South Africa Faces Call to Ban Prediction Markets Over Integrity Concerns

The South African betting landscape is entering a period of significant tension as traditional operators push back against the rise of prediction markets. The South African Bookmakers Association, known as SABA, has officially called for these products to be treated as illegal until lawmakers can introduce a dedicated regulatory framework. According to the association, these platforms operate within a legal void, evading the oversight that governs traditional sports betting and casino operations. The concern is that prediction markets allow users to stake money on virtually any future event, ranging from political elections to corporate leadership changes.

SABA argues that the current absence of regulation leaves the door wide open for risks that traditional gambling laws were never intended to handle. Specifically, they point to the dangers of peer-to-peer exchanges where participants can profit from losing outcomes, which mirrors the systemic risks found in unregulated betting exchanges. The association emphasizes that without clear rules on licensing, integrity monitoring, and consumer protection, the growth of this sector poses a direct threat to the stability of the country's regulated gambling market.

Numbers and facts

The scale of the issue is highlighted by recent activity surrounding local politics. Reports indicate that over R700,000, roughly 41,750 US dollars, was wagered on the outcome of the Johannesburg mayoral race through the decentralized platform Polymarket. This level of speculation on public appointments is a primary concern for SABA, as it introduces potential conflicts of interest and ethical dilemmas that surpass standard sports wagers. The broader market context is equally staggering, with the National Gambling Board (NGB) reporting R1.5 trillion wagered in the 2024/2025 financial year, representing a 31.3 percent increase over the previous period.

"These concerns become particularly acute when prediction markets extend beyond sports into political elections, legislative decisions, public appointments, regulatory outcomes and financial events." - Spokesperson, South African Bookmakers Association (SABA)

Furthermore, SABA highlights that 62 percent of online gambling in South Africa currently stems from unlicensed operators. This high level of illegal activity makes the introduction of unregulated prediction markets even more volatile, as they lack anti-money laundering (AML) controls and do not contribute to the local economy through gambling taxes.

Background

The controversy reflects a global struggle to define where forecasting ends and gambling begins. In South Africa, no current legislation explicitly authorizes or licenses operators of prediction markets. This leaves regulators like the NGB and financial watchdogs in a difficult position, as neither has a clear mandate to supervise these hybrid products. The International Federation of Horseracing Authorities (IFHA) has previously categorized such markets as a significant challenge for sports integrity, noting that the ability to profit from negative outcomes increases the likelihood of corruption and insider trading.

SABA maintains that until a framework is established that addresses AML obligations, consumer safeguards, and taxation, these markets should be classified as illegal. The debate is one of the first major public challenges to the prediction market sector in Africa. While these platforms have gained international popularity, South Africa's regulated bookmakers are signaling that they see no room for them within the existing industry without strict legislative intervention. The recent launch of the NGB’s verification portal aims to help consumers identify licensed sites, but prediction platforms remain conspicuously absent from this safe list.

Why it matters for German players

For players in Germany, the South African debate serves as a crucial reminder of the importance of regulation. The German Interstate Treaty on Gambling 2021 (GlüStV 2021) provides a very narrow scope for what constitutes legal wagering, focusing heavily on consumer protection and the prevention of addiction. Prediction markets like Polymarket do not hold a license from the German GGL (Gemeinsame Glücksspielbehörde der Länder). Therefore, German residents using these platforms are operating outside of legal protections.

Legal casinos in Germany must adhere to strict limits, such as the 1,000 Euro monthly deposit limit and the 1 Euro per spin limit for virtual slots, all connected through the LUGAS system. Prediction markets often bypass these safety nets entirely. If a player in Germany experiences issues with a platform that lacks GGL oversight, there is no domestic legal recourse. The integrity concerns voiced by SABA regarding insider information on political outcomes are exactly why German regulators maintain such tight control over permissible betting markets.

What it means for GGL-licensed casinos

GGL-licensed operators in Germany benefit from a stable, though highly regulated, market environment. The rise of unregulated prediction markets abroad represents both a threat and a validation. It is a threat because it attracts players seeking higher stakes or forbidden markets, but it validates the GGL's conservative approach to integrity. For a licensed German casino, the focus remains on compliance and player safety. The South African situation shows that even established markets struggle when digital realities outpace legislation. For the GGL, the primary goal is ensuring that the 62 percent illegal market share seen in South Africa does not become a reality in Germany, which requires rigorous enforcement against unlicensed offshore entities.