31 OCTOBER 2025, CAPE TOWN
TOWARDS A DEVELOPMENTAL STATE: USING A REGULATED GAMBLING INDUSTRY TO DRIVE INCLUSIVE GROWTH AND TO SUPPORT ENTREPRENEURSHIP AND SOCIAL UPLIFTMENT
HOUSE CHAIRPERSON
HONOURABLE MEMBERS
MINISTERS AND DEPUTY MINISTERS
COMRADES
LADIES AND GENTLEMEN
GREETINGS TO YOU ALL!
HOUSE CHAIRPERSON,
While this debate has highlighted the root causes of the gambling industry crisis and the ensuing harmful effects thereof, I want to urge this House not to ignore the contributions this industry make to our economy. The gambling industry is neither an “enclave” nor a disconnected industry, operating separately from the rest of the South African economy. In short, the gambling industry plays a crucial role in the facilitation of what Alice Amsden terms “21st Century bit-driven economic growth”, which is a growth largely driven by ideas, data, digital information, and intangible services (both as means of production and objects of consumption) rather than by investment in machinery and physical assets oriented to the production of tangible goods.
The gambling industry contributes to bit-driven economic growth by leveraging the rapid acceleration of digital technologies for innovation and for gross gambling revenue generation. From gross gambling revenue, two streams of government revenue are created – gambling taxes as well as levies and gambling license fees – which accrue directly to provincial treasuries, with the Western Cape provincial treasury, under the DA administration, ranking in the top for gambling industry-related taxes and levies. This ironic because the DA depends on gambling industry taxes and levies, yet it pretends to be a moral crusader against the gambling industry in this debate.
HONOURABLE MEMBERS,
Tangible evidence exists to the effect that these gambling industry taxes and levies that flow into provincial treasuries’ accounts serve as a critical public finance instrument in the delivery of education infrastructure, transport and public works infrastructure, healthcare facilities, community facilities, and social protection programmes that benefit poor and working-class citizens who remain the motive forces of the ANC’s National Democratic Revolution (NDR). Perhaps most important of all is that the gambling industry taxes and levies broaden the fiscal spaces of provincial treasuries in a country that is confronted with weak gross fixed capital formation and in an environment where the national budget is constrained by persistent budget deficits and the ratio of public debt to GDP that is spiralling out of control. In such an environment, the gambling industry taxes and levies serve as the main lifeline of provincial treasuries, thereby enabling provinces to fund public infrastructure development and social services without raising regressive taxes since raising regressive taxes will be a misguided strategy in a country experiencing sky-high income inequality levels. Crucially, the gambling industry taxes and levies do not benefit from macroeconomic growth and consumer welfare and therefore provide countercyclical revenues for provinces, implying that even when South Africa’s low economic growth reinforces the long-term trend of sub-one per cent expansion, the gambling industry taxes and levies will remain stable for provincial treasuries.
Aside from serving as an important source of provincial income, gross gambling revenue account for a sizable share of grant and finance funding of the National Lotteries Commission (NLC), used to financially support black-owned Small, Medium, and Micro Enterprises (SMMEs), charities, arts and culture initiatives, and community upliftment projects that benefit the most vulnerable in rural and township areas across the country. For illustrative purposes, the National Lotteries Commission’s Board decided in February 2025 to commit R100 million to counter the termination of USAID funding and, consequently, this commitment will sustain HIV treatment and prevention programmes in the country. This demonstrates that the gambling industry revenues, under the ANC-led government, are not exclusively captured by private gambling operators; rather, the gambling industry revenues are reinvested back into the South African economy to advance socio-economic priorities through the National Lotteries Commission. This is one of the many reasons why the ANC treats the legalised gambling industry as part of its transformation and inclusive growth agenda.
HONOURABLE CHAIRPERSON,
The gambling industry is not just a mere leisure activity for gamblers. It is a service industry that generates both direct and indirect job opportunities for low-, semi-, and high-skilled labour force across its entire value chain, with positive spillover effects in the hospitality, transport, catering, and construction industries. In the 2023/24 financial year, the gambling industry was responsible for 144, 619 direct and indirect job opportunities in the country. This figure illustrates that the gambling industry remains the source of livelihood for the majority of the workforce in a country in which neoliberal economic policies have destroyed more local manufacturing jobs. Importantly, the centrality of the gambling industry is indicative of the ANC-led government’s commitment to placing the services and tourism industries as integral to a broader economic recovery and transformation strategy, as outlined in the Economic Reconstruction and Recovery Plan (ERRP). A regulated gambling industry can promote the growth of the tourism industry and, ultimately, attract foreign direct investment (FDI) in South Africa’s provinces that offer diverse tourist attractions.
Forward and backward linkages between the gambling and the tourism industries promote the development of rural and township economies through creating demand for local goods and services that are the “niche” of Small, Medium, and Micro Enterprises (SMMEs) owned by historically disadvantaged persons. These linkages demonstrate that the government’s economic regulatory power rather than the “invincible hand” of unregulated markets can create micro economic efficiencies by exploiting the linkages between the gambling and the tourism industries to empower rural and township economies. Linking the gambling and the tourism industries with rural and township economies is a catalyst for transforming the skewed patterns of ownership in the gambling industry – something that the DA, BOSA, and Rise Mzansi are reluctant to confront head-on because it contradicts their ideological posture and is at odds with their natural constituencies and funding networks. The bottom line is that these cited linkages embody the ANC’s economic thinking which contrasts sharply with the Washington Consensus thinking and the pervasive nature of its neoliberal policies supported by the DA, BOSA, and Rise Mzansi.
FELLOW SOUTH AFRICANS,
While the ANC acknowledges the socio-economic value of the gambling industry, it is not ignorant of its social and moral harms such as addiction, depression and anxiety, over-indebtedness, to name a few. Regardless of these cited social and moral harms and the fact that the ANC-led government is working tirelessly to reverse them through stricter regulation, the ANC rejects an outright prohibition of the gambling industry for one strategic reason. An outright prohibition of the gambling industry will undermine the ANC’s approach to a Capable, Ethical, Developmental State that is strong enough to enforce regulation to transform industries (including the gambling industry) in ways that uplift our people. As the ANC, we are convinced that South Africa will turn the rhetoric of a Capable, Ethical, Developmental State into a reality in the most immediate future. This will enable the state to be highly interventionist in correcting the imperfections of the gambling industry as a necessary condition for successful regulation of this industry so that it can contribute meaningfully to economic transformation, inclusive growth, job creation, and public revenue mobilisation.
IN CONCLUSION,
This motion for debate, sponsored by Rise Mzansi, was performative at best, and unconstructive at worst. Rise Mzansi had the opportunity to offer ground-breaking and cutting-edge practical solutions to the gambling industry crisis, and it missed it. It was made abundantly clear that Rise Mzansi drastically has a shorter thinking horizon and, consequently, long-term sustainable policies to address the gambling industry crisis has become a luxury that Rise Mzansi cannot afford. And, to state the obvious, the DA was saddled with contradictions in this debate – it was critical of a fast-growing epidemic of the gambling industry crisis, yet one of its donors is the owner of Capitec Bank which plays a central role in the ecosystem of the gambling industry crisis.
I thank you.