SABA Issues Statement on Unregulated Prediction Markets and Betting Exchanges in South Africa

On 27 July 2026, the South African Bookmakers’ Association (SABA) issued a statement asserting that betting prediction markets should neither be authorised nor considered under the current legislative framework because they fall outside the scope of existing laws and should be treated as exchange-style betting products.

A new frontier has emerged with the growth of unregulated prediction market platforms that allow South African consumers to wager on political, economic, social, and sporting outcomes outside the existing gambling regulatory framework, bringing with it a host of regulatory and ethical challenges.

Recent reports indicate that more than R700,000 was wagered on the selection of Johannesburg’s next mayor through the offshore prediction market platform Polymarket, an activity that occurred entirely outside the country’s existing gambling framework.

In response, the South African Bookmakers’ Association (SABA) has released a policy position paper arguing that these markets are not merely “forecasting tools” but are functionally identical to unregulated betting exchanges. Prediction markets allow participants to buy positions on the likelihood of future events, ranging from political elections and cabinet appointments to economic indicators and international conflicts.

While proponents often describe these as information markets intended to aggregate wisdom, SABA contends that because participants stake money on uncertain contingencies for financial gain, they fall squarely within the definition of gambling.

The association asserts that prediction markets and betting exchanges are functionally equivalent. In both models, the operator does not act as the counterparty or assume betting risk, instead, they simply facilitate matching opposing views between participants and collect a commission. SABA, aligning with the International Federation of Horseracing Authorities (IFHA), warns that these products create dangerous incentives.

Traditional betting typically requires a participant to wager on a positive outcome. However, exchange-style products, including prediction markets, allow participants to profit from losing outcomes, failure, or non-occurrence. This creates a direct financial incentive for activities such as match-fixing and spot-fixing in sports, insider manipulation and corruption of participants, and interference in democratic processes, such as influencing legislative votes or municipal leadership appointments.

Unlike the sports world, South Africa currently lacks a monitoring system capable of detecting or preventing manipulation specifically linked to political prediction market activity, creating what SABA describes as a “substantial regulatory blind spot.” A primary concern for SABA is that existing South African gambling legislation does not expressly provide for the licensing of prediction markets. SABA has historically maintained that peer-to-peer betting exchanges do not fit the statutory definitions of “bookmakers” or “totalisators” because the platform operator is not a party to the wager.

Read Also: SABA Pushes for Tougher Measures Against Illegal Gambling Operators in South Africa

SABA has also expressed concerns regarding the North West Gambling Board’s decision to issue “Betting Exchange” licenses, arguing that provincial regulators may only exercise powers specifically granted by legislation, which currently lacks such provisions. Because many of these platforms operate offshore and frequently involve crypto-assets, they present heightened Anti-Money Laundering (AML) risks. South African authorities have limited ability to obtain transactional records or enforce compliance from these offshore entities.

Furthermore, consumers using these unregulated platforms lack the protections afforded by licensed South African bookmakers, such as responsible gambling controls and self-exclusion systems, customer dispute resolution mechanisms, and contributions to local taxation and the National Responsible Gambling Programme.

To address these risks, SABA recommends:

1.  Recognition of Functional Equivalence

Prediction markets should be recognised as exchange-style betting products and assessed according to the same regulatory standards applied to betting exchanges.

2.   No Regulatory Arbitrage

Operators should not be permitted to avoid gambling regulation simply by describing their products as forecasting or information markets.

3.   Dedicated Legislative Review

Prediction markets should only be considered following a comprehensive review of:

•  Gambling legislation

•  Financial market legislation

•  Electoral legislation

• Consumer protection requirements

•  AML obligations

• Integrity monitoring frameworks.

4.   Precautionary Approach

Until a dedicated framework exists, prediction market operators should be regarded as part of the illegal offshore market.

5.    Integrity First

Any future consideration of prediction markets must prioritise:

• Sporting integrity

• Democratic integrity

•  Consumer protection

•  Anti-money laundering controls

• Public confidence in regulated gambling markets.