Gambling, especially through sports betting and online platforms, is affecting how South Africans spend their money. It’s increasingly displacing discretionary purchases as well as spending on essentials such as food, clothing and health care.
South Africans wagered more than R1.1-trillion in the 2023/2024 financial year. About two-thirds of bets were placed on sports events or horse racing, most of it through online platforms, according to the National Gambling Board. This was a remarkable 40% higher than the turnover generated in 2022.
Gross gambling revenue amounted to R59bn last year, a 25.7% increase from the previous year — and a 10% rise every year over the past 20 years. There’s been explosive growth since Covid — 42% a year since 2020.
Gambling is often seen as a way to get “quick money”, especially amid persistent poverty and unemployment. And many people are pushed into debt, using credit cards, banks and loan sharks.
This disproportionately affects lower-income earners, who may spend 10%-20% of their income on betting, compared with 1%-2% for higher-income earners. Some even use social grants to gamble. And it’s apparently producing a fraying of the social fabric, as there is a rise in domestic violence and suicides, as well as associations with child neglect and children going hungry as parents chase losses. Gambling-related suicides have tripled since 2020, according to the South African Depression & Anxiety Group.
The impact is felt across the consumer landscape. Casual dining group Famous Brands, the owner of Steers, Mugg & Bean and Debonairs Pizza, recently highlighted that online gaming is eating into consumers’ disposable income and affecting restaurant traffic.
In the investor presentation for the year ended February 28, Famous Brands CEO Darren Hele said the company knows that the consumer is under financial pressure. “In a list of trends shaping our industry, probably the most universal [one] we are seeing is rapid growth in online gaming, which is reducing discretionary spend.”
Research by InfoQuest released in April this year reveals that 48% of active gamblers in South Africa say they are gambling more frequently than they were a year ago.
Among regular gamblers, spending is typically modest per session, but occurs often — in total usually well below 10% of monthly income, yet repeated several times a week. The study found that online gaming, sports betting and other digital platforms are gaining significant traction, especially among gamblers aged 18 to 34. Older gamblers tend to favour traditional lottery play.
InfoQuest MD Claire Heckrath notes that many young people are now actively budgeting for gambling, sometimes at the expense of important but nonessential products and services such as insurance and funeral plans. About half of respondents say they include gambling in their monthly spending plans, alongside rent, groceries and utilities.
Sports betting emerged as the most frequent type of gambling, with an average of 11 instances per month. Nearly half (48%) of gamblers report an increase in their gambling activity over the past year — a trend the researchers describe as “ringing alarm bells”. The uptick is likely driven by the growing availability of online platforms, aggressive advertising and shifting societal attitudes towards gambling.
The report says 37% of gamblers use surplus funds — money not needed for regular essential expenses — to support their habit, and it’s no longer an occasional pastime but a regular financial commitment. “The data suggests that the majority of gamblers may be putting their financial stability at risk in order to fund their gambling habits,” says Heckrath.
About 16% of gamblers say they have borrowed money at some point to fund their gambling. However, this figure is likely understated, as borrowing for betting can carry stigma and shame, leading individuals to underreport.
Perhaps the most disturbing aspect of gambling in South Africa is that, born of the desperation of poverty, it is widely seen as a source of income rather than just passing entertainment
A report from investment management firm Perpetua says gambling has been turned on its head over the past five years with the rise of online gaming. It notes that the incidence of gaming is double 2017’s level and the highest on record. Provinces with the highest incidence, at above 70%, are the Free State, Northern Cape and KwaZulu-Natal.
Financial institutions are picking up on this growing trend. Leading financial services group Old Mutual flagged a rise in gambling in its latest Savings & Investment Monitor survey, released at the end of July. John Manyike, head of financial education at Old Mutual, says this is the second consecutive year that the report has raised red flags about gambling’s impact on consumer behaviour and spending patterns.
The report finds at least one in five gamblers has borrowed money to gamble, used credit or sold possessions to fund their gambling, while one in four has experienced financial hardship as a direct result.
The survey also found that gamblers are more likely to fall behind on payments, whether on a mortgage or other monthly obligations, and show a higher incidence of holding loans. Gambling can have wider social consequences, too — such as children being pulled out of school due to financial strain at home.
“People who gamble often struggle with budgeting and are most likely to overspend, undermining their financial planning,” Manyike says, adding that a notable spike in advertising for gambling, particularly on billboards and TV, could be fuelling the trend.
According to data from FNB, customers’ spending on online gambling and lottery services in South Africa continued on an upward trend last year, with a significant 17.4% increase from 2023. Spending patterns showed a clear seasonal trend, with the second half of each year (July to December) recording the highest monthly averages.
Jacqui O’ Sullivan, corporate affairs executive at FNB, says December stood out as the peak month in both 2023 and last year. A notable spike in spend between June and July across both 2024 and the year before suggests a strong link to the country’s most prominent horse-racing event, the Durban July.
As for payment methods, credit cards were the most preferred option, accounting for 51% of total spend in 2023 and 52% of total spend last year. In terms of basket values, credit card users consistently had the highest average spend per transaction. In 2023, the average basket value for credit card users was R6,000, rising to R7,000 last year.
From a channel perspective, online gambling spend grew by 29% year on year, significantly outpacing in-store growth of 8.5%. This reinforces the view of an ongoing digital shift in consumer behaviour and the use of digital platforms in the gambling and lottery ecosystem.
Since the advent of democracy 30 years ago, many South Africans who never gambled before seem to have made it part of their lives — in recent years, thanks to digital communications, to the point of overdosing.
In apartheid South Africa, the only legal form of gambling was horse racing, with the limited option for the middle classes of weekend gaming getaways to the casinos of the then Swaziland. The creation of independent “homelands” provided a loophole, and casino resorts sprang up in the likes of Bophuthatswana (Sun City) and Transkei (the Wild Coast Sun). After 1994, with the reincorporation of the homelands into South Africa, gambling was legalised.
But the recent explosion in gaming seems to have been fuelled by easy and instant access to many new forms of gambling, mainly via cellphone technology. This has also made it very difficult to prevent children from gambling.
On what has always been a rather seedy industry, legitimacy has been conferred by its association with sport. Apart from endless opportunities to bet on the results, before and then during fixtures as the odds change, betting companies now have a strong profile as sponsors and advertisers, with naming rights for stadiums and teams.
Perhaps the most disturbing aspect of gambling in South Africa is that, born of the desperation of poverty, it is widely seen as a source of income rather than just passing entertainment and excitement in the tradition of “having a flutter” on the Durban July.
Whatever the form of wager, the odds are stacked overwhelmingly against the gambler. In the national lottery, the chances of getting six correct numbers are nearly 14-million to one — which means you’d need to play daily for 38,300 years to expect to win once.
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