These were SA's top-selling cars and bakkies in June
According to automotive body Naamsa, June's new vehicle market grew for the ninth consecutive month to 47,294 units, an increase of 18.7% compared to June 2024. Year-to-date sales for the first half of the year are 13.6% up to 278,911 vehicles.
Last month the passenger car segment moved 32,570 units, a 21.7% increase over June 2024. Light commercial vehicles, bakkies and minibuses sold 12,129 units, a gain of 14.9% over the same month last year.
A wave of new models and brands continued to stimulate interest in the under R400,000 price band, said Brandon Cohen, chair of the National Automobile Dealers' Association (Nada).
'Most of the growth we're seeing is centred in the sub-R400,000 segment,' Cohen said.
'The price point remains critical for volume, affordability and trade-ins, with a direct knock-on effect on pre-owned sales performance. The used vehicle market is benefiting from improved affordability metrics, driven by softened interest rates, favourable vehicle pricing and the rollout of the two-pot retirement savings reform.'
The interest rate reprieve since September 2024 has lifted some burden on indebted consumers and stimulated demand for credit and consequently new vehicles, said Lebo Gaoaketse, head of marketing and communication at WesBank.
'The SA Reserve Bank has lowered rates 0.75% over the past nine months but may become more cautious with further cuts given global economic turmoil.'
While lower rates have eased affordability marginally, motorists continue to face budget constraints. Despite low inflation, the average contract term continues to increase while the amount of credit reduces, he said.
'South Africans want new cars but they're spending less on them. This has been enabled to some extent by the entrance of new brands to the market at aggressive price points, but also by innovative and attractive incentives on the dealer floor.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
2 hours ago
- IOL News
Transformation Fund: Fixing apartheid-era policy distortion
Parks Tau, Minister of Trade, Industry and Competition (left) and Deputy President Paul Mashatile ahead of a business briefing on the Transformation Fund held at the Freedom Park Heritage Site and Museum in Pretoria on May 5, 2025. Parks Tau In 1994, South Africa inherited an economy that was structurally designed to exclude the vast majority of South Africans. Apartheid's distorted policies had created a dual economy: one of wealth and privilege and another of poverty and exclusion. This calculated economic strategy, structured along racial lines, created white-owned mines, farms, and factories. At the same time, many black South Africans languished on the fringes of the economy in an underdeveloped informal sector. Their meaningful participation in our nation's wealth was further eroded by discriminatory laws that restricted Black South Africans from owning land, accessing quality education, and entering skilled professions. These economic distortions, which were implemented over hundreds of years, continue to plague our nation today as we grapple with one of the highest levels of economic inequality in the world, worsened by alarmingly high unemployment, especially among Black youth. The country's Gini coefficient of 0.63 shows that our nation's income remains unevenly distributed, with the top 10 per cent of the population holding more than 85 per cent of household wealth. This persistent disparity undermines the development of an inclusive economy where all citizens participate and benefit. The transformation we seek is about positive change and is the only logical path to long-term growth and the reduction of inequality. In deracialising ownership across our economy, we open more opportunities for black people, in particular women and the youth. While the Constitution guides our work in creating a society with equal opportunities, we require a deliberate removal of structural obstacles to draw more people into the economy and mechanisms that advance our constitutional commitment to economic redress and transformation. In this regard, the government plans to introduce the Transformation Fund to help level the economic playing field for emerging Black businesses, particularly those in key economic sectors such as manufacturing, agriculture and tourism who struggle to secure funding due to stringent lending requirements. The fund will provide financial support, infrastructure and capacity-building to Black-owned businesses – in particular Small, Medium and Micro Enterprises, women and youth entrepreneurs, and people living with disabilities - who are often locked out of meaningful economic participation due to their lack of access to capital. In fostering greater access to capital, business owners can invest in equipment, hire skilled staff, expand into new markets and ultimately quicken the pace of transformation in South Africa's economy. It is also expected to stimulate meaningful economic activities across all regions of our country. A similar transformation initiative took place in South Korea, whose government actively worked with companies in the country to address market failures. Local businesses known as Chaebol were guaranteed loans from the banking sector, backed by the government. In the late 1980s, this led to rapid industrialisation with Chaebol businesses dominating the industrial sector in manufacturing, trading and heavy industries. There was also great success in Malaysia's empowerment initiative, demonstrating what can be achieved through transformation. The country in 1970 found itself in a similar position we face today and began to transform its society and economy through economic empowerment. Its empowerment plan, the National Economic Policy, assisted with the redistribution of the country's wealth to the indigenous Malays known as Bumiputeras. Today, Malaysia is among the richest countries in Southeast Asia by GDP per