Prediction Markets: Why SABA Wants South Africa’s Gambling Laws to Apply

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Prediction Markets: Why SABA Wants South Africa’s Gambling Laws to Apply

Prediction markets are becoming a South African regulatory talking point after the South African Bookmakers’ Association called for products such as Polymarket and Kalshi to fall under gambling laws. In a policy position reported by Focus Gaming News, SABA argues that markets allowing people to stake money on uncertain outcomes look much closer to betting exchanges than to ordinary information services.

Phone, legal papers and balance scale representing the South African prediction-market regulation debate

Contents

SABA’s argument

SABA’s central point is that the label used by a platform should not decide the legal treatment of the product. If users stake money on a political, economic, social or sporting outcome and receive a financial return when their position is correct, the association says the activity has the core features of gambling.

The policy paper reportedly refers to more than R700,000 wagered on Johannesburg’s next mayor through Polymarket. That claim illustrates why the issue is not theoretical: people in South Africa may be able to access offshore platforms even when those platforms do not hold a South African licence, pay local taxes or provide local responsible-gambling protections.

SABA CEO Sean Coleman describes prediction markets as exchange betting products operating under a different label. The association is calling for a dedicated framework and a review of gambling, financial-market, electoral, consumer-protection and anti-money-laundering rules.

This discussion sits alongside Zamazonke’s explainer on betting exchanges and SABA’s concerns.

The risks regulators must assess

Integrity is one of the obvious questions. A market on an election or sporting event may be influenced by misinformation, insider knowledge or coordinated trading. Regulators would need to decide what monitoring is required and which events are unsuitable for wagering.

Consumer protection is another issue. A South African player using an offshore service may not have a local complaints route, clear identity checks or meaningful limits. It may also be difficult to recover funds or challenge a disputed outcome. Those gaps matter even if the platform describes the product as forecasting.

Anti-money-laundering and tax treatment would also need clarity. A legal framework could set expectations for customer verification, record keeping, reporting, advertising and taxation. It could also make clear whether an exchange-style product needs a betting, financial-market or hybrid licence.

The National Gambling Board is a useful official reference for South African gambling oversight, although the final treatment of prediction markets would require decisions by the relevant policymakers and regulators.

Why betting exchanges matter

Traditional bookmakers generally accept a bet and manage the risk themselves. A betting exchange connects participants who take opposite positions, with the platform charging a commission or fee. SABA says prediction markets use a similar structure: users trade views about an uncertain event while the platform facilitates the market.

That similarity does not settle the legal question by itself. The product’s rules, settlement process, customer relationship and financial features would need to be assessed. It does, however, explain why the association sees regulatory arbitrage as a concern. A platform should not be able to obtain a different legal result merely by changing its marketing language.

Our broader look at digital gambling regulation in Africa shows why new products can move faster than legislation.

What could happen next

SABA’s five principles point towards a precautionary approach: treat the product according to its substance, prevent regulatory gaps, review the relevant laws, be cautious about licensing and place integrity and consumer protection at the centre. That does not necessarily mean an immediate ban. It means the rules should be decided before the market becomes established.

For users, the practical lesson is simple. Do not assume that an offshore platform is legal or protected because it looks polished. Check who operates it, where it is licensed, how funds are handled and whether it offers real support to South African customers.

Responsible gambling note

Prediction markets still involve financial risk, even when the subject is politics or the economy rather than sport. Use only money you can afford to lose, avoid borrowed funds and never treat a forecast as guaranteed income.

Sources

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