Unemployment, low growth crises demand bold action
The latest unemployment figures paint a stark reality as another 237,000 South Africans lost their jobs in the first quarter with unemployment now at 32.9% (up from 31.9%). Some 8.2 million people are now unemployed, and on the expanded definition it stands at 12.7 million (43.1%).
This is further exacerbated by the IMF and Moody's recently downgrading South Africa's economic growth outlook for the year to around 1% at best, after growing at just 0.6% last year. The continued economic stagnation and rising unemployment is simply untenable, says Seeff.
The risks to the stability of South Africa far outweigh the Reserve Bank's overly cautious approach to inflation concerns, especially since inflation has trended around the bottom of the Reserve Bank's target range since late last year, falling to just 2.7% for March. This is below the target range.
The interest rate is still 100-basis points higher compared to the pre-Covid rate while the economy is stuttering and shedding jobs at an alarming rate. It should be noted too that the gap between the interest rate and inflation in South Africa is among the highest in the world, stifling growth.
Seeff says the prolonged period of high interest rates has demonstrably hampered economic growth and placed significant strain on the economy and property market. The recent marginal rate cuts have now proven insufficient to stimulate meaningful recovery within the property market with FNB recently reporting that sales volumes are still below pre-pandemic levels.
We have recently seen the Bank of England and the European Central Banks cut their rates by 25bps. While the US Fed kept its rates unchanged, that was expected given the impact of the US-China trade war. On this front too, progress has been made with recent meetings between the US and China and a temporary tariff relief deal.
That means the Bank's primary justification for maintaining high interest rates have now diminished, says Seeff. Inflation is below the target range, the global economy is settling, VAT has been scrapped, and after some volatility, the Rand has stabilised. There is therefore no reason for the Bank not to step in with a meaningful rate cut of at least 50bps. South Africa can no longer wait, the time for action is now.
Issued by Gina Meintjes
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Daily Maverick
27 minutes 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
The South African
6 hours ago
- The South African
Family business? Gayton McKenzie's son buys PSL club
Calvin Le John, the first-born son of Minister of Sport, Art and Culture Gayton McKenzie, is the new owner of PSL club SuperSport United – and South Africans are unsurprised at the 'convenience.' The news was announced by sports broadcaster Robert Marawa on the X platform. The club, which was reportedly sold for R50 million, will change its name to Siwelele FC. Its goal is to revive the glory days of the now-defunct Bloemfontein Celtics, which later became Royal AM. In an X post, Robert Marawa broke the news that SuperSport United had been sold to a new owner, Calvin Le John. The deal – which cost R50 million – took place through a closed bidding process. Interestingly, Calvin is the son of Minister of Sport Gayton McKenzie and reportedly changed his last name to avoid public scrutiny. Calvin now takes up the post of chairman of the PSL club. He wants to officially rebrand as Siwelele FC and fill a void that the now-defunct Bloemfontein Celtics left behind. Calvin Le John said in a statement: 'As Siwelele FC, we are privileged to have been given the responsibility of continuing with a rich winning tradition in the PSL. SuperSport and the MultiChoice Group laid an incredible 30-year platform that we wish to build upon, should we get the final vote of approval from the PSL Executive Committee'. SuperSport United's new owner is the son of Minister of Sport, Gayton McKenzie. The R50 million closed bidding deal has sparked controversy. Image via Facebook. Marawa said of the deal – and Calvin's relation to the minister: 'Football holds a special place in his heart. Siwelele FC is not just a club – it's a promise to the people of Bloemfontein. Calvin is not doing this for attention. He's doing it for legacy.' News that SuperSport United's new owner, Calvin Le John, is the son of Gayton McKenzie did not come as much of a surprise to South African football fans. Some have even accused the minister of having a hand in the closed bidding deal. Gayton Mackenzie is the real Mafia!🤣 — YourServant (@ArnoModd) July 3, 2025 According to a profile of the new PSL club owner, Calvin Le John changed his name several years ago in the hopes of also becoming a hotshot businessman like his dad. The eldest son of Minister of Sports, Arts and Culture, Gayton McKenzie, was entrusted with running the family's extensive business empire in the sectors of mining, transport, hospitality, entertainment, properties, and publishing. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