capita. The Transformation Fund we are proposing will operate through a transparent application process, where qualifying businesses, as well as partnerships, can apply for funding based on the project's potential for social impact, sustainability, and alignment with national development goals. The fund will be anchored in contributions already made to the Enterprise Supplier Development and Equity Equivalent Investment Programme as part of our nation's B-BBEE policy. While no additional contributions are required over and above those made under our B-BBEE commitments, the voluntary co-funding by government and business of our transformation efforts can quicken the change we want in our economy. In supporting the Transformation Fund, both the public and private sectors stand to benefit from the investment in future suppliers, customers, and innovators who will, in turn, build resilience and relevance in a fast-changing society. In advancing the establishment of the fund, it is proposed that the fund will be managed by a dedicated governance structure to ensure transparency. A Special Purpose Vehicle will be established to ensure accountability to an Oversight Committee and a board that possesses the required skills and capacity. The fund's draft concept document was released for public comment on 19 March 2025, and the comment period concluded on 28 May 2025. South Africans are encouraged to continue to actively engage on the fund, and more details can be found on the website The government plans to have the fund operational by the end of the year and capacitated with R100 billion. Once operational, it will assist in bringing real change to our economy and the lives of people. Let us turn transformation from a concept into practice as we make a real difference in others' lives and create a fairer society. * Parks Tau is Minister of Trade, Industry and Competition. ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.
The Citizen
3 hours ago
- The Citizen
Malatsi outlines four areas to propel SA into the digital era
Malatsi said SA has entered a new era where AI and digitalisation are rapidly impacting every person, home, and industry. Minister of Communications and Digital Technologies, Solly Malatsi, says the Government of National Unity (GNU) has placed digital inclusion at the heart of its developmental agenda, outlining four focus areas to propel the country into the digital era. Malatsi unpacked the four areas of focus during his welcome address at Huawei South Africa Connect 2025. Connecting SA The platform brings together government, industry, and innovators, collaborating to build an inclusive digital economy that connects South Africans 'not just to technology, but to real opportunities, dignity, and hope.' Malatsi said the platform is a reflection of the country's shared commitment to using technology to solve challenges and create new opportunities for institutions and for South Africans. 'I must take this opportunity to thank Huawei for always stepping up when I've called on them to support our efforts to expand access to smart devices. Their consistent willingness to assist has fast-tracked our ability to put smart devices in our people's hands,' Malatsi said. ALSO READ: Malatsi takes action to lower smart devices and phone costs in SA New era Malatsi said the country has entered a new era where artificial intelligence (AI) and digitalisation are rapidly impacting every person, home, and industry. 'I remain encouraged by the potential of technologies like AI, 5G, and cloud computing to advance our national priorities. 'As one of the leading digital hubs on the continent — and as the current holder of the G20 Presidency — South Africa is not only embracing new technologies, we are helping to shape how they are applied across the continent and the globe,' Malatsi said. Malatsi said during his current term, the following elements are where he and his department will prioritise as must-achieve goals. Devices The first is working towards achieving 100% connectivity in South Africa by 2029. 'Through SA Connect Phase 2, we are extending broadband access to schools, clinics and libraries in underserviced areas,' Malatsi said. He said this includes concluding the Broadcast Digital Migration process to free up spectrum, expanding 5G infrastructure, and modernising public facilities with open-access fibre. 'We have also seen access to devices being addressed by removing the 'smartphone tax' for phones that cost less than R2 500. This is a meaningful step toward reducing barriers for low-income households to access smart devices. It is one small step in a long journey of eliminating barriers to affordable smart devices.' ALSO READ: AI could be a game changer for South Africa, says Malatsi Skills Malatsi said South Africa is investing in digital skills. He said digital inclusion means nothing without the ability to use technology meaningfully. 'Through the national Digital and Future Skills Strategy, our aim is to empower 70% of the population with basic digital skills by 2029. 'This includes integrating digital literacy into basic education and scaling community-based learning initiatives. These efforts target not only students, but also job seekers, workers in transition, and vulnerable groups such as women and persons with disabilities to ensure that no one is left behind in the digital economy,' Malatsi said. Productivity Malatsi said his department is also promoting the productive use of digital technologies to ensure that connectivity translates into real opportunities. 'This means using the internet not just for entertainment, but as a tool to access government services, run online businesses, reach new markets and connect with job opportunities'. Support Malatsi said his department is determined to make South Africa the most attractive destination for ICT investment on the continent. 'That means providing policy certainty, reforming procurement systems, while upholding our national transformation goals. 