Public Hearings Begin on Gaming and Betting Tax in KwaZulu-Natal

The Finance Committee of the KwaZulu-Natal Legislature held the first public hearing on the bill to increase gaming and betting taxes in Pietermaritzburg on 10 November. Provincial Finance MEC Francois Rodgers tabled the bill in the legislature in June. Neli Shezi, Deputy Director-General of the Provincial Treasury, presented the bill to the committee in a packed hall.

The bill sets taxes for casino games, bingo, bookmaking and horse racing, and also adds new levies. The revenue will go to the province, and part of it will be transferred to the proposed Gaming and Betting Transformation Fund, which is intended to support new operators. Tax collected from horse racing will be reinvested in Umtelebhelo, the traditional horse racing event.

Katleho Thejane, manager at Goldrush Gaming Group, said bingo and casino operators were already struggling due to Covid-19, legal disputes and competition from online gambling. Thejane said, “The industry is currently under heavy pressure. If the proposed tax increases, which are over 300 percent, are approved, the industry could close.” According to the local newspaper The Witness, some operators pay around 3 percent of their earnings in tax. Businesses earning about R200 million (US$12 million) a year could face an effective tax rate of over 15 percent under the new framework. The provincial treasury expects the changes to bring in between R50 million and R100 million a year. Thejane, however, argued that the province could instead lose revenue. “The proposed increases could mean the provincial government does not receive a single cent. Some branches are closing right now,” he said.

Nqobile Kunene, a horse racing operator from eThekwini, said rural horse racing supports higher standards but faces shortages of infrastructure, finance and technical skills. Kunene said, “Let’s solve this before we introduce new standards and regulations.” Tim Brauteseth, finance spokesperson for the Democratic Alliance, which is part of the provincial government coalition, supported the bill. Brauteseth said it would ensure that potential revenue is not lost “through gaps or misinterpretation.”