. Thus far, five banks have admitted to taking part in the scheme. The dollar weakened by manipulation through price fixing by banks leads to a massive loss of revenue and value.

The cost of goods and services increases without benefit and value, according to a report by the Cartels Division of the Competition Commission. Many working, middle- and lower-income groups bear the brunt of this alleged criminality, increasing the cost of imported goods and services, which have a direct impact on the cost of living. It is such siphoning of revenue from consumers that drives inequality deeper. Banks and traders shared confidential information, trading positions and strategies, to reduce competition or eliminate it so that profit is hugely increased.

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