Gambling Industry Sets Its Heart on Africa

Africa gambling card

As the popularity of online gaming rises in South Africa, operators are predicting a positive outlook for online-friendly platforms that already exist.

The case of South Africa

Over recent years, the popularity of online gambling in South Africa has been on the rise. Previously, legal restrictions made it difficult for people to take part in games of chance and skill, but that didn’t’ prevent them’ from participating all the same. Although wagering online still treads a fine legal line, younger South Africans openly admit to enjoying a bet on casino games and lotteries.

International cyber casinos offer South Africans more variety and higher rewards than the restricted offerings of their local “IRL” venues. Foreign iGaming companies and investors have noted the rise in demand within the sector and are exponentially increasing their investment to secure themselves a place within this rapidly growing market. Although South Africa may be somewhat late to the party, it is already proving itself to be a potentially big market for online operators as well as the players themselves.

The numbers

With demanding millennials making up the majority of consumers, Africa is definitely joining the global market at the right time. In 2014, gambling revenue in Africa bucked the wider economic trend and boasted its second-highest year-on-year growth on record, rising by 4.5% over the year. Projections of the market by 2020 are also very promising, with PwC predicting gross revenue from gambling to increase from R23.9bn ($1.9bn, £1.4bn) to R30.3bn ($2.4bn, £1.8bn), equating to a 4.8% annual increase for the period.

Comparing this overall growth with more traditional forms of gambling, such as the National Lottery – forecast to grow by a mere 1% over the same period – it is clear that growth in the African market is unlikely to affect all parts of the market equally. Sports betting is set to grow rapidly within the same period, but Bingo is set to be the biggest growing subsector. Between 2013 and 2014, the popularity of these games rose by 52.6% and revenue generated by the games is forecast to reach R2.7bn ($0.21bn, £0.16bn) by 2020, the ability to play these games online may explain their sudden growth in popularity.

““Africa has long been spoken of as the next frontier for the gaming industry. It appears now the wait is over, and Africa is very much open for business.”” – Warwick Barlett, CEO of GBGC speaking to the iGaming Times last month.

Moving towards mobile

The figures show growth in games that were traditionally played in casinos, but the online market is also growing, with the user experience becoming enhanced for punters playing on mobile devices in particular. Although certain gaming forms are yet to be fully legalized, well-established firms are openly interested in exploring the market and certain genres have been declared legal in South Africa for example.

Online casinos remain a legal issue since they were banned in the 2004 Gambling Act. However, bingo and lottery websites have been legalized, thus allowing that part of the market to start growing again as seen in the figures forecast by PwC.

Online gaming companies are also said to be interested in exploring the use of virtual reality in their online platforms, which could eventually lead to an online experience replicating that of a pre-2004 gaming session at a local casino.

In brief

The gambling industry in Africa is set to grow rapidly in the coming years, and recent figures show that growth is already taking place. The market may be impacted by the slower general economic growth forecast for the near-future, but industry experts unanimously agree that it will continue beyond 2020. If issues of legality were to be ironed out in South Africa, there is great potential for a boom in the online casino market as it is an area that is currently lacking, and big names will surely be looking to secure their share of a rising market.