South Africa, Mar 2: South African consumers are in a stronger financial position than they were a year ago, buoyed by rising real incomes, lower inflation and easing interest rates. Retailers have benefited from improved spending, particularly on durable goods and discretionary items.But economists are warning of a fast-growing threat that could undermine those gains: a surge in online gambling that is diverting household income away from everyday spending — including groceries.According to data from the National Gambling Board, South Africans wagered an estimated R1.5 trillion in the 2024/25 financial year, with roughly 60% of that coming from online betting platforms.The scale of that spending has prompted concern from Standard Bank chief economist Goolam Ballim, who cautioned that the rapid rise in gambling expenditure could reverse recent improvements in household financial health and weaken broader economic growth.Consumers on firmer footing — for nowBallim noted that real incomes have grown by between 2% and 3% in recent months, supported by low inflation and modest economic expansion. At the same time, declining interest rates have reduced debt-servicing costs, leaving households with more disposable income.Another often-overlooked factor has been the strong performance of the Johannesburg Stock Exchange (JSE).
Rising asset prices have improved balance sheets, particularly for middle- and higher-income households, making consumers feel more secure and less defensive in their spending.This so-called “wealth effect” has encouraged increased spending on non-essential goods and services — a positive sign for retailers and the wider economy.A troubling shift in spending patternsDespite these tailwinds, Ballim said gambling is emerging as a troubling exception.Research by Standard Bank suggests that at least half of surveyed South Africans spend up to R500 per month on gambling. More concerning, nearly one-third spend over R2,350 monthly — a substantial sum in a country where income inequality remains high.The rapid growth of digital platforms, aggressive marketing campaigns and gamified betting apps have made online gambling more accessible and appealing, especially among younger consumers.Ballim warned that gambling differs fundamentally from most forms of consumer spending.“Unlike buying goods or services, gambling does not generate the same multiplier effect in the economy,” he explained. “It is largely a redistribution of income rather than the creation of new economic value.”In other words, money spent on gambling is not circulating through supply chains in the same way as spending on groceries, clothing or household items — categories that directly support retailers such as Checkers and Pick n Pay.
Groceries taking the hitSurvey data from Trade Intelligence reveals that grocery spending is the category most commonly sacrificed to fund online gambling. Among respondents who admitted to playing online “Vegas-style” games, groceries and household essentials were the top areas where budgets were cut. Fast food and takeaway spending ranked a distant second.The shift suggests that gambling is not merely replacing luxury purchases, but increasingly competing with basic necessities in household budgets.Ballim cautioned that rising gambling expenditure may also signal deeper vulnerabilities, as some consumers view betting as a way to supplement income in a challenging economic environment.Call for awareness and regulationThe economist said addressing gambling addiction requires a nuanced approach, noting that many countries have struggled to balance regulation, revenue and social responsibility.
He expressed hope that greater public awareness and targeted regulation could help mitigate the social and economic risks.“There needs to be consciousness around the social perils of gambling,” Ballim said, warning that unchecked growth in the sector could become a drag on economic momentum.For retailers and policymakers alike, the concern is clear: while rising incomes and lower interest rates have helped restore consumer confidence, the rapid expansion of online gambling could siphon off spending power — threatening not only household financial stability but also the broader growth outlook.
