Online casinos have been rising in popularity consistently since they were first created. This has been aided by technological factors, from the invention of the internet itself to more recent milestones, including smartphones and streaming technology that have dramatically increased accessibility and led to the creation of live dealer tables. For South Africa, which already has an established brick-and-mortar casino sector and is the most advanced economy in Africa, online casinos represent an opportunity for economic growth beyond resource exploitation, agriculture, or manufacturing.
The Overall Economic Picture
South Africa is a large nation with varying types of climate and an abundance of natural resources in the form of mineral wealth. Gold and diamonds are jewels in the exporting crown of the nation, overall income is middling, and the country has generally good infrastructure when it comes to transport, water, and electricity. South Africa has the most advanced economy in the entire continent of Africa. This is thanks primarily to:
- Mining
- Agriculture
- Manufacturing
South Africa is classed as a middle-income country and has a growing middle class with increasing levels of disposable income. Despite this, it still has a very significant degree of income disparity which poses an economic and political challenge for policymakers.
South Africa’s Online Casino Sector
The more diverse an economy is, the more resilient it is against economic headwinds. South Africa is blessed with an abundance of gold and diamonds, which will never be worthless, but the price does rise and fall on global markets and a broader economic base helps not only with overall prosperity but provides a more stable foundation for growth. In common with all nations, the country has, therefore, sought to make the most of its online potential, including with the casino sector (an area of continuous global growth and, therefore, substantial prospects for the future).
In 2024, the South African online casino market is forecast to hit revenue of US$322m, rising to US$407m in 2028. On top of this, the number of players is anticipated by Statista to rise to 2.6m in 2028. However, this rise is marginal in percentage terms, with the percentage of users thought to rise only slightly (up 0.2% to 4.1% in 2028 from 2024). Average revenue per user is also predicted to rise, although at a slowing rate in future years.
While players in South Africa have access to land-based casinos, the convenience of online gaming often prevails, given the lack of travel time, the ability to play very short (or far longer) sessions, and being able to play from almost anywhere. In addition, brick-and-mortar casinos necessarily have a maximum limit on the number of games they can offer due to physical restrictions, whereas South African online casinos has no such cap. Furthermore, the absence of many overheads that apply to land casinos (heating, lighting, and so on) means that online casinos can give players a slightly better chance of finishing ahead while maintaining the same degree of profitability. Bonuses have become a fact of online casino life, with betting establishments competing with one another and providing customers with generous promotions.
Additional Perks
When it comes to banking, some nations in Africa have effectively leapfrogged the Western timeline of developing extensive branch networks and then closing many branches as mobile banking takes off. Similarly, South Africans (especially younger players) are keen on mobile gaming. Online casinos are likewise enthusiastic adopters of mobile technology, and nowadays, practically every game and casino platform is designed from the get-go to be fully compatible with mobile devices. This includes live dealer games, which use streaming technology to combine a real atmosphere with online convenience.
Regulatory overhaul has helped to create a positive operating environment for online casinos in South Africa. The sector also benefits from the pretty broad level of internet access (which is obviously the sine qua non condition for online casinos). And with more disposable income in the hands of a growing middle class, there remains large growth potential in the country. In turn, this means more revenue and more jobs and improves the overall economic picture.
Challenges Ahead
Although the infrastructure of South Africa is good, there have been shortages when it comes to power. An uncertain electricity supply is annoying for consumers and disconcerting for businesses, particularly those such as online casinos that cannot possibly function without a stable and constant flow of electricity. Resolving this matter is of great importance to South Africa if it wishes to maintain and grow its online business sector.
There have also been some downward revisions in growth forecasts by South Africa’s National Treasury. This has seen growth for 2023 of just 0.8%, compared to 1.9% in 2022. The economic difficulties faced by South Africa include common factors across the world, with interest rates and inflation generally higher than they had been for a long time in the aftermath of the financial crisis. From 2024 to 2026, the National Treasury has predicted an average growth of 1.4%. As belts tighten to take account of economic difficulty, this may eat into online casino profitability due to reduced disposable income as consumers naturally prioritise essential over discretionary spending.
To an extent, the reduced manufacturing in developed economies will be offset by better economic news from India and China, but the overall worldwide picture is still one of slowing growth. And rising oil prices also add to inflationary pressures. One of the biggest challenges for South Africa remains high unemployment (32.6%).
The country also faces significant income disparities and high crime. However, as the power network covers all urban and most rural areas, and English is a major language, online opportunities both in the casino and other areas are a potential way forward.
