The Casino Association of South Africa, the official body that represents land casinos in the country, has issued an unprecedented attack on online gambling sites, the second time that the group has had scathing words against igaming. This week, the trade body accused the online gambling industry of causing revenue at land based casinos to fall, even going so far as to say that the country lost R110 million in tax revenue as a result.
These accusations were made by the chief executive of CASA, Themba Ngobese during an interview given to the South African Press Association news agency.
“South Africa relies heavily on tax revenue with 34 percent derived from personal tax and 20 percent from corporate tax,” said Ngobese. “Any erosion of the corporate tax base means more burden for individual taxpayers. There is already talk of moving the VAT rate from 14 percent to 15 percent to inject an additional R16 billion into the economy.”
Ngobese not only linked online gambling to a heavier burden on the masses, he also managed to paint a rosy picture of contrast pertaining to the land casino. He said that the legal casino industry in the country contributed over R4.5 billion in taxes to the government in the previous year, stressing that this was a significant amount for a single business sector.
CASA made other allegations – with no back up for their claims – that the online gambling industry was one of the reasons why casino revenues were impacted in 2013/2014. According to him, casino revenues dived from 10% growth in 2012/2013 to just 0.6% in the following period.
Other claims made stated that there was “evidence” that illegal online gambling operators had a policy to target South African gamblers that impacted growth, although a slow overall economy in the country in the past 18 months was also cited as a reason.
In recent months, the topic of online gambling in South Africa has made headlines, mainly due to the government’s apparent turnabout on its plans to legalize and regulate online gambling in the country. A government-appointed gambling committee made recommendations to Parliament that online gambling should be regulated, mainly in part due to the missed tax revenue that the government could be enjoying from this flourishing industry. However, in recent weeks, the government has said that it will not be adopting the recommendations at this time.