South African Bookmakers’ Association calls for ban on prediction markets amid integrity concerns

The South African Bookmakers Association (SABA) has called for prediction markets to be banned in the country amid concerns over sporting integrity.

In a press release issued on Monday, SABA voiced its concerns over the “emergence and growth” of unregulated prediction market platforms in South Africa.

The release referenced a News24 article from 19 July, which claimed over R700,000 ($41,750) had been wagered on who would be the next mayor of Johannesburg, via the platform Polymarket.

SABA stated prediction market platforms should be recognised as and face the same regulatory standards as betting exchanges, with operators unable to circumvent gambling regulations by labelling their products as forecasting markets.

According to SABA, prediction markets should only be considered following a comprehensive review of both gambling and financial market legislation, as well as other aspects such as AML obligations and integrity monitoring frameworks.

Until a dedicated framework exists for prediction markets, SABA said they should be treated as part of the illegal market.

Integrity concerns

SABA highlighted an April study by the International Federation of Horseracing Authorities (IFHA), which categorised prediction markets as a “significant and emerging challenge for sports integrity”.

The IFHA report claimed predictions allow bettors to profit from underperformance, potentially leading to increased integrity risks.

SABA echoed that sentiment, pointing out: “These concerns become particularly acute when prediction markets extend beyond sports into political elections, legislative decisions, public appointments, regulatory outcomes and financial events.”

It believes South Africa lacks the monitoring capabilities to detect manipulation, creating “a substantial regulatory blind spot”.

North West Gambling Board’s exchange licence

SABA previously expressed concerns over the North West Gambling Board’s offering of a betting exchange licence, as existing legislation doesn’t “expressly authorise” betting exchange licences.

In SABA’s view, prediction markets operate similarly to betting exchanges in that they don’t accept betting risk themselves, instead facilitating peer-to-peer betting.

“There is a legitimate question as to whether existing gambling legislation authorises such activities at all,” SABA declared.

Other concerns

The association also flagged heightened AML risks, as prediction markets facilitate large volumes of peer-to-peer transactions while operating across multiple jurisdictions.

“Where offshore prediction market operators are involved, South African authorities may have little practical ability to obtain transactional information or enforce compliance obligations,” SABA outlined.

Finally, prediction markets have not been subjected to the same responsible gambling obligations as traditional operators, such as self-exclusion systems and advertising restrictions.

There’s also the tax question.

“Without a dedicated framework, substantial gambling-related revenues leave South Africa without generating meaningful tax contributions or supporting local economic development,” the association added.

“Until South African Gambling Regulators have enacted a comprehensive legal framework addressing licensing, integrity monitoring, consumer protection, anti-money laundering compliance and taxation, SABA submits that betting prediction markets cannot and should not be authorised to operate in South Africa and should be treated as exchange-style betting products falling outside the scope of the current legislative framework,” the association warned.