Greedy local financial service giants and offshore betting pirates are helping drive our vast and fast-growing online gambling crisis, while the industry is also shaping up to be a major money laundering risk. The online gambling industry, which isfast reaching catastrophic proportionsin South Africa, does not exist in a vacuum. It requires accommodative regulations and tax regimes – which SA’s antiquated and fragmented legislation supplies in spades.
It feeds off a desperate population that wants to believe in the life-changing potential of an elusive jackpot. Above all, it needs a financial system that facilitates funnelling billions in bets through its platforms at the least possible cost and with the least possible hassle. The South African financial services industry has made this shockingly easy – and has made itself an accomplice to the online gambling pandemic.
Practically all the banks, includingStandard Bank, FirstRand (FNB) andNedbankmake gambling companies prominent pre-set beneficiaries on their apps – alongside things like airtime and municipal utilities payments. Absa and Capitec are seemingly partial exceptions although they too have gambling companies as “public beneficiaries”. But another major part of the financial infrastructure that allows gambling to thrive sits with a set of major household name corporations that have developed bank-less “universal voucher” systems that bridge the gap between the cash economy and digital payments.
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And now, as far as we can ascertain, they are responsible for many billions of rands getting funnelled into the gambling “ecosystem”. While these systems were developed to provide unbanked customers with access to a variety of goods and services, gambling is seemingly now their foremost offering. Here we count, among others, retail giant Pepkor and Blue Label Telecoms (now rebranded as Blu Label Unlimited, also a major shareholder of Cell C).
More on these shortly. And taking it a step further, the presumed gambling market leader in South Africa and other countries in the region, the New York Stock Exchange-listed Super Group, has just launched its own cryptocurrency in a bid to lock in gamblers in a nearly cost-free payment system. This will, as one company executive told investors recently, allow the owner of Betway and Jackpot City to be “in total control of their [gamblers’] destiny”.
All the companies mentioned here argue to various extents that they are not the nation’s morality police. That does not, however, excuse the intentional and highly conspicuous efforts to channel customers toward gambling – an internationally recognised public health hazard which, as mentioned, is reaching catastrophic proportions in South Africa.
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