Operator News

South Africa – South African casinos post year-on-year decline

By Phil - 19 October 2017

South Africa’s casinos saw revenue drop by 1.8 per cent over the last year, according to the Casino Association of South Africa (CASA) who has published its 12th annual survey of the South African casino industry.

The current industry comprises of 38 casinos, 981 gaming tables and 23,498 slots. Table revenue was down by 4.1 per cent with slot GGR falling by 1.1 per cent. Gauteng, home to seven casinos, accounted for 41 per cent, the largest share of the regional pie. Its GGR fell by 1.6 per cent. The biggest increase was felt in the Western Cape, home to five casinos, which saw growth of 5.3 per cent. The biggest decline was felt in the North West where GGR dipped by 22.1 per cent.

This year’s survey shows that, for the first time since the inception of the casino industry in South Africa under the new democratic dispensation, there was a decrease (1.8 per cent) in revenue. This decrease can be attributed only in part to the general economic downturn, with illegal gambling eroding substantial revenue from the legal operators. Despite this, the licensed casino industry made a significant contribution towards employment, social responsibility and infrastructure development, and continues to be a vital economic driver.

Dr Jabu Mabuza, Chairperson of CASA, said: “What emerges is a picture of an industry that, although displaying strengths in certain key areas, is undeniably facing a number of challenges. Some of these are beyond our control: for instance, the 1.8 per cent drop in gross gambling revenue (GGR) – a trend which sees the first regression in casino gambling revenue since the inception of the casino industry in 1997 under the democratic dispensation in South Africa – is primarily attributed to the erosion of gambling revenue by illegal gambling operators especially illegal online gambling operations which continue to grow unabated. Our current economic climate, has also had significant implications on how much money is available to consumers as disposable income and how they choose to spend it.”

CASA currently represents 36 of the 38 operational and legal casinos in South Africa. Besides promoting good governance within the industry, CASA also constructively contributes towards policy decisions that encourage growth and investment in both the industry and the country. To this end, CASA has been campaigning for better enforcement regarding illegal gambling operations for some time.

Dr Mabuza added: “Illegal gambling has dogged the South African gambling industry for years, to the detriment of the industry, government and South African society as a whole. Whilst we applaud the Department of Trade and Industry for its recent forfeiture of unlawful winnings of more than R1m in an effort to stop this scourge, we are of the view that far more work is required in this regard. We therefore urge the authorities for deliberate and concerted law enforcement effort to address illegal gambling in South Africa.”

In the face of such challenges, the industry remains committed to its customers and the communities in which they operate. In the year ended March 2017, CASA members supported over 64 000 quality jobs, distributing R3.5bn to employees. This represents 21 per cent of the R16.5bn value generated by the industry, a share second only to the R5,9bn received by local, provincial and national governments through various taxes and levies (36 per cent of value generated). In addition, CASA members invested R1.96bn in capital expenditure towards the improvement of their casino complexes during the year under review; an amount equalling 11 per cent of gross gambling revenue.

CASA members have always been incredibly committed to Corporate Social Investment (CSI) and have, over the past five years, contributed R712m in focus areas such as education, health, sports, arts and culture, the environment and, of course, responsible gambling. In fact, due to the industry’s backing of the South African Responsible Gambling Foundation NPC, its flagship National Responsible Gambling Programme continues to receive international recognition for its effectiveness in helping problem gamblers.

Themba Ngobese, Chief Executive Officer of CASA, added: “One of the critical developments that took place this year was government’s decision to increase the maximum number of casino licences that may be granted in the country from 40 to 41 with the additional licence being allocated to the North West Province. We stand by our view that there is no reasonable justification for this additional licence. It is our view that this move by government promotes instability and negatively impacts investor confidence. It also sets a very worrying precedent concerning the granting of future gambling licences. The legal proceedings pertaining to this are ongoing.”