'We have already taken important steps, including issuing the Equity Equivalent Investment Programme (EEIP) policy direction to unlock private sector investment and reforming SITA's procurement model to improve delivery and enable competition,' Malatsi said. Consultative process Malatsi said his department is also launching a consultative process to conduct a comprehensive review of South Africa's legislative and policy landscape. 'Through this process, we will co-create a regulatory environment that is conducive for inclusive growth, innovation and competition in the ICT sector. 'These four priorities form the foundation of our strategy to build a digitally inclusive, innovative, and high-performing digital ecosystem for all South Africans,' Malatsi said. Malatsi said gatherings like South Africa Connect matter because it enable government, industry, innovators, and civil society to align efforts, leverage resources, and deliver tangible solutions that directly impact citizens. ALSO READ: Malatsi initiates bold plan to expand broadband connectivity across SA
Daily Maverick
4 hours ago
- Daily Maverick
South Africa's bad bet: How online gambling is a major source of extraction from the economy
Rocketing online gambling has become a major source of extraction from the South African economy, riding on regulatory failure, some cynical business practices and wall-to-wall self-promotion to profit off a mammoth new social ill. Online gambling is sucking South Africa dry. The industry's sheer scale and hard-to-fathom growth rate has already made it something like a structural feature of the economy with roots that seem to burrow deeper by the day. The headline number: a 550% increase in gambling in only four years with no sign of a reprieve, reaching a turnover of R1.14-trillion in the 2023/24 year, or nearly 17% of GDP. And that is only the measurable part reported by locally licensed operators. That figure excludes any platform registered abroad, making it impossible to fully grasp the size of the problem. Meanwhile the industry's carpet-bombing approach to marketing has saturated public life in a way last seen in the heyday of tobacco advertising — before it was banned and the sector imperfectly stifled with huge sin taxes. Most recently, industry leader Betway took it up a notch by flighting advertisements via a pilot free wi-fi service in selected Home Affairs offices, although the company's ads were taken down after a public outcry. Globally, the design of the gambling games, which are largely common on platforms all over the world, is widely viewed as being crafted in a way that amplifies addictive behaviour and abets problem gambling — something often reinforced with tailored special offers and prompts for gamblers getting cold feet. In South Africa, Betway has in at least one documented case paid what arguably amounted to 'hush money' to make a complaint to the authorities in this regard go away — about which more below. And unlike many purveyors of social ills like alcohol — and in fact traditional casino-bound gambling — this still-emergent industry appears almost entirely extractive, offering relatively minor local investment or employment. The extractive nature of the sector is further underscored by its major offshore component with large players and their suppliers directing profits to offshore havens and emergent super-conglomerates based in Europe and the US. The industry presents its massive marketing expenditure's bolstering of the media sector, its sponsorship of otherwise financially weak sporting codes as well as taxes paid as its major positive contributions. But the same could have been said about the tobacco sector only three decades ago. None of this counters the negative effects of the industry. The best available research also shows that it is mainly low-income South Africans who gamble away an astonishing share of their monthly pay. But behind the frenetic and colourful games, including radical new forms of 'in-play' sports betting, there is cold hard maths that is designed to ensure that in the long run the house always wins. And politics plays a potentially problematic role too, with South African-born mogul Martin Moshal, effectively the leading stakeholder in Betway, recently becoming one of the single largest funders of South African opposition parties. From 2021 onwards Moshal spent about R96-million in declared donations to ActionSA, the Democratic Alliance, the Inkatha Freedom Party and Build One South Africa. While there is no evidence Moshal, who lives abroad, has lobbied for regulatory favours, the DA has promoted a highly problematic Remote Gambling Bill, and Moshal's generosity raises at the very least the perception of potential influence. In addition, his extensive support for Israel, probably with money derived from Betway, sits uncomfortably with that country's ongoing alleged war crimes and genocide in Palestine — and appears in stark contrast with South African government policy positions. Moshal is famously reclusive, and attempts to seek out his comments via Betway were unsuccessful. However, a source linked to him told amaBhungane: 'Mr Moshal has donated to several political parties because he believes they offer South Africa the best chance of accountable governance, economic growth and security, and he has outlined his reasons for doing so on the record. It would be false and defamatory to suggest a link between any donations and gambling policy, not least because the parties to whom he has donated have different policy positions.' Meanwhile, South Africa labours under an outdated regulatory regime seemingly rife with perverse incentives that creates not only a permissive environment, but hobbles any cohesive response to the online gambling tidal wave. AmaBhungane has tried to piece together all these strands to reveal what underpins South Africa's most extravagant recent economic 'success story'. But first, a