The South African Bookmakers Association (SABA) is advocating for a ban on prediction markets within South Africa due to concerns regarding the integrity of sports. A press release from SABA on Monday highlighted the issues arising from the unchecked growth of unregulated prediction market platforms in the country.
The release cited a News24 article from July 19, which claimed that over R700,000 (approximately $41,750) was wagered on the identity of the next mayor of Johannesburg through the platform Polymarket.
SABA insists that prediction market platforms should be regulated like betting exchanges, arguing that operators should not evade gambling regulations by labeling themselves as providers of forecasting markets. The association believes that a comprehensive assessment of both gambling and financial market regulations is essential before considering the legality of prediction markets, particularly regarding aspects such as anti-money laundering (AML) obligations and integrity monitoring systems.
Until such an appropriate regulatory framework is established, SABA contends that prediction markets ought to be classified as part of the illegal gambling market.
Concerns over integrity have been amplified by an April study from the International Federation of Horseracing Authorities (IFHA), which identified prediction markets as a significant threat to sports integrity. The IFHA study pointed out that bettors could exploit situations where an individual or team underperforms, heightening integrity risks across various domains. SABA echoed these concerns, 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 believes South Africa currently lacks effective measures to detect manipulation, creating a “substantial regulatory blind spot.”
SABA has previously criticized the North West Gambling Board’s creation of a betting exchange license, arguing that current legislation does not explicitly authorize such licenses. They view prediction markets as operating similarly to betting exchanges since they facilitate peer-to-peer betting without accepting betting risk directly. SABA stated, “There is a legitimate question as to whether existing gambling legislation authorizes such activities at all.”
In addition to integrity issues, SABA pointed to increased AML risks associated with prediction markets, which enable high volumes of peer-to-peer transactions across jurisdictions. The association warned that when offshore prediction market operators are involved, South African authorities may struggle to obtain transactional information or enforce compliance with regulatory obligations.
Another significant concern raised by SABA is the lack of responsible gambling measures in prediction markets compared to traditional operators, which typically implement systems for self-exclusion and restrict advertising.
The issue of tax implications was also highlighted. The association noted, “Without a dedicated framework, substantial gambling-related revenues leave South Africa without generating meaningful tax contributions or supporting local economic development.” SABA concluded, “Until South African Gambling Regulators have enacted a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, anti-money laundering compliance, and taxation, 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."
