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The R700bn sports betting industry has taken South African markets by storm

Jon Cherry
By Jon Cherry
19 Nov 2024
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With discretionary consumer spending down, many brands have chosen to drastically reduce their spending on marketing efforts to save money, and into this downturn have stepped the sportsbook companies.

Stepping into Cape Town International Airport, it is impossible not to be struck by the outsized presence of Eben Etzebeth’s image draped right up to the rafters of the building’s cavernous interior.

As one of their most prominent celebrities, Hollywood Bets must have offered a substantially weighty purse to secure the right to use Etzebeth’s image as a part of their ongoing advertising.

But considering what they, and other sportsbook companies, are spending on SuperSport media packages and sponsorships right now, his fee is no doubt just a small part of the total marketing investment being made to try to secure a majority share of the growing sports betting marketplace in South Africa.

Curious as to how big the “official, regulated industry” is in South Africa, I found a 2023/24 report, published by the National Gambling Board of South Africa, detailing some of the industry’s official statistics.

The National Gambling Board is mandated to keep tabs on all legalised forms of gambling in the country (as per the National Gambling Act No 7 of 2004) and tracks the performance of casinos, betting (horse racing and sports betting both on and offline), bingo and limited payout machines in each of the country’s provinces. 

For the FY2023/24 ending 31 March 2024 – South Africans placed an astonishing R1.1-trillion worth of legal bets (40% more than the previous year) with two-thirds of that money going to horse and sports betting activities. But clearly driving the industry’s recent success with more than R700-billion worth of legal bets is the biggest growth area in the industry, sports betting.  

It’s impossible for our brains to truly comprehend very large numbers, so to better contextualise how large a number a trillion is, consider that a trillion seconds is the equivalent of just over 31,000 years.

Looking back at the planet’s history, 31,000 years ago the Earth was going through the so-called Ice Age and humans were devising innovative ways to fashion basic tools and weapons from rock.

Fast-forward to 2020 and aided by a relaxation of the gambling regulations, a pandemic, (that forced everyone to stay at home and find ways to entertain themselves), and digital technology; the number of sports betting platforms increased exponentially. Four years later and just like Eben Etzebeth, sports betting now dwarfs all other forms of legal gambling activities.

sports betting South African trends in gross gambling revenue. (Graph: National Gambling Board of South Africa)



This is probably just the beginning for sports betting though. Sports betting is a rapidly growing entertainment category around the world and can be seen as the emergence of several key factors all converging and interconnecting with one another to create a unique entertainment product.

Combining digital media, gamification, sport and betting, brands like Hollywood Bets and Betway offer this compelling combination in slick apps that are always available and dynamic thanks to the use of data to personalise the gaming experience for users.

Players can stack and parlay bets – combining multiple wagers into the same bet – making the overall experience more fun and lucrative for punters and more profitable for bookies.   

The opportunity to further innovate and create an unlimited number of different games and user experiences in the future makes this an industry that has got the attention of many big media companies and sporting bodies who are eager to explore how they might successfully commercialise their assets.

The consumer ‘under pressure’


It’s not too hard to find companies in South Africa these days blaming their sluggish sales on the belief that “the consumer is under pressure”.

Rising inflation and elevated interest rates have, in theory, forced many households to re-evaluate how they spend their money. Economists will tell you that under inflationary conditions, discretionary spending (that would have gone to buying a new T-shirt, or a cup of coffee during a trip to the mall) gets redirected towards servicing debt. The banks appear to be the big winners, so too the gambling industry.

In a study done in Iceland just after the 2008 financial crisis, it was shown that “when people are experiencing financial distress during economic recessions and times of financial hardship, the possibility to improve their financial situation by winning large jackpots with low initial stakes becomes more enticing.”

With discretionary consumer spending down, many brands have chosen to drastically reduce their spending on marketing efforts to save money, and into this downturn have stepped the sportsbook companies.

They’ve snapped up a lot of the lucrative media slots available for popular sporting broadcasts. They’ve secured desirable sponsorships with popular teams, and they’ve signed many influential celebrities to further promote their products.

Competing for a share


What this means is that all other economic agents – companies and brands in divergent categories – are now competing directly with sportsbook brands for “a share”. 

Not just a share of the consumer’s wallet, but also a share of voice in the marketplace and, most importantly, a share of attention.

Millions of South Africans are clearly captivated by this new product which is effectively monopolising their economic intent.

What this development highlights is really poor decision-making on the part of brands that chose to downgrade their marketing investment over the past couple of years. The assumption was that while general economic activity remains subdued, downgrading active promotional activities would result in cost savings in lockstep with lower levels of turnover.

What brands failed to factor in was the entrance of a powerful new category disruptor that would occupy the vacuum created by their share of voice withdrawal.

Going head-to-head with a competitor like this, with so much forward momentum already factored into their market domination, to claw back some of that economic intent in their favour, is going to be remarkably difficult and expensive. DM

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