The South African Bookmakers Association (SABA) is advocating for a ban on prediction markets in South Africa due to concerns regarding the integrity of sports betting. In a statement released on Monday, SABA expressed alarm at the unregulated rise of prediction market platforms within the country.
The association referenced a News24 article from July 19, which reported that more than R700,000 ($41,750) had been wagered on who would become the next mayor of Johannesburg on the platform Polymarket. SABA is urging that prediction market platforms be treated similarly to betting exchanges and be subject to the same regulatory frameworks, arguing that operators should not evade gambling regulations by marketing their offerings as forecasting markets.
SABA insists that prediction markets should only be permitted after a thorough evaluation of gambling and financial market legislation, alongside considerations about anti-money laundering (AML) requirements and integrity monitoring systems. Until such a framework is established, the association believes these markets should be deemed illegal.
SABA highlighted an April report from the International Federation of Horseracing Authorities (IFHA), which described prediction markets as a significant and growing threat to sports integrity. The IFHA's findings indicated that prediction markets could enable bettors to profit from underperformance, thus posing heightened integrity risks.
This concern extends beyond sports, affecting political elections and other decision-making processes. SABA warned that South Africa currently lacks the monitoring capabilities to identify manipulation, leading to significant regulatory gaps.
Furthermore, SABA has previously raised issues regarding the North West Gambling Board's issuance of a betting exchange license, given that current legislation does not clearly authorize such licenses. The association contends that prediction markets function like betting exchanges by facilitating peer-to-peer betting without assuming betting risks themselves, raising questions about their legality under existing gambling laws.
Other issues cited by SABA include increased AML risks associated with prediction markets, which process a high volume of transactions across various jurisdictions. The association noted that it may be challenging for South African authorities to access transactional data or enforce compliance when offshore prediction operators are involved.
SABA also pointed out that prediction markets do not face the same responsible gambling regulations as traditional operators, which include self-exclusion systems and advertising limitations. Additionally, without a formal framework, South Africa may miss out on significant gambling revenues, which could otherwise support local economic development.
"Until regulatory authorities in South Africa implement a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, AML compliance, and taxation, SABA believes that prediction markets should not be authorized and must be regarded as exchange-style betting products that reside outside the current legislative scope," the association asserted.
