By Erasmus Hamunjela
The South African National Treasury has officially announced a proposal to introduce a 20% national tax on online gross gambling revenue, marking a significant legislative step in regulating and monetising a rapidly expanding digital betting market.
The public comment period closes this week, on 27 February 2026, after which Treasury is expected to hold stakeholder workshops before drafting formal legislation later this year.
South Africa’s approach reflects what many analysts describe as a “legalise-to-tax” model formalising a booming industry while attempting to generate an estimated R10 billion annually in revenue. The proposal is also framed as a “sin tax,” intended not only to collect revenue but to discourage excessive and pathological gambling.
For Namibia, the development raises an important question: will we follow a similar path, or continue on our more cautious regulatory trajectory?
Unlike South Africa, Namibia currently prohibits unlicensed online gambling under the Gaming and Entertainment Control Act of 2018. The Act, which fully commenced in December 2021, places strong emphasis on regulatory control and enforcement rather than expansion.
In fact, Namibia has been actively cleaning up its domestic gambling environment. Authorities have shut down more than 280 illegal gambling operations in recent years. A key legal milestone came in May 2025, when the High Court ruled that licensed operators must pay a 10% levy on profits, rejecting arguments that they should be exempt until all illegal houses are closed. The ruling reinforced the government’s position that compliance must proceed alongside enforcement.
Namibia’s current priority, therefore, is consolidating its land-based regulatory framework not expanding into online licensing.
However, while Namibia does not currently impose a dedicated online gambling tax, digital revenue capture may soon arrive indirectly.
Starting 1 April 2026, Namibia will implement an 18% VAT on imported digital services. Although not targeted specifically at gambling, this measure could potentially capture revenue from offshore betting platforms used by Namibians. In effect, it may serve as a “backdoor” mechanism to tax digital gambling activity without formally legalising it.
This approach contrasts with South Africa’s direct taxation model. While South Africa moves toward a 20% levy on gross revenue, Namibia may first test its digital VAT infrastructure before considering sector-specific legislation.
The broader tax environment also shapes the debate. Namibia’s top personal income tax rate remains at 37%, while the non-mining corporate tax rate is gradually being reduced to 28% for the 2026/27 fiscal year. In this context, introducing a dedicated gambling tax raises political and economic considerations.
Would an online gambling levy be seen as an appropriate “sin tax” targeting discretionary spending?
Or would it be perceived as additional fiscal pressure in an already high-tax environment?
South Africa’s proposed effective gambling tax burden could reach between 26% and 29% when national and provincial levies are combined. Namibia’s existing system relies on a 10% levy on profits for licensed operators, a structure fundamentally different from a gross revenue tax.
The distinction is significant. A tax on gross revenue applies regardless of profitability, placing greater pressure on operators and potentially influencing odds, payouts, and promotional structures.
Namibia’s approach remains rooted in enforcement and consolidation. South Africa’s strategy is revenue-focused and expansionary. Both models carry risks.
Legalising and taxing online gambling could increase transparency and revenue, but it may also expand participation and social harm. Maintaining prohibition limits formal growth, yet risks revenue leakage to offshore platforms operating beyond Namibian regulatory reach.
As South Africa advances toward drafting legislation later this year, Namibia will be watching closely. The regional shift may intensify domestic debate about whether prohibition remains sustainable in an increasingly digital economy.
For now, Namibia is choosing enforcement over expansion.
But as digital borders blur and fiscal pressures mount, the question will persist: should Namibia follow South Africa’s lead, or continue to chart its own, more cautious course?