wider view. Big money Official statistics on gambling in South Africa are compiled by the National Gambling Board every year using data from the nine provincial boards, and provide the clearest indication of how online betting has seemingly become an unstoppable force. The going estimate is that total 'wagering' (of which online gambling makes up the largest component) in the financial year 2024 (up to March) was an astronomical R1.14-trillion — a 40% increase over the previous year. And in the year before that the national total wagering had already shot up by 45%. And the year before that it increased by 71.5%. At the current trajectory the total amount gambled by South Africans could have easily surpassed R1.5-trillion in the financial year that ended in March, although statistics are not yet available. For a sense of scale this is more than the turnover of the entire local mining industry as measured by industry body the Minerals Council — an industry that unlike online gambling employs hundreds of thousands of people, pays enormous amounts of royalties, is subject to strict black economic empowerment rules and contributes extensively to secondary industries. The turnover is also many times the national budget for social grants, which in the current fiscal year comes to just under R290-billion. Essentially, there was a structural break in 2021 which is when the online gambling industry started growing so fast that it had already, more than a year ago, became something akin to a defining feature of South Africa's economy — and public life — as a whole. The lockdowns during the Covid-19 pandemic are often cited abroad as a catalyst for the ongoing boom although — one imagines — the monstrous expenditure on advertising makes a significant contribution. The house always wins — a quick digression To be fair, these astronomical figures for 'wagering' are not the net amounts being extracted from the economy. All gambling games have an inherent so-called 'return to player' rate that goes by various names. Most commonly it is called the 'house edge' — a percentage of the value of bets that the house will always win in the long run. This rate is baked into the game by design, and while there is randomness for any single gaming session the basic rule will hold over time. In the South African betting sector amaBhungane estimates the average house edge is about 5%, meaning the most likely outcome of betting R100 is losing R5. This, however, still includes brick-and-mortar betting. Hollywoodbets told us that its online operations, in line with international standards, maintain a house edge of 3%. Mathematically speaking, if the average odds applied every time, a gambler would probably lose half their money after 23 bets. The result: in the 2024 financial year the betting industry (excluding casinos and other smaller categories) had gross gambling revenue of R36.9-billion. (This is the income remaining after payouts, from which the other costs of running the business still need to be deducted.) The business model inherently hinges on people betting what remains of that R100 as many times as possible in the shortest possible time — something of overwhelming importance for how games get designed, as we will see later on. The fact that the odds are against you makes it doubly troubling that survey data shows gamblers think of gambling as a way to earn more income — not the harmless form of 'i-gaming' entertainment the industry wishes to portray its product as. A survey conducted by market research firm InfoQuest showed that fully 53% of respondents either gambled because they need extra money or do it because a big win would 'change my family's life'. Additionally, something like 37% of respondents said that they were gambling with 'excess funds that they have'. The corollary of that is that 63% use money they can't really spare. This is underscored by, for instance, recent grumblings from restaurant franchise group Famous Brands that online gambling is eroding household disposable income to the extent that it is becoming a threat to its sector. But if this is what gamblers and other parts of the economy lose, who is collecting on the other side? Under the hood In South Africa the sector has spawned an effective duopoly, with the behemoths Betway and Hollywoodbets cornering between two-thirds and three-quarters of the market, according to our rough estimates — hoovering up something like R27-billion per year of the R40-billion in gross gambling revenue referred to above. Find the full responses to our questions from these two companies here and here. We'll explain our reckoning further down. According to survey-based data from consultancy Reveal, the National Lottery still leads in terms of the number of people gambling. But in terms of actual money spent, the two private sector giants dominate even while smaller players have also proliferated wildly. Which is not to say that all the other platforms are insignificant. MultiChoice owns 49% of Kingmakers, a Nigerian online gambling company that had revenue of R2.6-billion in its last financial year. It recently launched a South African brand called Supersportbets that has signed soccer giants Kaizer Chiefs and Orlando Pirates as official partners. Sunbets, the online offshoot of casino group Sun International, raked in R1.2-billion last year. Goldrush, the company indirectly owning a major share of the new Lotto operator licensee, managed a far more modest online gambling revenue of R136-million last year. Most of the locally active companies are privately owned with few financial details available publicly. Betway is however part of Super Group (not to be confused with the local logistics company with the same name), a conglomerate listed on the New York Stock Exchange. This allows for a much more granular understanding of how the sector ticks. The first remarkable thing about Betway is how it relies on South Africa for fully half of its global revenue — and that this revenue has been growing hand over fist. The second is the extent to which the company's immense gambling revenue from South Africa ends up in the hands of a tiny clique of South African expats. The group's CEO is Neal Menashe, a University of Cape Town alumnus, while its chief financial officer is Alinda van Wyk, a graduate of Stellenbosch University. Although he stepped down in February this year the group's president and chief commercial officer throughout its massive expansion into South Africa was Richard Hassan, another ex-Capetonian, while the board also features Merrick Wolman, another South African expat. But looming large is the enigmatic Martin Moshal, an expat who, as mentioned, has lately become better known in the country of his birth as a prolific funder of opposition political parties. More controversially, he is also a trustee of Keren Hayesod, a century-old Zionist group directing funding to, among other things, youth camps for aspirant members of the Israeli Defence Force (IDF) as well as support for foreign recruits into the IDF — the armed forces currently accused of carrying out a genocide in Gaza. Moshal indirectly has an interest in 45% of Super Group through trusts from which he benefits, but does not control. In addition to this, probably the second largest stakeholder is the aforementioned Merrick Wolman, who is associated with the Chivers Trust, which holds about 19%. Menashe directly holds another 3% of the group's shares bringing the tiny South African contingent's effective interest to at least a collective 67%. As mentioned, these shareholdings are largely indirect via a number of offshore trusts and management companies, meaning the individuals behind them do not exercise any formal control. Super Group emphasised that 'Mr Moshal is not a shareholder of Super Group (SGHC) Ltd but is a beneficiary of a trust which ultimately holds an ownership interest in Super Group'. Follow the money While Betway is deeply rooted in South Africa its profits leave little trace locally. First off, how much money does Betway make in South Africa? According to the latest financial statements of the parent company Super Group (for 2024), Betway's revenue in South Africa came in at €544-million (just shy of R11-billion), and that has been escalating massively. In response to our questions the company asserted that it can 'categorically say that your figures are incorrect'. The reason given is that it only reports results 'per region, not per market. So, the figures that we think that you may have extrapolated are from all the markets we operate across the continent, not only South Africa.' But the company's annual report states unequivocally that 'revenue from external customers for the year attributed to… South Africa is €543.9 million (2023: €317.3 million), (2022: €181.0 million)'. 'The Group's performance can also be reviewed by considering the geographical markets and geographical locations where the Group generates revenue. The Group has not provided geographic information regarding its non-current assets as this information is not available and the cost to develop would be excessive. Revenue from external customers for the year attributed to Canada is €568.1 million (2023: €514.0 million), (2022: €541.2 million), South Africa is €543.9 million (2023: €317.3 million), (2022: €181.0 million) and the United Kingdom is €183.3 million (2023: below 10%), (2022: below 10%). India is below 10% in 2024 (2023: below 10%), (2022: €144.5 million). No other country accounted for more than 10%.' — Super Group annual report Compared to official figures for the whole sector, Betway's South African revenue seemingly represents nearly a third of the entire country's betting industry. Cost-wise there is no geographical breakdown but Betway's global operations as a whole plough an astonishing 31% of expenditure into marketing — not exactly the stuff of broad-based industrialisation. What about profits? Dividends paid by Betway's parent company in New York last year amounted to €46-million (just shy of R1-billion, of which 67% or R670-million would have gone to the trusts linked to the South African expats). This year the dividend target is €81-million or roughly R1,7-billion, largely destined for the South African clique's offshore trusts. But it does not end there. Betway leases its sportsbook platform software and 'a significant portion of the casino games available for play across all our websites and apps' from a company called Apricot Investments. Apricot provides Betway's bespoke-developed flagship sports betting system on an exclusive-use basis, as well as the Player Account Management system utilised for the majority of Super Group's operations. Apricot also provides a significant portion of the casino games offered by Betway. Moshal is named the individual beneficiary of trusts that are the ultimate controlling shareholders of Apricot. Super Group has announced that it will this year simply buy out the IP for roughly €100-million (R2-billion) after having spent millions more funding Apricot's development of software. In colloquial terms, Betway is printing money for its ultimate beneficiaries, and in particular Moshal. Hush money Betway told us via a spokesperson that it 'has a good story to tell'. But at least one backstory behind this 'good story' reveals a shocking instance where the company paid what arguably amounts to R150,000 in hush money to a gambling addict who had laid complaints against the company with the authorities. The story emerged in a court case from 2022 where Betway South Africa sought an urgent interdict against former customer Claude Gouws to stop him from making public allegations against it. The judge upheld only part of the interdict, precluding Gouws from asserting that Betway was 'committing crime' or 'participating in corruption and making payment to government officials'. However, Judge Daniel Thulare pointedly declined to grant any injunction against accusations that the company was 'causing youth and other persons to become compulsive gamblers and addicts' or that it was 'refusing to uphold responsible gambling'. He said this would be inappropriate if merely based on the papers and without referral to oral evidence when there were real disputes of fact. 