Cryptocurrency has not only revolutionized finance, it has also made a significant impact across various industries, including gambling.
Cryptogambling is a form of online gambling that uses cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin.
Cryptogambling has been gaining popularity in South Africa, and more and more online casinos are adopting cryptocurrencies. However, cryptogambling regulations in SA are yet to keep up.
In this article, we’ll look at the emerging cryptocurrency gambling scene in South Africa, learn about existing regulations, and how to protect yourself from gambling online.
What is cryptogambling?
Cryptogambling is the use of cryptocurrencies (bitcoin, ethereum, litecoin) for online gambling activities, instead of traditional fiat currencies (rand, dollar, euro).
Players can use digital currencies to place bets on online casinos, sports betting sites, and poker rooms, among others.
This form of gambling has been increasing in popularity in South Africa, and in the world – the cryptogambling market is valued at USD 250 million in 2024, with a compound annual growth of 38%.
This might be thanks to the many benefits of cryptogambling over traditional gambling.
Cryptogambling Pros
Cryptogambling has become a favorite for gamblers because it provides anonymity, fast transactions, and lower fees.
Gambling in cryptogambling platforms often does not require a KYC or a know-your-customer process that is used in traditional gambling to verify the identity of players. This offers complete anonymity to players who value their privacy.
Related: Decrypting crypto: A beginner-friendly guide to cryptocurrencies
Cryptogambling also has the advantage of faster transactions. Players can deposit or withdraw funds faster because payments do not have to go through interbank transfers, unlike with traditional gambling.
Finally, cryptogambling platforms offer lower fees than traditional casinos. This is because it does not require intermediaries such as banks or payment processors.
Cryptogambling Cons
On the other hand, like any form of gambling, cryptogambling also poses some risks. The value of cryptocurrencies is extremely volatile, so the changes in price may affect the value of winnings.
Moreover, cryptogambling is a relatively new form of gambling, while crypto is developing exponentially fast. Therefore, regulations and consumer protection may lag behind.
There is also limited availability. While cryptogambling is growing in popularity, the market is still relatively small. Players may have limited choices in finding a reputable cryptogambling platform.
Is cryptogambling popular in South Africa?
In recent years, South Africa has seen a growing interest in cryptocurrencies. Bitcoin is at the top spot, with a 53% market share, while Ethereum, Litecoin, and Ripple are among the top most used cryptocurrencies.
Read more: How to Buy Bitcoin in South Africa in 2024
At present, SA is one of the leading countries in Africa for cryptocurrency adoption. According to a 2022 report by the South African Reserve Bank (SARB), the country had 13% of its population, or roughly 7.6 million people, were involved in cryptocurrency transactions.
This adoption has also been reflected in the popularity of online cryptogambling in South Africa. In the past five years, the average annual growth rate for online gambling in South Africa grew to 25%.
Some of South Africa’s biggest cryptogambling platforms have reported a steady increase in users since 2023.
While the market for cryptogambling remains new and niche, it is undeniably growing in popularity in South Africa and adopted for its convenience and privacy.
Are there cryptogambling regulations in SA?
Online gambling in South Africa is regulated by the National Gambling Board (NGB) and is overseen by the South African Reserve Bank (SARB) and Financial Sector Conduct Authority (FSCA).
The National Gambling Act of 2004 is a comprehensive legislation that regulates and licenses the gambling industry.
While it is specified for traditional forms of gambling such as casinos, sports betting, and lotteries, it can still be used as an umbrella guide for regulating cryptogambling.
Read more: What does the Financial Sector Conduct Authority Do?
In the National Gambling Act, it defined “gambling activities” as the following:
- placing or accepting a bet or wager
- making available for play, or playing a licensed gambling game
Furthermore, a “gambling game” is defined as:
- a game played upon payment of any consideration, with the chance that the person playing the game might become entitled to, or receive a payout
- the result might be determined by the skill of the player, the element of chance, or both
The Act also highlights what constitutes as prohibited forms of gambling such as offering unlicensed gambling services, and refusing minors in gambling premises.
While some of these definitions are applicable to cryptogambling, regulations remain ambiguous because the country has yet to specify laws that target crypto-based gambling.
The Act states that online casinos, and other interactive gambling are illegal in South Africa, except for sports betting. However, international online casinos still accept South African players, they are just not regulated by South African authorities.
When will cryptogambling be regulated in SA?
While there are still no comprehensive cryptogambling regulations available, efforts for a more comprehensive regulation of online gambling have been introduced.
Related: Everything You Need to Know About the Cryptocurrency Regulations in South Africa
The Remote Gambling Bill was published in November 2024 and introduced to the parliament. It aims to regulate interactive gambling, and provide more uniform norms and standards for remote gambling.
While this proposed policy still does not tackle cryptogambling specifically, it is a crucial step to build on creating a safer and more enjoyable gambling environment for cryptogamblers.
How do I protect myself from cryptogambling scams?
The world of cryptogambling is certainly enticing, but it’s also full of potential risks, especially in an unregulated environment.
In order to protect yourself from scams, be sure to research the cryptogambling website properly before depositing any funds.
First, the website must be licensed by a reputable gambling authority. If you are from South Africa, global cryptogambling platforms are likely regulated by other countries.
Second, check the platform’s reputation. You can check reviews and feedback online, in community forums, or on social media. You can also look at independent reviews on review websites.
Finally, look for Provably Fair certifications. Provably is a system that allows players to verify the fairness of the game results using blockchain technology. Therefore, fellow gamers can verify results to avoid cheating and to confirm results for other players.
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As a side note (but also important), be sure to withdraw periodically to minimize the risk of losing your funds. Never keep large sums of cryptocurrency in your gambling account, as this exposes you to potential hacks or platform closures.
As cryptocurrencies and online gambling continue to evolve, it’s likely that the South African government will begin to take more concrete steps toward regulating cryptogambling. Until then, players should stick to reputable platforms and always prioritize security and fairness when engaging in cryptogambling activities.
