Small retail and service businesses in the gambling industry, which depend heavily on non-essential spending, are increasingly reporting tighter margins despite stable foot traffic, despite the industry reporting R1,5 trillion in total wagers in the 2024/25 period.
The R1.5 trillion in total wagers in the 2024/25 financial period represents about R1.1 trillion from the previous year, while gross gambling revenue reached roughly R75 billion, according to national statistics released by the National Gambling Board.
The regulator’s reporting notes that “turnover reflects the total value of wagers placed and should not be interpreted as operator revenue,” highlighting the gap between headline betting activity and actual earnings retained within the sector.
The scale of wagering has raised questions about how discretionary consumer spending is being redistributed across the economy.
Katleho Mokoena, who owns a clothing store in Soweto, said spending patterns have become more cautious over the past year.
“Customers still visit regularly, but basket sizes are smaller. You can see that more disposable income is being channelled into entertainment and betting rather than apparel or lifestyle purchases,” he said.
The figures suggest that while overall consumer spending remains active, its allocation is changing. With household budgets under pressure from inflation and debt servicing costs, even modest shifts toward gambling can affect revenue predictability for SMEs reliant on discretionary purchases.
SME participation within the gambling value chain
Not all small businesses are losing out. Some SMEs operate directly within the gambling ecosystem through betting outlets, gaming lounges, payment processing services and digital affiliate platforms that facilitate transactions.
Nkosinathi Dlamini, who runs a licensed betting outlet in Umlazi near Durban in KwaZulu-Natal, said wagering volumes have increased significantly during major sports events and month-end periods.
“The transaction flow is strong and consistent, which supports stable cash flow. However, our income is commission-based, so higher betting activity does not automatically mean proportionally higher profit,” he explained.
This reflects the structure of the industry, where large licensed operators control betting platforms and regulatory licences, while smaller outlets act as agents earning a percentage of wagers processed. As a result, SMEs benefit from activity growth but remain constrained by fixed commission margins and operating costs.
Regulatory context and economic implications
Regulatory commentary accompanying the latest statistics emphasises that turnover growth primarily indicates rising participation rather than direct income gains for all participants in the value chain.
The National Gambling Board’s analysis distinguishes clearly between total wagers circulating in the economy and gross gambling revenue retained by licensed operators after payouts.
Economist Dawie Roodt of the Efficient Group said the scale of wagers provides insight into household financial behaviour.
“When wagering volumes rise sharply, it signals that consumers are allocating a notable portion of discretionary income toward risk-based entertainment, which can have knock-on effects for other consumer-facing sectors,” he said.
Uneven impact across SME sectors
The data points to divergent outcomes across the SME landscape. Businesses directly integrated into the gambling infrastructure experience steady transaction-driven income, while unrelated SMEs compete more intensely for limited discretionary spending.
Aisha Khan, who operates a beauty salon in Durban, said appointment frequency has become less predictable over the past year.
“Clients are still coming, but not as consistently as before. When household budgets tighten, and entertainment spending increases, services like hair and beauty are often postponed,” she said.
Structural outlook for small businesses
The latest figures show that South Africa’s gambling market is expanding in scale, but the financial benefits are distributed unevenly across sectors. SMEs positioned within the gambling value chain benefit from high transaction volumes, whereas traditional retail and personal service businesses face greater competition for consumer demand.
As wagering activity continues to grow, the key economic question is not whether consumers are spending, but where they are spending. The distinction between turnover and retained revenue suggests that while large licensed operators capture the bulk of financial gains, the broader SME economy experiences mixed outcomes shaped by shifting consumer priorities and constrained household budgets.
