South African province of KwaZulu-Natal to raise gaming taxes

The amendments include an increase in tax rates across the board, including items such as casino gaming tax, limited payout machine gaming tax, bingo gaming tax, and the betting tax on fixed odds bets on sporting events.

For casino tax, operators are expected to pay 9.85% tax on gross gaming revenue (GGR) which doesn’t exceed SAR12m (£560,000/€660,000). Revenue above SAR12m but under SAR30m is taxed at 11.3%. Revenue between SAR30m and SAR100m will be taxed at 12.5%, the same rate as before. The highest possible tax rate for casinos is for revenue of SAR100m or more, which is taxed at 14.05%.

Previously, revenue less than SAR30m was taxed at 9.5% and revenue above this total at 12.5%.

Tax rates for limited payout machine gaming were set at 15.25% of GGR, paid to the Provincial Revenue Fund. The highest tax rate for bingo gaming is R73.8m for revenue of SAR1bn or more.

The secretary for the KwaZulu-Natal Legislature, Letho Sibiya, said he doesn’t foresee such proposals being met with any objection, “given that the tax rates have not been revised for many years”.

Regarding tax revenue from horse racing, the amendment proposes that revenue be paid to other categories of licenced operators, rather than just to the operator Gold Circle as is currently the case.

The bill proposed category 1 licensed racecourse operators – those which conduct thoroughbred horse race meetings – should receive 1.6% horse racing tax revenue.

Category 2 operators who conduct harness racing horse race meetings, and category 3 operators who conduct standardbred horse race meetings should receive 0.2% each.

Another proposal suggested that a percentage of the tax revenues which are currently being paid into a provincial revenue fund should be funneled into a Transformation Fund for “specific projects to be undertaken by the licensee in accordance with a detailed project plan”.

For fixed odds betting, operators are subjected to a tax rate of 6.0%. 3.0% goes to the Provincial Revenue Fund, 1.0% to the Transformation Fund, 1.6% to category 1 operators, and 0.2% to category 2 and 3 operators.