The South African Bookmakers’ Association (SABA) has called on policymakers to urgently address the emergence of unregulated prediction markets, warning that these offshore platforms pose significant risks to consumers, sporting integrity, democratic processes and South Africa’s regulatory framework.
In a new position paper published today, SABA argues that prediction markets – which allow users to wager on everything from election outcomes and political appointments to economic indicators and sporting events – are, in substance, exchange-style betting products operating under a different name, and, when the legislative framework permits, should be regulated accordingly.
The paper follows recent reports that more than R700,000 was wagered on the selection of Johannesburg’s next mayor through offshore prediction market platform Polymarket, despite the absence of any South African licensing, taxation, responsible gambling safeguards or regulatory oversight.
According to SABA, prediction markets closely resemble peer-to-peer betting exchanges, where individuals bet directly against one another while the platform simply matches participants and earns commission. This creates many of the same policy, regulatory and integrity concerns that have long surrounded betting exchanges.
The Association notes that international integrity bodies, including the International Federation of Horseracing Authorities (IFHA), have consistently warned that products allowing participants to profit from losing outcomes or specific events can increase the risks of corruption, insider manipulation, match-fixing and criminal exploitation. When these markets extend beyond sport into politics, legislation and public appointments, they also create new risks for democratic integrity.
Sean Coleman, CEO of SABA says: “South Africa has spent years building a regulated gambling environment that protects consumers, promotes responsible gambling, combats money laundering and generates tax revenue. It would be a serious mistake to allow offshore operators to sidestep those obligations simply by calling their products prediction markets rather than betting.”
SABA also warns that many offshore prediction market operators fall outside South Africa’s responsible gambling requirements, self-exclusion systems, consumer dispute mechanisms, advertising restrictions, anti-money laundering controls and tax regime. The Association argues that this creates an uneven playing field for licensed local operators while exposing consumers to greater risks.
In its position paper, SABA recommends that South Africa recognise prediction markets as functionally equivalent to betting exchanges, prevent regulatory arbitrage, undertake a dedicated legislative review before considering any licensing framework, and adopt a precautionary approach until appropriate safeguards are in place.
“Technology will continue to evolve, but the principles of good regulation should not,” says Coleman. “If South Africa chooses to consider prediction markets in future, it should do so through a clear legislative process that places integrity, consumer protection, anti-money laundering and public confidence at its centre. Until then, these platforms should not be allowed to operate outside our existing regulatory framework.”