A Western Cape High Court ruling has pushed a South African online gambling dispute into insolvency law after a customer ran up more than R2.6 million in gambling transactions in less than a week. The spending far exceeded a R150,000 approved credit limit.
The case centers on an Investec private banking account, a temporary failure in the bank’s balance-check controls for certain tokenized transactions, and a defense that tried to frame the fallout as reckless credit. The court rejected that argument and granted a provisional sequestration order. The respondent must now return to court next month to show why the order should not be made final.
A six-day betting run that turned into a R2.6 million claim
The court heard that the respondent, identified as VZ, held an Investec Private Bank Account with an approved credit limit of R150,000. Investec had declined a request to raise that limit shortly before the events in question. An internal system issue then disabled balance checks for certain tokenized transactions. During that period, transactions went through even when available credit was insufficient.
Over six days in February 2025, the respondent made repeated online gambling transactions on Hollywood platforms. The processed total reached just over R2.6 million. The outstanding balance was recorded at R2,601,609.86. SMS notifications were sent as transactions were processed.
Investec treated the matter as insolvency, not a standard debt dispute. The bank argued that sequestration was necessary because the respondent could not repay the balance.
Why the reckless credit argument failed
In opposing sequestration, the respondent argued that the matter fell under the National Credit Act and that the bank had extended unlawful or reckless credit by allowing transactions beyond the agreed limit. He also denied committing acts of insolvency.
The court did not accept that position. Acting Judge S Yake found that reliance on reckless credit provisions was misplaced in this application. The respondent acknowledged that the approved limit remained R150,000 and that no formal increase had been granted. The court also treated the case as an insolvency proceeding, not debt enforcement under the National Credit Act.
The court’s task was not to decide whether a new credit facility had been lawfully created. It was to determine whether the legal requirements for provisional sequestration had been met.
Repayment proposals strengthened the insolvency case
After the bank demanded payment, the respondent offered to settle part of the debt and proposed paying the balance by April 2028. In court, those proposals worked against him.
The judgment treated the repayment plans and the inability to pay immediately as evidence of acts of insolvency under the Insolvency Act. The court found that Investec had established a liquidated claim well above the statutory threshold for sequestration. Reporting on the ruling notes that this threshold would have been met even if only the authorized R150,000 portion were considered.
The court also found the respondent to be factually insolvent, meaning his liabilities exceeded his assets. The judge criticized aspects of his financial disclosure, including a lack of clarity about proceeds from the sale of immovable property. That finding supported the bank’s argument that a sequestration process could benefit creditors through formal investigation of the estate.
Why the ruling matters beyond this account
The case arose from a system failure, a short transaction window, and one account holder’s gambling activity. Still, it shows how quickly payment breakdowns can move into insolvency proceedings once large volumes of transactions are processed.
For operators and payment teams, the ruling shows how upstream approval failures can escalate into creditor recovery actions rather than remain payment disputes. Once funds have moved and balances have accumulated, the focus shifts to solvency, creditor ranking, and recoverability.
A provisional order with a return date set
The order at this stage is provisional. The court issued a rule directing the respondent and other interested parties to show cause why sequestration should not be confirmed. The return date is reported as 25 March 2026.
The next hearing will determine whether the findings on insolvency and creditor advantage stand. If they do, the matter will move from a high-value gambling dispute into a finalized insolvency process with long-term consequences.
