Casa is now working hard to ensure tax revenues from legal gambling establishments are kept intact.
This follows Minister of Finance Nhlanhla Nene’s presentation during the 2015 Budget Speech that the country’s revenue was short R110-million, due to the thriving and rapidly growing illegal online gambling in South Africa.
Themba Ngobese, CEO of Casa, said South Africa relies heavily on tax revenue, with 34 per cent derived from personal tax and 20 per cent from corporate tax.
Any erosion of the corporate tax base means more of a burden for individual taxpayers.
“There is already talk of moving the VAT rate from 14 per cent to 15 per cent to inject an additional R16-billion into the economy and adding VAT to zero-rated foods as options,” said Ngobese.
He added that the legal casino industry in South Africa contributed R4.5-billion in tax revenue last year, which is a significant proportion of the country’s budget from just one business sector.
“Any erosion of this amount is a real issue for the country,” he explained.
He said casino revenues are already showing signs of contraction. Overall revenues grew by a mere 0.6 per cent in 2013/4, compared to the 10 per cent growth in 2012/3.
“While some of this reduced growth is certainly attributed to the overall slowing of the South African economy in the past 18 months, to a growth of one to two per cent, our evidence suggests that more aggressive illegal online gambling operators are targeting South Africans and taking revenue off-shore,” he said.
“It is a view shared by the Department of Trade and Industry, who expressed their concern about the harm being caused to South African citizens by unchecked illegal online gambling activities.
“We estimate that at least five per cent of the revenue contraction in 2013/4 was due to the movement of expenditure to offshore illegal online gambling entities.
“That five per cent loss of revenue equates to R110-m less gaming tax revenue this year for the country.
“Putting that loss of revenue into a more tangible format, R110-m could pay the salaries of an additional 594 school teachers; or equip around 11 000 school children with a computer tablet and broadband access for the year, a far better use of your online investment than giving your money away to an off-shore operation.”
Ngobese said the mass media campaign aimed at illegal online gambling operators, players and service providers has already yielded some good results.
The campaign, which includes online content, radio advertising and print adverts, has a tongue-in-cheek direct marketing style, calling on the public to invest in a harmless illegal business – a parable for giving hard earned personal income to illegal online casino platforms.
“We have already had some good reports to the Provincial Gambling Boards about illegal operations, which are currently being followed up by investigators in sting-operations,” said Ngobese.
Casa was established in 2003 and represents the interests of 95 per cent of the 37 legal, land-based casinos operating in the country.
