SOUTH AFRICA MARKET REPORT SOUTH AFRICA
Population 49m Under 15 14m Aged 15-64 32.3m Urban population 62 percent Major cities Johannesburg (3.6m), Cape Town (3.4m) GDP per capita $10,700 Business climate South Africa is an emergingmarket with a comparatively well-developed service sector and a young population. It is an attractive target for inward investment especially compared with other African countries andmid-income nations around the world; tax rates are low, regulation ismoderate, corruption is less pervasive than in some of its counterparts, and access to credit is good. However, violent crime rates are among the world’s highest, unemployment is significant, and a largeminority of the population receives welfare. Affirmative-action programmes have a strong influence on employment practices.
Gambling (apart frombetting on horse races) was long banned in South Africa but the proliferation of illegal casinos led to a reversal of policy in the late 1990s and themarket has grown rapidly since. According to a 2006 study, 87 percent of the population
participated in the national lottery; 28 percent played slots; 23 percent bought scratch-cards; and 12 percent wagered on horse races. Only eight percent of South Africans said they never gambled.
Size of the industry In the 2010-11 financial year, total turnover was ZAR233bn
www.euroslot-online.com
(¤23.3bn). Nearly 90 percent of this was fromcasinos, and just 3.7 percent fromlimited payoutmachines (LPMs), as slots are known in South Africa. LPMs fared somewhat better in terms of gross gaming
revenue, however. For the gaming sector as a whole, this increased by 5.4 percent on the previous year, to ZAR17.1bn (¤1.7bn), with LPMs accounting for 5.3 percent of the total.
Regional breakdown There are sharp differences in the size of the gaming sector among provinces. Of that total GGR figure, 43.7 percent came fromGauteng province, 19 percent fromKwaZulu-Natal and 17.6 percent fromWestern Cape, with other provinces contributing considerably less. For LPMs, however,Western Cape is by far the dominant
province, distantly followed by KwaZulu-Natal, where high taxationmay be a factor.
LPMs LPMrevenue has been rising steadily – froma zero start – for a decade. There are also LPMs in Eastern Cape, Gauteng, Limpopo, andMpumalanga provinces; they have not yet been rolled out to not yet rolled out to Free State, NorthWest or Northern Cape. The enabling legislation specifies that themaximumnumber
allowed in the entire country is 50,000. These are further limited per province, as follows: Eastern Cape 6000 Free State 4000 Gauteng 10000 KwaZulu-Natal 9000 Mpumalanga 4000 Northern Cape 2000 Northern Province 3000 NorthWest 3000 Western Cape 9000 Stakes are capped at ZAR5 (¤0.50) and payouts at ZAR500 (¤50); return to the player is just under 90 percent, with slight
24 MARCH 2012
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