Woodside Files for Arbitration in Senegal Over Sangomar Oil Tax
The company started producing oil last year from the offshore field, just as the government stepped up scrutiny of natural-resource contracts awarded to foreign investors to ensure they 'match Senegal's interests.'
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News24
3 hours ago
- News24
Chief with a Double Agenda: A hidden history now open to South Africans
'Chief with a Double Agenda is not just a book about Buthelezi,' writes Mandla J Radebe in his introduction to this republished work. 'It is a book about betrayal, ideology, class collaboration and the dangers of political amnesia. It is about the ways in which colonial and apartheid regimes co-opted segments of the oppressed to maintain power and how those collaborations were rationalised in the language of pragmatism. It is about the limits of reconciliation without justice and the costs of democracy built on silence and expediency.' Gatsha Buthelezi: Chief with a Double Agenda was first published in London in 1988 but was made unavailable in South Africa because of litigation threats by Mangosuthu Buthelezi (clan name Gatsha). Jacana Media has now republished this historic work to make it widely available, and it is News24's Book of the Month for July. Operating from within the South African government's apartheid systems, Buthelezi – Chief Minister of the KwaZulu homeland – presented himself as a leading opponent of apartheid but resolutely opposed the struggle for liberation led by the ANC and its allies. He preached a doctrine of non-violence yet headed the Inkatha movement, which was widely accused of using violence against its opponents. In contrast to the call of the worldwide anti-apartheid movement for sanctions against South Africa, Buthelezi toured Western capitals seeking new investments. Who was this man, and what did he stand for? Whose side was he on? Jabulani Nobleman 'Mzala' Nxumalo examined these vital questions in an analysis using a wide range of materials, including interviews with some of Buthelezi's contemporaries, to investigate a complex political figure. In this edited extract from the introduction, Radebe gives the background to his controversial figure and the book. BOOK: Gatsha Buthelezi: Chief with a Double Agenda by Jabulani Nobleman 'Mzala' Nxumalo (Jacana) In the complex and contested history of South Africa's national liberation struggle, few figures have provoked as much controversy or generated such polarising views as the late 'traditional prime minister' to the Zulu kingdom and the founder of Inkatha Freedom Party, Prince Mangosuthu Buthelezi (1928-2023). Revered by his followers as a traditionalist, nationalist, and statesman, and reviled by many within and beyond the liberation movement as a collaborator and reactionary, Buthelezi's political legacy remains entangled in contradictions. Nowhere are these contradictions more systematically dissected than in Jabulani Nobleman 'Mzala' Nxumalo's 1988 book Gatsha Buthelezi: Chief with a Double Agenda. Far from a conventional biography, Mzala's book qualifies to be regarded as a revolutionary polemic, influenced by Marxist-Leninist analysis and tradition, and intended not merely to inform but to also intervene. In this book, Mzala subjects Buthelezi to a public trial, ultimately indicting him as a political quisling – an African leader who, masked in the rhetoric of Zulu nationalism, eventually lent legitimacy to the apartheid regime's ethno-nationalist and divide-and-rule strategy. Indeed, it is difficult to imagine that such a characterisation wouldn't meet fierce contradictions. The publication of Chief with a Double Agenda marked a critical moment in the ideological contestation over the meaning of leadership, collaboration, and struggle for liberation in the latter years of apartheid South Africa. Mzala did not merely question Buthelezi's political choices, he denounced the entire edifice of the Bantustan system and its ideological underpinnings. In so doing, he exposed Buthelezi's role not as a tactical opponent of apartheid from within but as a vital cog in the apartheid state's infrastructure. Indeed, Buthelezi's association held strategic historical significance for the National Party, largely due to the demographic and symbolic weight of the Zulu kingdom, which the regime viewed as instrumental in legitimising and sustaining the broader project of apartheid. Mzala's thesis, delivered with precision and polemical force, rendered the book a political spectre – one that would haunt Buthelezi's public life until the very end. The significance of Mzala's intervention lies not only in its critique of one man but in what it reveals about the broader political conjuncture, particularly in the tumultuous 1980s. At a time when the apartheid state was facing internal revolts and international condemnation, and when elements within the liberation movement were debating strategies of armed struggle, negotiation, and mass mobilisation, Chief with a Double Agenda offered a sharp reminder that not all black leaders operated in the service of liberation. Mzala consistently advanced the argument that blackness, in and of itself, was not a marker of revolutionary consciousness and insisted that pigmentation alone, 'even if blacker than coal,' did not equate to progressiveness. Grounded in a Marxist-Leninist analysis of class collaboration and the national question, he categorically located Bantustan leaders such as Kaiser Matanzima, Lucas Mangope, and Patrick Mphephu within the camp of counter-revolutionaries, whose roles he viewed as antithetical to the objectives of national liberation. Equally, for Mzala, Buthelezi's insistence on operating within the apartheid-sanctioned structures, his leadership of the KwaZulu Bantustan, his opposition to sanctions, and his antagonism towards the United Democratic Front (UDF), represented not pragmatism but betrayal. It would be disingenuous to overlook the extent to which Buthelezi's legacy remains deeply contested, particularly in relation to his engagement with apartheid-era policies such as the Bantu Authorities Act (BAA). Enacted in 1951, the BAA constituted a foundational pillar of the apartheid state's ideology of 'separate development', systematically entrenching ethnic divisions by co-opting traditional leadership structures and institutionalising Bantustans as pseudo-autonomous entities under the firm grip of state control. Buthelezi assumed the chieftaincy of the Buthelezi 'clan' within the framework of this system in the early 1950s, a position that shaped his later political trajectory. As Chief Minister of KwaZulu, he projected himself as a vocal opponent of apartheid, even as he operated squarely within the architecture of the Bantustan system. This duality became a defining feature of his political identity and a source of enduring controversy among scholars, activists, and