Responsible gambling messaging is ubiquitous across sport sponsorships and social media campaigns, yet South Africa’s sprawling informal gambling market continues to operate largely unchecked.
According to RelyComply, with the country’s appetite for gambling rising — spanning online gaming, casino floors, and horse racing — an estimated 30% of the public is thought to have used illegal gaming sites, potentially depriving the economy of as much as R10m annually.
The true scale of these underground markets remains difficult to quantify, but the upward trajectory of South Africans’ gambling habits is beyond dispute. That growth creates fertile ground for illicit funds to be concealed and recycled through the sector.
The shift to digital — with betting now as accessible from a smartphone or laptop as it once was from a high street bookmaker — only compounds the threat, making it easier than ever for criminals to launder proceeds through unregulated channels.
This is not a new problem, but it has long been treated as one. For the better part of two decades, gambling-related financial crime risks have been afforded little more than a passing glance.
Now, as new money laundering typologies threaten to leave the sector dangerously exposed, anti-money laundering (AML) can no longer be treated as a peripheral concern. Gambling firms, and the banks and payment providers they work alongside, must take a more proactive stance — before criminals consistently find ways to beat the house.
The Financial Intelligence Centre Act (FICA) recognises gambling’s positive contribution to the South African economy — through job creation and financial flows — and accordingly designates gambling institutions as accountable institutions with obligations to detect and report suspicious activity, regardless of where funds originate.
Yet the legislative framework underpinning those obligations remains outdated. All relevant provisions trace back to the National Gambling Act of 2004, with a planned 2008 revision still languishing unresolved in government — well before digital gambling tools became mainstream. Nine provinces operate under their own separate gambling statutes, creating a patchwork of rules that banks and media partners frequently misinterpret. Meanwhile, the National Gambling Board lacks the tools to adequately regulate offshore operators.
In 2023, consultations between the Financial Intelligence Centre (FIC), the State Security Agency, and the UK’s HM Treasury Technical Assistance Unit concluded that casinos posed a low risk for terrorist financing. While discussions with SABRIC have taken place around restricting payment access to illegal gambling platforms, regulators must intensify their round-the-clock monitoring of suspicious behaviour. The National Gambling Policy Council — a joint industry-government body — has reportedly convened just twice in the past eight years, underscoring the pace at which oversight has failed to keep up.
More than 2,000 illegal gambling operators are currently targeting South African consumers, many promoted through affiliate clickbait sites designed to drive betting volumes. A significant number of these operators are based in jurisdictions with weak AML and tax controls — including Curaçao, Malta, and the Philippines — complicating cross-border payment auditability and offering South African consumers little meaningful protection.
The scale of the challenge is further amplified by the country’s relentless growth in gambling activity and the volumes of hard-to-trace transactional data it generates. Gambling turnover reached R1.5 trillion in the 2024/25 financial year, according to the Daily Maverick, with 56% of bettors admitting to gambling out of financial necessity. Despite the government’s proposed 20% tax on online gambling — intended to both raise revenue and curb harm — without robust enforcement, players are likely to migrate to unlicensed offshore platforms rather than comply.
Conventional laundering methods remain prevalent within the gambling sector, flourishing wherever criminals can exploit regulatory grey areas, regional licensing inconsistencies, and inadequate AML controls for transaction monitoring. The FIC has flagged the interplay between online casinos, applications, and site operators as a sector-specific threat.
Structuring — or smurfing — remains a common tactic, with criminals splitting deposits across multiple accounts to stay beneath detection thresholds, across both regulated and unregulated platforms. Rapid fund movement, through payments and withdrawals cycled between legitimate business accounts and gambling operators, is another persistent typology.
Politically exposed persons (PEPs) and sanctioned individuals must be screened against account details and transaction patterns, yet advanced identity verification (IDV) is difficult to execute effectively within siloed AML systems. Compounding this, some patrons resist providing identification altogether, while criminal networks may resort to stolen identities to conduct transactions through third parties.
Anonymity tools are growing increasingly sophisticated, capable of circumventing biometric documentation and KYC checks for online gambling platforms. Virtual currencies add a further layer of opacity, particularly when routed through crypto mixers to evade monitoring. If even basic IDV measures cannot be enforced at the point of onboarding, criminals can scale laundering operations across online gambling channels unchecked — leaving the institutions responsible for flagging such activity exposed to enforcement penalties.
When laundering techniques are deployed across diverse digital gambling channels and jurisdictions, South Africa’s financial ecosystem must respond with enhanced due diligence and monitoring technology — capable of robust IDV and early detection of unusual betting and transactional behaviour.
Greater openness to partnerships with RegTech providers would allow South Africa’s accountable institutions to close the compliance gaps currently exploited by gambling-related launderers, while remaining agile enough to respond to evolving typologies — including crypto-based transactions, deepfaked identities, and decentralised finance.
Despite the steady rise in illegal gambling proceeds entering South Africa’s financial system, the national response has been too slow. Whether through an underprepared collaborative framework or an over-reliance on legacy fincrime reporting tools, the time has come to treat the gambling sector as a high-risk threat that continues to expand criminals’ digital capabilities.
Addressing the laundering risk requires financial institutions, FinTechs, and gambling operators to develop a shared understanding of emerging typologies and deploy AML systems built to tackle them. In doing so, they can satisfy the FIC’s increasingly critical scrutiny of the sector whilst protecting a market that has no desire to be heavy-handed in its approach to digital gambling’s growth — but rather to safeguard individual players and preserve the integrity of a financial system that has worked hard to strengthen its FATF standing.
The convergence of robust regulation and AML intelligence can meet the online laundering threat directly, creating space for commercial and financial opportunities to flourish — once proactive gambling AML becomes the standard, both domestically and across borders.
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