The South African Bookmakers Association (SABA) has called for a ban on prediction markets in the country, citing serious concerns regarding sporting integrity. In a press release released on Monday, SABA expressed alarm over the rapid rise of unregulated prediction market platforms within South Africa.
Referencing a News24 article from July 19, which reported that more than R700,000 (approximately $41,750) had been placed in bets regarding the next mayor of Johannesburg through the platform Polymarket, SABA underscored the urgency of the issue.
The association contends that these prediction market platforms should be subject to the same regulatory standards as betting exchanges. SABA argued that operators shouldn't bypass gambling regulations by merely branding their offerings as forecasting markets.
SABA insists that any consideration of prediction markets must occur after a thorough assessment of gambling and financial market regulations, including Anti-Money Laundering (AML) requirements and integrity oversight frameworks. Until such a regulatory structure is established, the association believes that prediction markets should be classified as part of the illegal market.
Highlighting integrity worries, SABA pointed to an April study by the International Federation of Horseracing Authorities (IFHA), which identified prediction markets as a significant emerging threat to sports integrity. The IFHA report indicated that these markets allow bettors to gain from underperformance, raising potential integrity risks.
SABA echoed this assessment, stating, "These concerns become particularly acute when prediction markets extend beyond sports into political elections, legislative decisions, public appointments, regulatory outcomes, and financial events." The association indicated that South Africa currently lacks the tools necessary to monitor and detect manipulation, creating a substantial regulatory gap.
Concerns about the North West Gambling Board's offering of a betting exchange licence were also raised by SABA. The association noted that current legislation does not explicitly permit betting exchange licenses. SABA argued that prediction markets function similarly to betting exchanges, facilitating peer-to-peer betting without accepting betting risk themselves. "There is a legitimate question as to whether existing gambling legislation authorizes such activities at all," stated SABA.
Additionally, the association pointed out increased AML risks associated with prediction markets, which enable substantial peer-to-peer transactions across various jurisdictions. With offshore prediction market operators, South African authorities may find it challenging to acquire transactional information or enforce compliance obligations.
Moreover, prediction markets lack the responsible gambling protocols that traditional operators must abide by, such as self-exclusion systems and advertising restrictions. The issue of taxation is also significant. SABA noted that without a proper regulatory framework, considerable gambling-related revenues could flow out of South Africa without contributing to local tax systems or economic growth.
"Until South African Gambling Regulators have enacted a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, anti-money laundering compliance, and taxation, SABA submits that betting prediction markets cannot and should not be authorized to operate in South Africa and should be treated as exchange-style betting products falling outside the scope of the current legislative framework," the association warned.