political commentators. While Buthelezi consistently defended his participation in the Bantustan system as a form of strategic resistance from within, many critics interpreted his role as calculated collaboration with the apartheid state. His refusal to accept nominal 'independence' for KwaZulu distinguished him from other homeland leaders, with Buthelezi arguing that such 'independence for the homelands was a government strategy aimed at stripping blacks of their South African citizenship' (JL Marshfield). Yet, notwithstanding this stance, his tenure was characterised by authoritarian governance and credible allegations of political violence, particularly targeting ANC-aligned structures such as the UDF. The findings of the Truth and Reconciliation Commission (TRC) further complicated his legacy, establishing evidence of collusion between Inkatha and the apartheid security apparatus. Some scholars characterised Buthelezi as a conservative nationalist who sought to 'use the system against itself' by operating within the confines of the apartheid framework and exploiting the margins of state tolerance in an effort, ostensibly, to subvert its legitimacy from within. Yet, his frequent appropriation of historical figures such as Pixley ka Seme to buttress his own leadership claims demonstrate the ideological ambiguity at the heart of his political project. This manoeuvring often placed him at odds with the broader liberation movement, particularly the ANC, which viewed his sustained engagement with the apartheid state as both politically damaging and ideologically suspect. Nowhere did these tensions find sharper expression than in Mzala's Chief with a Double Agenda, whose incisive critiques cast Buthelezi as a political actor deeply complicit in legitimising apartheid. As such, any serious engagement with Buthelezi's legacy must grapple with the dialectic of resistance and collaboration.
Bloomberg
3 hours ago
- Bloomberg
Angola Raises Diesel Price by 33%, Third Increase This Year
Angola raised the diesel price by 33%, the third increase this year as authorities press ahead with fuel-subsidy cuts that have been encouraged by the International Monetary Fund. The price will rise to 400 kwanzas ($0.43) per liter on Friday from 300 kwanza previously, the Petroleum Derivatives Regulatory Institute said in a statement late Thursday.
News24
7 hours ago
- News24
Online gambling explosion: SA's R1.14-trillion betting industry grows 550% in four years
Rocketing online gambling has become a major source of extraction from the South African economy. The boom is underpinned by regulatory failure, some cynical business practices, and paid-for visibility to profit off a mammoth new social ill. Behind the dazzling and addictive games lies a multi-billion-dollar industry with tentacles enveloping the entire world - and with its eyes squarely on the still largely untapped African market. 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 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 wifi 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 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 United States. READ | SA betting company slammed for naming 'winner' in ad – yet not paying prize 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 a total of around R96 million in declared donations to ActionSA, the DA, the IFP, and Build One SA. 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, likely 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 SA 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.' The source said: 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 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 which, 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 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 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 which 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 around 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 likely 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 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 are 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 SuperSportBet which has signed on 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. READ | High Stakes | Online gambling 'rife' at some private, wealthy public schools, says child protection activist 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 around 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 SA.' 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)'. [extract from the annual report: '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%'] 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. Supplied/Amabhungane Cost-wise there is no geographical breakdown, but Betway's global operations as a whole ploughs 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 the named individual beneficiary of trusts which 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 back-story 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 the company. 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 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 they 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 which 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. He said: 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'. It however said that 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 likely 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 which 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 which has been gobbling up smaller competitors through acquisitions. The Malta-based company last year reported profit of R25.7 billion and paid out a R11 billion dividend to its parent company in Sweden. Anyone playing casino games online likely 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 are private but that it is '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, Hollywodbets 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 which 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 canvased 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 increasing 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 then was) 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,not the policy paper were never 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 has 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: 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, 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 is, 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 added. 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 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 increase 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 licenses 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 a myriad of 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 is 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 which 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.
