From Bets to Budgets: Affordability and Betting in SA

Switch on the TV, and you’ll be hard-pressed to find a sports team not endorsed by an online betting company. The online gambling market in South Africa is set to hit a revenue of USD 828.50m this year, with an estimated 3.6 million users by 2028.

As the wave of online gambling sweeps across South Africa, the importance of affordability analysis intensifies, impacting not only individual consumers but also shaping the trajectory of the betting industry and the nation’s economic landscape.

Leveraging Gathr‘s affordability analysis tool, let’s delve into the spending habits of South African consumers, unravelling the intricacies of their betting transaction.

Transactional behaviour of gamblers

South Africa has a diverse range of incomes, with sports betting typically attracting a lower LSM. To grasp how affordable gambling is for different individuals, it’s crucial to look closely at large segments of transactional behaviour.

Examining transactions from over a million South African consumers has uncovered some interesting insights. On average, a person who gambles puts in about R350. What’s notable is that 35% of all bets were less than R50, indicating a preference for smaller bet amounts. Surprisingly, at least 23% of these deposits happened even when the person’s bank balance was R0 or less.

This suggests that some people still choose to bet even when their bank account has minimal funds, which is why policies to prohibit this are so essential. When it comes to the timing of bets, it’s all dependent on the influx of earnings.

For some, they bet on the same day they get paid, especially if they receive their pay every week or every day. Towards the end of the month, there’s a noticeable increase in deposits, possibly linked to when people receive their monthly income.

According to TGM Research, the majority of betting happens during sporting events, with a significant 82% of African sports fans being interested in betting during the FIFA World Cup. These findings offer a glimpse into how people approach gambling and how it intersects with their entertainment needs and financial habits.

Cost of living & consumer Debt

Inflation is hitting a 13-year high in South Africa, leading to soaring prices for food and fuel. Alongside this, aggressive interest rate hikes are increasing home loan and debt payments for many. The rising cost of living, covering housing, healthcare, education, and transportation, directly impacts disposable income. Balancing the recreational value of gambling with avoiding excessive financial strain becomes crucial in these challenging times.

Looking at consumer debt levels, Debt Busters reports that as interest rates continue to rise, 65% of South Africans’ net income is used to service debt. High debt levels increase financial vulnerability, heightening the risks associated with gambling. Implementing regulations and educational initiatives becomes imperative for fostering responsible gambling practices in this challenging economic climate.

Affordability analysis – the key to healthy betting

“For betting companies, affordability analysis serves as a crucial tool, ensuring that individuals can genuinely afford to engage in betting activities.”

According to Christopher Ball, co-founder at Finch Technologies. This not only diminishes the risk of them losing all their funds in a single session but also plays a pivotal role in bolstering customer retention, as individuals are more likely to continue placing bets in subsequent sessions.

Additionally, delving into a bettor’s transactional behaviour empowers betting companies to pinpoint instances of over-betting. These insights enables the crafting of personalised saving strategies based on an individual’s affordability analysis, fostering a responsible gambling environment.

Enforcing affordability assessments for betting companies also holds significant benefits for the South African economy. By implementing these assessments, the practice works to diminish the number of individuals falling into debt due to excessive gambling.

Consequently, this proactive approach alleviates the burden on the South African economy, mitigating the social and economic consequences associated with elevated levels of consumer debt.

Here are a couple of proposed policy recommendations for betting companies:

  • Income-based gambling limits: introduce tiered gambling limits based on income levels to ensure that individuals with lower earnings are not disproportionately affected.
  • Financial literacy programs: implement comprehensive financial literacy programs to educate the public about responsible gambling practices and the potential consequences of excessive gambling.
  • Strict advertising regulations: enforce stringent regulations on gambling advertisements to prevent the glamourisation of gambling as a quick route to financial success.
  • Debt management initiatives: collaborate with financial institutions to develop initiatives or tools that assist individuals in managing and reducing consumer debt, thereby minimising the risks associated with gambling.
  • Community support services: allocate resources to bolster community support services for individuals and families affected by problem gambling, ensuring that assistance is readily available.

As online betting gains momentum, the challenges related to affordability are on the rise. Pioneering efforts from policymakers, fintechs, and online betting companies will be revolutionary, crucial for preventing the industry from becoming a burden on the South African consumer, pushing them further away from financial well-being. How can we collectively ensure a responsible and sustainable future for online betting in South Africa?


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