'The dispute between the applicants and the respondent is a matter of national importance in my view… Did the manner in which the applicants conduct business arise the addict in the respondent, the youth and other persons? After damaging people through squeezing them to their last cent and having them hooked to dry on gambling, do the applicants dump these people ostensibly to be picked up by South Africa's welfare system or if not lucky by a mortuary van after committing suicide? A court must have answers to these questions in order to determine if there was defamation…' The judgment also questioned Betway's behaviour leading up to the interdict application. The genesis of the matter was when Gouws requested that a promotional 'cashback' offer received by him be increased. These offers for so-called VIP customers are already controversial and when specifically requested amount to a red flag for gambling addiction. Betway declined and Gouws then closed his account — another red flag indicating someone had basically run out of money to gamble. Betway then intervened and increased the cashback offer to Gouws, which prompted him to resume gambling. According to Betway, the adjusted cashback offer was made 'with the aim of offering him an improved betting experience'. Gouws, however, kept asking for new cashbacks and after a number of successful requests Betway declined one, which led to the gambler raising the possibility of him suffering from problem gambling. Betway then closed his account and referred him for so-called permanent exclusion from gambling. Then things took a darker turn. Gouws complained that Betway had not done enough to protect him and lodged a complaint with the Western Cape Gambling and Racing Board, the provincial licensing authority that oversees licensees like Betway. Betway's response: a 'settlement' of R150,000 to withdraw the complaint. Gouws later tried to renege on the settlement and pay back the money because, he said, there was no provision for gambling addiction treatment. In response Betway referred him to the hotline number of the National Responsible Gambling Programme and indicated that the company was under no obligation to pay for such services. The judge said he did not understand the papers to say that Betway denied that it was through their products and how they conducted his account that Gouws became a compulsive gambler and an addict: 'What I understand them to deny, is accountability for the costs of his counselling assistance and rehabilitation.' Per Judge Thulare: 'When the respondent indicated that he sought treatment for his addiction and that the settlement agreement did not provide for his treatment at the applicants' costs, they [Betway] shouted 'extortion' and ran to court.' We asked Betway whether it had ever paid similar settlements to other complainants, but the company ignored the question in its response to us and instead said: 'This is a without prejudice, confidential matter. We do not, as a matter of policy, comment publicly on individual cases.' It added that 'responsible gambling is at the core of our operations'. Peas in a pod? To reiterate, Betway is being singled out simply because it is the major South African player for which the best data is available. Locally it may very well be trailing the equally ubiquitous Hollywoodbets, which is a private group controlled by its founder, Owen Brian Heffer. Survey research by consultancy Reveal has indicated that Betway and Hollywoodbets have roughly the same number of users, but that Hollywoodbets users tend to spend more on average, leading to an estimated gross gambling revenue of R16-billion per year. To be clear, this is our estimate, not Reveal's. We arrived at it by extrapolating from Betway's declared revenue of R11-billion in South Africa, noting that the waters are muddied by Betway's claims, as mentioned earlier, that the reference to 'South Africa' in its annual report doesn't actually refer to South Africa. Put together that would mean these two companies control up to 75% of the betting market. Hollywoodbets told us that it accepts that it is 'regarded as a leading licensed fixed odds and sports betting operator'. However, it said the industry 'is very fluid and very dynamic, and statistics are constantly changing. Therefore, we are unable to provide an accurate assessment of our market share.' The view from the top However, when it comes to online gambling, few gamblers are likely to understand the multinational nature of offerings on their smartphones, and in particular how these are increasingly directing their money to a shrinking coterie of truly gargantuan industry giants. Practically all online gambling sites provide access to a common suite of popular casino-type games. Online gamblers will probably all be familiar with Aviator or Gates of Atlantis and their multitude of imitators. These are licensed from a relatively small set of huge companies that practically all online gamblers indirectly pay money to. These include Habanero Systems, which is responsible for many of the casino-type games South Africans find on all the local platforms. It is owned by Dutch magnate Marcel Boekhoorn and his Ramphastos Investments. Another dominant player is Pragmatic Play, owned by Veridian in Gibraltar. The largest player on which much public information is available is Evolution, a truly staggering operation that has been gobbling up smaller competitors through acquisitions. The Malta-based company last year reported a profit of R25.7-billion and paid out an R11-billion dividend to its parent company in Sweden. Anyone playing casino games online