The South African Bookmakers Association (SABA) has called for a prohibition on prediction markets within the country due to concerns regarding the integrity of sports. In a press release published on Monday, SABA expressed unease about the unregulated rise of prediction market platforms in South Africa.
The statement referenced a News24 article dated July 19, which reported that more than R700,000 ($41,750) had been wagered on predicting the next mayor of Johannesburg through the platform Polymarket. SABA argued that these prediction markets should be treated like betting exchanges and should adhere to the same regulatory standards, making it clear that operators cannot bypass gambling laws by branding their offerings as forecasting markets.
SABA contended that any consideration of prediction markets must follow a thorough evaluation of existing gambling and financial market laws, along with key components such as anti-money laundering (AML) duties and integrity oversight mechanisms. Until such a dedicated framework for prediction markets is established, SABA categorizes them as part of the illegal market.
Concerns about integrity are paramount. SABA pointed to an April report from the International Federation of Horseracing Authorities (IFHA), which noted that prediction markets pose a "significant and emerging challenge for sports integrity." The IFHA findings suggested that such markets enable bettors to profit from the underperformance of participants, thereby heightening the risks to integrity.
SABA remarked, "These concerns become particularly acute when prediction markets extend beyond sports into political elections, legislative decisions, public appointments, regulatory outcomes, and financial events." The organization believes that South Africa currently lacks adequate monitoring capabilities to identify manipulative practices, creating a considerable regulatory void.
Additionally, SABA previously raised alarms regarding the North West Gambling Board's issuance of a betting exchange license, arguing that current laws do not explicitly permit such licenses. SABA views prediction markets as similar to betting exchanges, as they facilitate peer-to-peer betting without accepting betting risk directly. "There is a legitimate question as to whether existing gambling legislation authorises such activities at all," the association stated.
SABA also identified increased AML risks, as prediction markets can involve high volumes of peer-to-peer transactions across different jurisdictions. The association noted, "Where offshore prediction market operators are involved, South African authorities may have little practical ability to obtain transactional information or enforce compliance obligations."
Further concerns arise from the absence of responsible gambling measures that traditional operators are required to follow, such as self-exclusion systems and advertising limitations.
Another significant issue is taxation. "Without a dedicated framework, substantial gambling-related revenues leave South Africa without generating meaningful tax contributions or supporting local economic development," SABA warned.
In summary, SABA concluded that until South African gambling regulators develop a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, AML compliance, and taxation, prediction markets should not be permitted to operate in South Africa and should instead be regarded as exchange-style betting products falling outside the current legislative scope.
