Tax on Gambling?

Understanding the Proposal in the 2026 South African Budget

The 2026 South African Budget has sparked widespread discussion around the possibility of a new tax on gambling, particularly online gambling. Unsurprisingly, many people immediately assumed this meant that SARS will start taxing gambling winnings. However, the reality is somewhat different.

The Current Position: Gambling Winnings Are Generally Tax-Free

Under current South African tax principles, occasional gambling winnings are generally not taxed. SARS typically regards these winnings as a “windfall gain” rather than income, meaning they fall outside the normal income tax rules.

For example, if someone wins money from the lottery, sports betting, or a casino, that amount would usually not be included in their taxable income, provided the person is not gambling as a regular trade or profession.

There is one important exception:
If a person gambles systematically and earns income from gambling as a business, SARS may treat those winnings as taxable income, similar to any other trade.

However, this is relatively rare and applies mainly to professional gamblers.

What the 2026 Budget Proposal Is Actually About

The proposal discussed in the 2026 Budget Review does not primarily target individual gamblers. Instead, National Treasury is considering a new national tax on online gambling operators.

The proposal would introduce a 20% tax on gross gambling revenue (GGR) from online betting and interactive gambling platforms.

Gross gambling revenue is essentially the amount retained by the gambling operator after paying out winnings to players.

In simple terms:

• Players place bets
• Some bets are paid out as winnings
• The remaining portion is the operator’s revenue

The proposed tax would apply to that remaining amount, not the winnings themselves.

Why Government Is Considering the Tax

The proposal is driven by two main concerns:

1. Rapid growth of online gambling
Online betting has grown dramatically in recent years, particularly following the pandemic and the rise of mobile platforms.

What Happens Next?

At this stage, the gambling tax is still a proposal. National Treasury released a discussion paper and invited public comment, with further consultations expected before any legislation is introduced.

If implemented, the tax would primarily affect online gambling companies, rather than individuals placing bets.

The Key Takeaway

Despite the headlines, the 2026 Budget does not introduce a direct tax on ordinary gambling winnings.

For most South Africans:

• Casual gambling winnings remain tax-free
• The proposed tax targets gambling operators, not players
• Any final legislation will likely still take time to implement

However, as the gambling industry continues to grow and digitise, it is likely that tax policy in this space will continue to evolve.