probably contributed to the bottom lines of these companies. Our best estimate of how much money flows to companies like these again comes from Betway. Its royalties payments to providers of games amounted to 18% of all costs. That's a big chunk of the money being leeched out of the country. Asked about funds being sent offshore, Hollywoodbets told us that its contracts with service providers were private, but that it was 'important to emphasise that a substantial proportion of our online product offering is created by ourselves and/or local service providers'. This is, however, not the case with many smaller providers who seemingly offer very little apart from locally licensed platforms for these imported games. Unlike Betway, Hollywoodbets says that it has no international shareholding and 'accordingly, no profits are distributed outside of South Africa'. Born to lose Online gambling does not simply represent traditional gambling moving onto digital platforms. Even though the mainstay of the sector remains 'sports betting' this bears little relationship to the old tradition of bookies fixing odds before games. Instead the sector has come to rely on a kind of super-charged sports betting that is, according to some researchers, practically designed to foster problem gambling. It's called live or 'in-play' betting where gamblers rapidly bet on things like which team will score the next goal or which tennis player will win the next set. It basically turns sports betting into a video game where any rational appraisal of the odds (house edge) is practically impossible and players are encouraged to make rapid repetitive bets. A wide-ranging review of research published late last year in The Lancet canvassed all the ways in which the industry has become a major public health hazard, including these in-built design features. This encouragement of rapid repetitive betting has been called 'addiction by design'. It represents an entirely new category of gambling that is only really possible at scale online with vastly more destructive power that has left many regulators across the world reeling. Already years ago in 2018 one of the world's largest online gambling groups Bet365 reported that 80% of its sports betting revenue (that is, gamblers' losses) came from in-play bets. In-play betting is in fact the only kind of game specifically mentioned in the annual report of Betway's parent company Super Group. The company lists the possibility of this specific kind of betting getting banned in various countries as one of the distinct 'risks to our business', and coyly notes that 'in recent years an increasing percentage of sports betting wagering has been derived' from this more frenetic form of sports betting. The non-sports offerings that resemble casino games and increasingly so-called 'crash games' (like the popular Aviator) likewise activate very specific forms of what researchers call 'dark nudges' that encourage fast repetitive gambling. Betway told us that the alleged additional harm caused by online gambling was unproven: 'This is neither correct nor has this been proven to be correct. What we do know is that gambling, as a leisure pursuit, has existed throughout human history. Humans have consistently found ways to gamble. The responsible way of approaching it, therefore, is through responsible regulatory/licensing regimes.' Pre-historic regulation South Africa's gambling law is painfully outdated with the 2004 National Gambling Act pre-dating the entirety of the rise of the online gambling industry as we know it, and in fact predating the introduction of the first real smartphones. There have been a few false starts to update the regulatory regime, starting with a 2008 amendment bill that never got signed into law. The impulse behind that bill was, however, expressly to 'protect society against the stimulation of the demand for gambling'. In 2012 regulations were proposed that would outright ban advertising online gambling — something that has been instituted in many countries and, for instance, partially in Kenya where it is forbidden to promote gambling using celebrities or social media influencers. Similarly, in 2016 the Department of Trade and Industry (as it was then known) produced a policy paper that advised against permitting online gambling. The point of departure with 'new forms of gambling' was to ensure that the industry 'does not grow in such a way that may exacerbate social harms associated with gambling'. Added to that the reasoning had been that online gambling produces very little employment or actual investment. Neither the bill, regulations or policy paper were ever translated into law. The lack of meaningful job creation is tacitly acknowledged by Hollywoodbets, which told us that 'we hold the view that licensees who operate solely in the online space are missing the opportunity to make a significant contribution to job creation'. This is a swipe at competitors who do not, like Hollywoodbets, maintain a large network of physical branches across the country. The company as a whole had 6,685 permanent and 1,099 part-time employees, it told us. Betway told us it maintained 2,500 jobs in South Africa. But the most recent regulatory development takes a different tack and comes from the opposition benches. The DA first produced a draft Remote Gambling Bill in 2015, which was reintroduced last year practically unchanged and published for comments. This means it is already 10 years behind current industry developments. The draft bill proposes a new category of licence called a 'remote gambling licence' with its own set of rules. In response to questions the DA's spokesperson on trade, industry and competition, Toby Chance, told us that 'it should be noted at the outset that [the bill] has not yet been introduced to the National Assembly and has only been published for public comment… Accordingly, the bill is not in its final form, and should not be taken as such.' It is just as