Tax reductions ensure the gambling industry’s growth

Early in the day before the majority of businesses in Johannesburg’s city centre open a place called Top Bet on the corner of Market and Joubert street is full of life. Inside there is a large betting floor, full of people focusing on the horse races and their betting slips

This shop is one of four of Mike O’Connor’s Top Bet outlets which are spread around Gauteng, the other three can be found in Midrand, Northcliff and Boksburg, between them they employ about 80 people. Although business appears to be thriving, O’Connor who doubles as chairman of the South African Bookmakers’ Association disagrees, “It’s empty right now, During soccer season you wouldn’t be able to get through the door it’s so packed. It stays that way for the whole day, seven days a week.”

In recent times the Confederations Cup has been driving the sports-betting market, however now that the 2008/9 season is nearly over there are far fewer games being played. Of course, Top Bet allows you to bet on all sports, but soccer by far attracts the most wagers, the combination of the English Premier League, South Africa’s Premier Soccer League, Spain’s La Liga, Germany’s Bundesliga and the Danish league really keep things busy.

However, even though the online betting market is consistently growing, Top Bet is managing to stay healthily in business with a monthly turnover of about R12-million. The average wager size is R11.50 and according to O’Connor around 500000 bets for anywhere between R5 and R500 are placed at his shops each month.

O’Connor said that he’s “got people from Randfontein coming here, It’ll be like this the whole day. The thing is most people don’t like online betting because they have to deal with all sorts of money transfers, which take time. Here, you bring in your ticket and take your winnings the next day. Another factor is that most people don’t have access to the Internet.

O’Connor thinks that the reason the sports betting world is growing so much is mainly due to changes in betting taxed made by the National Gambling Board. In line with the trend being driven by the UK to abolish gambling taxes they have cut a 6% tax charged to all punters and now charge the bookmakers instead.

The National Gambling Board’s acting chief executive, Thebi Moja says that sports betting is picking up in pace but is a bit slower in South Africa. Moja said that, “When we realised that it was taking longer to grow (in South Africa), we realised it was the tax structure, punters were reluctant to place bets if they knew they’d be charged 6%.”

The new tax scheme has been in place since March 2008 but has only been adopted in Gauteng; this means that bookmakers across the country are sending their bets to be processed in the area.

As for O’Connor, he is hoping to open more branches, he is aiming for the townships where according to him people are desperate for more entertainment

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