The South African Bookmakers’ Association (SABA) has called for prediction markets to remain outside South Africa’s regulated gambling sector until lawmakers introduce a dedicated legal framework, arguing that these products operate like betting exchanges and should not be authorised under current legislation.
The association issued a policy position paper after reports that more than R700,000 (US$41,800) was wagered on the selection of Johannesburg’s next mayor through the offshore prediction market platform Polymarket. According to SABA, this activity took place outside South Africa’s existing gambling regulatory framework and highlights growing concerns about unregulated betting products.
SABA compares prediction markets to betting exchanges
In its statement, SABA said prediction markets should be treated as exchange-style betting products because operators do not take the opposing side of a wager. Instead, they match participants with different views and earn a commission on trades.
The association said this model is functionally similar to betting exchanges, where users place opposing positions against one another rather than betting directly with the operator.
While prediction markets are often described as information or forecasting tools, SABA argued that participants risk money on uncertain future events with the aim of making a financial return. On that basis, it said these products fall within the broad characteristics of gambling.
Integrity concerns highlighted
SABA also warned that exchange-style betting products can create incentives that differ from traditional sports betting.
Unlike conventional betting, where customers generally back a positive outcome, prediction markets and betting exchanges also allow participants to profit when an event does not happen or when an individual or team fails. According to the association, this increases risks linked to match-fixing, spot-fixing, insider manipulation and interference in political or democratic processes.
The association said South Africa currently has no monitoring system specifically designed to detect or prevent manipulation involving political prediction markets. It described this as a regulatory gap that requires attention before such products can be considered for legal operation.
Questions over current legislation
SABA said South African gambling legislation does not expressly provide for licensing prediction markets.
The association has previously argued that betting exchanges do not meet the legal definitions of either bookmakers or totalisators because the platform itself is not a party to the wager. It also questioned the North West Gambling Board’s decision to issue betting exchange licences, stating that provincial regulators can only exercise powers granted by existing legislation.
The paper further noted that many prediction market platforms operate offshore and often use crypto-assets. According to SABA, this creates additional anti-money laundering challenges because South African authorities have limited access to transaction records and limited enforcement powers over foreign operators.
The association also said consumers using unregulated platforms do not benefit from safeguards available through licensed South African bookmakers, including responsible gambling measures, self-exclusion programmes, dispute resolution processes and contributions to the National Responsible Gambling Programme.
Five recommendations for regulators
SABA outlined five recommendations for policymakers.
It called for prediction markets to be recognised as exchange-style betting products and assessed under the same standards as betting exchanges. The association also said operators should not avoid gambling regulation by describing their services as forecasting or information markets.
In addition, SABA recommended a comprehensive review covering gambling laws, financial market legislation, electoral laws, consumer protection rules, anti-money laundering obligations and integrity monitoring frameworks before any regulatory changes are considered.
Until such a framework is introduced, SABA said prediction market operators should be regarded as part of the illegal offshore gambling market. It added that any future regulation should prioritise sporting integrity, democratic integrity, consumer protection, anti-money laundering controls and public confidence in South Africa’s regulated gambling sector.
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