The South African Bookmakers Association (SABA) has urged regulators to prohibit unlicensed prediction markets, arguing that they pose risks to sports integrity, consumer protection, anti-money laundering (AML) efforts and tax collection.
The trade association mentioned that prediction market platforms must adhere to regulations imposed on gambling exchanges; thus, they should not evade gambling legislation by claiming to be forecasting or information markets instead.
The association quoted a report published by the International Federation of Horseracing Authorities (IFHA) that referred to predicition markets as a looming threat to sports integrity. According to SABA, the dangers posed by these markets extend not only to the athletic world but also to elections, the selection of public officials, regulatory choices and financial events, where market manipulation may be difficult to identify.
SABA further questioned the current state of South African gambling legislation and the permissibility of the use of prediction markets. According to the association, the business model of prediction markets is similar to that of betting exchanges, as they operate by facilitating peer-to-peer betting.
The association also expressed concerns that illicit prediction market operators pose additional money laundering challenges and do not enable regulators to access to information and implement punishments.
The report concluded that prediction markets must remain prohibited until the regulatory body creates a comprehensive law governing licensing, consumer protection, regulatory monitoring, anti-money laundering procedures and taxation.
