Gambling outlook 2019-2023

PwC’s team of gambling specialists provide an unbiased overview of how the gambling industry in South Africa is expected to develop over the coming years.


Welcome to the seventh edition of Gambling outlook 2019-2023. The gambling market in South Africa improved in the year to 31 March 2018 despite a weak economy and growing competition from illegal online casinos.

The overall performance of the economy continues to play a large role in influencing spending on gambling as evidenced by the impact of rising fuel prices, the increase in the VAT rate and general inflation on consumers disposable income. The share of spending on licensed gambling continues to be impacted by the high levels of illegal gambling operations.

More than a quarter of gamblers in South Africa engage in unlicensed gambling, which cuts into the licensed market. Illegal gambling includes online gambling, which remains convenient and accessible, with many consumers still being unaware that online gambling is illegal.

At the same time, efforts are afoot to further regulate licensed gambling with a new National Gambling Amendment Bill being tabled by the minister of trade & industry in 2018, but not yet enacted. For purposes of this analysis, we assume that the Bill will remain tabled and will not be enacted.

The licensed market is also becoming more competitive with the continued roll-out of LPMs, electronic bingo terminals (EBTs), and legal bookmaking. Sports betting and the related betting on lottery and other results are hugely popular in South Africa with the result that this segment continues to perform well.

Water from the ground with lights

This report covers casino gambling, limited payout machines (LPMs), betting (horse racing and sports), bingo and the National Lottery. The report provides data on gross gambling revenues (GGR), which is the amount wagered minus the amount returned to players as winnings; and gambling taxes and levies, which is the amount levied and collected by provincial licensing authorities from legal gambling. In the case of the National Lottery, contributions are made from lottery tickets to the National Lottery Distribution Trust Fund.

Sources: National Gambling Board of South Africa, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates, CASA

Casino gambling still dominates the market in South Africa, accounting for 64% of total gross gambling revenue in 2018. The casino market is mature and continues to face competition from other legal gambling outlets as well as illegal gambling operations.

The economy will affect casinos more than any other category because that market is now mature and the expectation of modest economic growth will limit casino GGR growth. We project casino GGR to grow at a 2.0% compound annual rate from R18.4 billion in 2018 to R20.4 billion in 2023.

LPM operating positions are still increasing and we expect growth of 10.4% in GGR for 2019, with continued expansion in this market over the next five years resulting in LPM GGR growth to average 6.6% compounded annually during the next five years, totalling an estimated R4.1 billion in 2023.

Betting was the fastest growing category in 2018 with a 20.7% increase in GGR, principally fuelled by continued growth in legal sports betting, which increased 33.8% in 2018.

Sports betting includes betting on lottery and number-type games, which continue to be hugely popular. Legal sports betting nearly quadrupled between 2014 and 2018, rising to R3.9 billion from R1 billion in 2014. Horse racing GGR rose 3.0% in 2018 and we expect similar growth going forward. Overall betting GGR, including horse racing, will expand at a projected 12.6% compound annual rate, increasing to R11.1 billion in 2023.

Gross National Lottery revenues (ticket sales or turnover less payouts to winners) rose 1.3% in 2018, building on the 34.7% rise in 2017. As with casinos, the National Lottery faces competition from both legal gambling outlets and illegal lottery operators.

The National Lotteries Commission (NLC) has stepped up its investigations of illegal lotteries, reporting that 96% of illegal lottery cases were investigated in 2017 and 2018, up from 78% in 2016, a development that could limit incremental competition from illegal lotteries. As with casinos, we expect the economy to be the principal driver and project the market to expand at a 2.0% compound annual rate to R3.33 billion in 2023.

Contact us

Pietro Calicchio

Pietro Calicchio

Partner, PwC South Africa

Tel: +27 (0) 11 797 5292

Yolan Naidoo

Yolan Naidoo

Senior Manager, PwC South Africa

Tel: +27 (0)12 429 0014

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