- Responsible gambling
- Prevention of criminal activity
- Economic benefits
- Promoting technological Innovation and market stability
- International cooperation and harmonisation
Effective onshore regulation promotes responsible gambling to protect consumers from harm. By comparison, unregulated gambling markets are prone to exploitation, addiction, and criminal involvement.
Estimated tax revenue lost to offshore operators over the next five years
Africa has underdeveloped regulation compared to other parts of the world, and H2
estimates that unregulated sports betting and iGaming markets, if unchanged, will result
in over $11bn of lost tax revenues leaking offshore over the next 5 years. How is online gambling regulated then?
Only c.15 African countries currently have in place some form of online-specific gambling regulation. Of these, approaches vary widely with an unusually high focus on tax generation illustrating the need for better coordination.
Potential value of the African sports betting and iGaming market by 2029
Monopoly models are prevalent however onshore channelisation rates remain low in a number of markets due to the lack of market competition and also a requirement to use a single payment provider or aggregator, which leads to higher transaction costs and lower levels of product innovation.
With sensible regulation across the continent, H2 estimates that the African sports betting and iGaming market could be worth $22bn GGR by 2029. Of this, 90% (or c.$20bn) could be onshore with regulated operators.
Who regulates gambling in Africa?
Optimum market regulation is achieved when all stakeholders – government regulator, licensed operators and players – are in ‘perfect balance’, where effective government regulation, is balanced with operator commercial opportunity, and with good choice and value for money for players. Therefore, every stakeholder in the gambling industry is responsible for market regulation despite effective efforts from regulators. Here are a few notable regulation frameworks for online-specific gambling:
- Ghana: The National Gaming Act of 2006 overseen by The Gaming Commission of Ghana
- South Africa: The National Gambling Act of 2004 overseen by the National Gambling Board
- Tanzania: The Internet Gaming Regulation of 2022, enforced by the Gaming Board of Tanzania
- Uganda: The Lotteries and Gaming Act of 2016 overseen by the National Gaming Board
A well-regulated online gambling market consists of eight key components in general:
- Open licensing
- Affordable taxation
- Product availability
- Advertising and marketing reach
- Offshore enforcement
- Onshore education
- Consumer protection
- High channelisation rate
Only some, not all, of these are also applicable to the African land-based gambling market.
The online and land-based gambling markets are very distinct, but for the African online gambling industry, an illegal market operator is just one click away for the consumer. This means onshore, licensed operators need to be as competitive as possible for strong onshore channelisation, and therefore their ability to protect the consumer.