The South African Bookmakers Association (SABA) is advocating for a ban on prediction markets in the country due to concerns about sporting integrity. In a press statement released on Monday, SABA expressed its worries regarding the rise of unregulated prediction market platforms within South Africa.
The association referenced a July 19 article from News24 which reported that more than R700,000 ($41,750) had been wagered on the next mayor of Johannesburg through the platform Polymarket. In the view of SABA, these prediction market platforms should be treated the same as betting exchanges, arguing that operators should not bypass gambling regulations by branding their products as forecasting markets.
SABA believes that a thorough evaluation of gambling and financial market laws, along with considerations of anti-money laundering (AML) obligations and integrity monitoring systems, is necessary before recognition of prediction markets. Until a proper regulatory framework is established, SABA considers these markets part of the illegal market.
Integrity issues were also highlighted in an April report by the International Federation of Horseracing Authorities (IFHA), which labeled prediction markets as an emerging threat to sports integrity. The report indicated that these markets could allow bettors to benefit from poor performance, intensifying integrity risks.
These concerns are exacerbated when prediction markets venture beyond sports into areas like political elections and public appointments. SABA noted that South Africa currently lacks adequate monitoring tools to detect manipulation, creating a significant regulatory gap.
Additionally, SABA raised concerns about the North West Gambling Board’s licensing of a betting exchange, pointing out that current legislation does not explicitly allow for such licenses. They argue that prediction markets share similarities with betting exchanges, as they facilitate peer-to-peer betting without taking on betting risk themselves.
SABA further warned of increased AML risks associated with prediction markets, which handle numerous peer-to-peer transactions across various jurisdictions. The involvement of offshore operators may hinder South African authorities' ability to access transaction data or enforce compliance.
The association also noted that prediction markets do not adhere to the same responsible gambling requirements as traditional betting operators, lacking measures such as self-exclusion systems and advertising restrictions.
Another significant issue is taxation. SABA pointed out that without a dedicated regulatory framework, substantial gambling-related revenues are leaving South Africa without contributing to tax revenues or aiding local economic advancement.
Until South African gambling regulators enact comprehensive legal measures addressing licensing, integrity oversight, consumer protection, AML compliance, and taxation, SABA contends that prediction markets should not be allowed to operate in South Africa. They argue these markets should be treated as exchange-style betting products, which fall outside the current legislative structure.