well since the bill, on a plain reading, makes problematic proposals that will seemingly provide a massive boost for 'online-only' gambling companies like Betway, compared to those who also have physical infrastructure. This is because it proposes two different paths to getting a remote gambling licence. Companies that are currently 'online only' can simply convert their bookmaker licences. Companies with a physical presence, however, would need to apply from scratch and have their applications subject to 'economic and social development issues' as well as competition concerns. The relative free ride proposed for companies like Betway seemingly creates a massive discriminatory barrier to favour online players. The DA told us that 'we have received several comments from various stakeholders regarding these points during the public comment period, and are in the process of engaging with the same'. Hollywoodbets is not impressed by the bill. It told us that it 'did not submit comments on the Remote Gambling Bill, as respectfully, we considered the bill to be so flawed in terms of its drafting that we preferred to defer our comment until the next inevitable draft is made available'. Betway did submit 'comprehensive' comments on the bill, but added that the regulatory regime was, in its view, not at all outdated. 'The business has grown substantially within the context of the current regulatory regime over the past decade,' it said. Concerning the fact that Betway's major stakeholder is also a DA funder, the DA told us: 'Mr Moshal was not consulted in the design of the bill nor did he influence the timeline of the bill. The bill was initiated by Mr Geordin Hill-Lewis (then an MP) as far back as 2015… This does not take away from the fact that Mr Moshal is free, as any private citizen, to comment on the bill through the ordinary public participation processes, and such comments will receive equal attention to any other submission of this nature.' Fightback Current proposals to combat the spectacular rise of online gambling include advertising restrictions, as well as some variant of 'sin tax' like that faced by the tobacco sector. This follows trends across the world. The DA's bill, for instance, proposes a ban on daytime advertising on TV or radio and opens the door for any further restrictions on advertising the minister of trade, industry and competition may want to introduce through regulations. Considering the ubiquity of sponsorship for sports and billboard advertising there is scope for radical interventions. Gambling companies are unsurprisingly opposed to restrictions, and their main argument is that these would simply allow the illegal part of the sector to grow at their expense. There is, however, another possibly more fundamental issue, which is that the bill entrenches what is currently arguably a significant perverse incentive for provincial licensing authorities to actively promote online gambling. Province vs province South Africa has a fragmented gambling tax system with each of the nine provincial licensing authorities imposing its own tax on the industry. This is generally 6.5% — well shy of anything that might be considered a sin tax comparable to what the tobacco sector faces. It is fairly self-evident that for users it makes little practical difference in what province an online operator is licensed. Gamblers will be able to access its platform from anywhere. The reason it does matter is that the province where the operator is licensed is the one that rakes in the taxes — and the one tasked with regulating the licensee. Neither is trivial. There is an undeniable incentive to be the province that licenses and collects taxes, while the harms caused in other provinces are their problem. The National Gambling Board told us that it 'has consistently advocated for a harmonised national regulatory approach to prevent regulatory arbitrage or 'forum shopping' by operators'. The Western Cape and also to a lesser extent Mpumalanga are known as the premier issuers of licences for online operators. In fact the recent surge in gambling activity has largely been limited to licensees in these provinces. These two provinces do not have meaningfully different regulations but have rather proven to be far more proactive when it comes to clearing the regulatory path for online gambling companies. The sunny side The online gambling industry is quick to defend itself against the main criticisms it faces — a lack of economic benefit and the encouragement of destructive problem gambling. Hollywoodbets and Betway told us that their (and by extension the sector's) expenditure on sponsorships is no small thing, with Hollywoodbets calling the inference that it makes little economic contribution 'unfortunate'. 'It needs to be said that our business contributes massively to the provincial and national fisci. 'Ignoring icon brands like the Hollywoodbets Sharks and the Hollywoodbets Dolphins, we are particularly proud of our support for development teams in myriad sports, and particularly our support of women's sport… In addition, we play a leading role in our sector in the promotion of SMMEs through our Bambelela Business Awards programme.' Hollywoodbets also pointed to its significant funding of horse racing, which would otherwise potentially have been a failed sector. The massive marketing spend was also a lifeline for broadcasters and other parts of the media industry, it said. Betway likewise holds up its sponsorship of the Springboks, the SA20 cricket tournament and the Premier Soccer League among its major contributions, while also pointing towards the activities of its philanthropic Betway Cares Foundation, while Hollywoodbets likewise highlights its Hollywood Foundation. Given the enormous scale of what is essentially unproductive spending that creates few jobs and big problems, the real question is whether the companies' social spending is not simply a cosmetic plaster on a gaping wound. DM
