Sectors such as energy, mining and apparel often attract ESG scrutiny, and rightly so, given their environmental and social impacts. But another sector is expanding rapidly beneath the ESG radar, and in South Africa it deserves far more attention: gambling.
Legal gambling turnover reached R1.5-trillion in financial 2025, including re-bet winnings, a figure that illustrates the sheer scale of participation. According to the National Gambling Board, operators generated R74.5bn in gross gambling revenue (GGR), and almost 70% of that came from online betting platforms. Casinos, once dominant, now account for just 22% of GGR. Gambling has become frictionless: what was once a destination-based leisure activity is now an always-on digital product available on every smartphone.
This raises two questions: who is funding this growth, and what is its social impact?
The 2026 Sanlam Benchmark Survey offers sobering insights. Half of respondents in the online consumer sample had gambled in the past three months. For many, gambling is not funded from “extra” income. Two-thirds use their salaries or wages, while others rely on side-hustle earnings, credit, borrowed money and even two-pot retirement withdrawals. Investors should pay closer attention.
Gambling has largely escaped the scrutiny applied to industries associated with significant social externalities. Yet when money intended for food, transport, education or savings is diverted to gambling, households become more vulnerable to debt and financial instability. Gambling becomes not a creator of wealth, but a mechanism for redistributing it — often away from those who can least afford to lose it.
The socioeconomic backdrop amplifies these risks. South Africa’s unemployment rate reached 32.7% in the first quarter of 2026, youth unemployment exceeds 60%, and an estimated 45% of the population relies on social grants. In such a context, gambling can shift from entertainment to aspiration: 38% of Sanlam Benchmark Survey respondents say they gamble to generate income, while others cite stress relief or attempts to recover losses.
Gambling operators are structurally designed to profit over time regardless of individual outcomes. Revenues rise when customers lose. That’s a critical distinction in a country where millions already face financial strain. StatsSA reports that gambling accounts for 1.6% of household expenditure and dominates spending within the recreation and culture category.
Independent research suggests gambling losses may exceed R70bn annually, and studies indicate that about 20% of grant income may be spent on gambling. A third of people seeking help for gambling addiction are unemployed and dependent on grants. These costs are not evenly distributed. In a society marked by high unemployment and persistent inequality, gambling losses fall most heavily on financially vulnerable households.
Nearly one-third of Sanlam Benchmark Survey respondents say gambling has contributed to financial stress. The question is not whether gambling should exist, but whether investors are adequately assessing the long-term societal risks embedded in current growth trends. A business model increasingly dependent on vulnerable consumers carries regulatory, reputational and social risks that may not yet be reflected in valuations.
Other jurisdictions have acted. The UK has introduced stricter affordability checks; Italy has banned most gambling advertising; Australia has tightened restrictions during sporting broadcasts. South Africa should consider similar measures, including stronger advertising controls, enhanced age verification and greater transparency around gambling-related harm.
Investors can support these efforts through active stewardship. But ultimately, the debate is not about gambling itself. It is about what the industry’s growth reveals about South Africa’s economy. Given the reliance on social grants, youth unemployment and general poverty, the rise of online betting raises uncomfortable questions.
Does it reflect genuine prosperity, or growing desperation? The deeper issue is why increasing numbers of South Africans feel that placing a bet offers a better chance of financial progress than the economy itself.
Ayabulela Quzu is an impact and ESG analyst at Sanlam Investments
