Online gambling in South Africa: the next big investment?

 

2015 was set to be a good year for online merchants in South Africa, as a change in legislation emerged which opened up new opportunities for the stock market.

In January, it was announced that online gambling would become legal in South Africa, presenting land-based casinos with an interesting opportunity. The Remote Gaming Bill was passed at the turn of 2015 by shadow trade minister Geordin Hill-Lewis, and now it is expected that it will be passed by Parliament over the course of the year.

Prior to 2015, gambling in South Africa was only legal in land-based casinos, or, perhaps interestingly, in online sportsbooks. Now, in a few months’ time, those games which are deemed “interactive” games by the 2004 National Gambling Act, including poker, bingo and casino games, will be legal.

It presents a huge opportunity for investors within South Africa, particularly given the popularity of online casinos. It is no secret that players in South Africa would get around the legislative obstacles by gambling – legally – at websites hosted in other countries.

Now, websites based in South Africa are already reaping the benefits of legal operations within the country. This has opened a whole new window of opportunity for a number of communities – players no longer have to worry about sites being shut down, losing their funds or banks refusing to process the funds they may have won.

So how can an investor get involved? Some of the biggest mergers in recent years have happened as a result of online casino sites acquiring others – for example, over the years PokerStars, which has a number of celebrity endorsement, has had many owners.

There is also the technology aspect to consider – online gambling, which has risen to a global revenue of $41.4 billion in 2015 (up from $7.4 billion in 2003), is largely gaining in popularity thanks to the provisions of gadgets that allow us to gamble wherever and whenever we want. It would make sense, then, to perhaps invest in a producer of mobile smartphones or tablets, in conjunction with an online gambling company.

Of course, this presents its own series of legislative obstacles, but with the recent change in law in South Africa, there’s no reason why investing in online gambling should not be a lucrative long-term plan. While technology develops, we’re in for an exciting future in the world of investment.

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