Daily Maverick
7 hours ago
- Daily Maverick
After the Bell: Capitec's Gerrie Fourie and the power of family in producing extraordinary people
I read once that producing really standout people in business, people who are extraordinarily successful, might require more than just two parents and a village. It requires their parents' parents too. One of the absolute joys of my chosen profession is that I get to speak to people who have managed to either occupy or create a really important position for themselves. When I meet such a person, I often wonder what went into making them extraordinary. Usually the most important factor is the person themselves, whether they have the maths skills, or the EQ and, most importantly, the sheer ambition and drive to succeed where others have not. Even the ubernerd Bill Gates, blessed with a middle-class upbringing and in the right age and the right place at the right time, had a huge amount of drive. He was prepared to do things other people did not do. I was reminded of that when I spoke to Capitec's outgoing CEO, Gerrie Fourie, on The Money Show on Wednesday. While researching his background for our conversation, I noticed that his full name is Gerhardus Metselaar Fourie. I've always found that for many South Africans, their middle name will tell you more about them, and their family, than the name they normally use. It's where many of us, myself included, carry our family history. So I started our conversation by asking him about it. Out came the most interesting story, about how his grandfather, who was from the Netherlands, was actually 'Gerhardus Metselaar'. And that 'Metselaar' means 'builder' in Dutch. More than that, he had been to visit his family's company in the Netherlands. Gerrie being Gerrie, he had even gone through their books from the early 1900s and could tell you how they did during World War 1. I read once that producing really standout people in business, people who are extraordinarily successful, might require more than just two parents and a village. It requires their parents' parents too. It can be about the conversations and the life experiences that your grandparents had that can help you succeed. I think there is something to this; families that are able to pass down experience and wisdom, and perhaps skills in managing money or farms, or even a cricket bat, might be able to produce extraordinary people. Quite often I will be speaking to someone and be suddenly reminded of someone else in public life. When I ask if they are related, sometimes they say yes, sometimes no. In our society we have also seen the most extraordinary social mobility in the past 30 years. People who are the children of security guards and domestic workers and miners and maybe police officers have become important business leaders. Our previous and current presidents are the sons of a police officer and a domestic worker, respectively. While they have done it without the benefit of a comfortable middle-class upbringing, they have also often had to do it without the continuity of a long-term family. Jacob Zuma did not know his father, Cyril Ramaphosa has spoken of how his communities were broken up by forced removals during apartheid. As a parent, I feel it is a duty to pass on as much as I can to my two children. The fact that private schools can charge what they charge is proof that just about everyone else also believes this. Now, one of the biggest problems facing our country, and many others around the world, is that finding jobs for younger people is getting harder and harder. Even China, the big economy we are told is taking over the world, cannot find work for about 15% of its young people. I think what people are trying to do now is create jobs for their children. Often in their own family companies, or whatever service it is that they provide. Quite recently I've noticed billboards advertising estate agents that are clearly mother-and-daughter establishments. Fathers help their children take over their trade. And in a good example of why middle-class networks still really matter, some parents will be finding ways to get their kids internships in law or accountancy firms. Others will keep their children in higher education for as long as possible. When I finished school a simple degree was considered enough. Now people are studying for years and years, as their parents encourage them to become as qualified as humanly possible. One of the consequences of this is that having young adults as children has become much more expensive. You now need to educate them into their mid-twenties. You can't blame them; as a parent, you will do anything for your children. And, from what I can see, grandparents will do anything for their grandchildren too. They really want to see them succeed. How often have you seen older people getting together and discussing their children and grandchildren? I've sometimes come across an older person who knows my parents and discovered they know an awful lot about me.
