Covid-19 has had a crushing effect on the gambling industry. Cancelled sporting events such as the Olympics and Euro 2020 have led to plunging revenues, while the forced closure of land-based casinos has crippled betting companies worldwide.

 

Macao’s Gaming Inspection and Coordination Bureau, for example, has reported almost 90% in lost revenues from February to May 2020. Las Vegas, where lockdown measures were not as severe, nevertheless saw a 40% drop.

 

In South Africa, the situation is no different. Tsogo Sun Gaming, one of the largest casinos in the country, for example, has lost 2 billion rand during three months of lockdown.

 

But perhaps there is light at the end of the tunnel; is the legalization of online gambling part of the solution?

The Effects of Closures 

We have already alluded to the effects closures have had on the casino industry. But the situation is far-reaching and goes beyond what happens at the blackjack table or roulette wheel.

 

It is estimated that casinos alone are responsible for 1% of South Africa’s economy. To put that seemingly low figure into perspective, it’s almost half of the agricultural sector. And the industry had been growing right up until the pandemic forced closures, with a 4% growth in the last year alone.

 

The crippling of the gambling industry will therefore have serious consequences on the economy as a whole. Lower tax revenues and job losses are of serious concern, for example.

 

Sun International, one of the leading betting companies in South Africa, has already (temporarily) laid-off workers while it operates at 50% capacity. How long before these temporary measures become a permanent addition to the country’s unemployment figures?

South Africans Are Going Online 

South Africans like to gamble. While land-based casinos have been closed and local options non-existent, off-shore betting companies have raked in the profits. There are plenty of websites promoting a variety of online casinos catering South Africans, but unlike their land-based counterparts, they are not generating revenues for the government or local communities.

 

Considering they are legitimate operations and South Africans cannot be prosecuted for gambling in this way, who can blame them? It would be more than fair to say that it is limiting options for the country’s average consumers, while at the same time restricting tax revenue and job opportunities.

Covid-19 has changed the landscape. Brick and mortar casinos will take a while to recover and perhaps they never will.

Reopening of Land-Based Casinos

After three months of gathering dust, casinos in the country once again opened their doors at the end of June. But it’s nothing like it used to be. Every second slot machine is out of action, and shields separate each client. Employees wear masks and protective shields, and alcohol-based sanitizers are readily available.

 

The reasons for the precautions are obvious and very much understandable, but they will likely exacerbate the financial pressures casinos are now under. With government regulations only allowing casinos to operate at 50% capacity, how will the industry recover?

The answer likely lies in the legalization of online casinos in South Africa.

Increased Tax Revenues 

In the United Kingdom, online gambling is fully legal. Companies like William Hill and Ladbrokes operate casinos and bookies that are household names. They and other betting organizations are responsible for significant tax revenues for the UK.

 

In the 2018/2019 tax year, for instance, HMRC (the equivalent to the South African Revenue Service) collected almost 3 billion GBP in revenue. The legalization of gambling in South Africa would lead to significant funds being made available for the government to weather the storm created by Covid-19.

Job Opportunities 

The closure of land-based casinos has led to many employees having to pack their bags. Dealers, cleaners, croupiers, waiters, security staff, and bartenders have all found themselves unemployed in large numbers.

 

Online casinos can help absorb the effect of these job losses. There are many opportunities that would be created, including live casino dealers, IT security specialists, customer support staff, coders for casino websites, copywriters for blogs and news items, and a range of other jobs involved behind the scenes.

Follow the United States, Legalize Online Gambling 

The United States previously had a hardline approach to online gambling. The American stance to betting is slowly mellowing, however. After a Supreme Court ruling, individual states are introducing legislation to enable online casinos to operate within the country.

 

The results are encouraging. Tax revenues are up, consumers have more choice, and job creation opportunities have been realized. South Africa should follow the United States and, as the proverbial saying goes, there is no time like the present for online gambling to be legalized in the country.

 

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