Focus
AFRICA: SOUTH AFRICA
By 1995 there were many casinos operating illegally in South Africa and finally in 1996 the National Gambling Act was introduced.
When the new South Africa arrived it had basically inherited 17 casinos, which at the time represented a billion rand industry from the old South Africa (the TBVC states) as well as a long standing horse racing industry. At that time there were an estimated 150,000 illegal slot machines in operation under neon signs which attracted players to gambling dens and mini ‘casinos’.
In 1996 the National Gambling Act was introduced which aimed to eliminate illegal gambling and not only bring the whole sector under control, but also provide freedom of choice to the players.
The National Gaming Board was established in 1998 to regulate the gambling industry and reform the gaming sector in South Africa. It stated that casino revenues should be distributed as follows:
• 40.63% (R4.4bn) in revenue goes to provincial and national government in tax and is made up of: R1.1bn in corporate tax and STCs R243m in PAYE R5m in withholding taxes R2.9bn in VAT R95m in other
• 19.47% goes to employees
• 0.68% on corporate social investment programmes
• 12.86% is paid in interest to banks to service debt
• 6.77% goes to shareholders • 1.37% is paid on lease costs
• 18.22% (the balance) is retained in the business for depreciation and growth.
In 2003 the Gambling Regulators Africa Forum (GRAF) was launched to cover regulatory changes in the African continent. Then in 2004 the South African act was revised and added sections for the exclusion of individuals, positioning of ATMS, signage and advertising.
Since the gambling act was introduced 14 years ago the number of illegal machines has now dropped to around 10,000 whilst the number of legal casinos machines has increased from some 7,000 (in the pre 1996 times) to around 22,000 currently in the market.
South Africa’s gaming market is substantial. It is also one of the most transparent, regulated, monitored and taxed industries in the country. Today there are 37 legal casinos across all nine of South Africa’s provinces with a
G3i I ISSUE 2 I PAGE 10
South Africa’s gamingmarket is
substantial. It is also one of themost transparent,
regulated,monitored and taxed industries in the country. Today there are 37 legal
casinos across all nine of South
Africa’s provinces
with a provision for 40casinos in total.
These are operated by four primary groups (Sun International, Tsogo Sun, Gold Reef Resorts and Peermont Global) plus London Clubs with one casino and two independents.
Sun International is the largest of the groups although under threat of relinquishing its number one spot to Tsogo Sun due to its planned merger with Gold Reef Resorts which is expected to be finalised by the end of the year. There are also rumours of another merger, which if this goes ahead will leave two giant companies in control of the casino gaming market.
Since the legalisation of the casino gambling in 1996 the sector has developed into a sustainable industry. It has contributed more than R60m in corporate social investment (CSI) activities whilst the cumulative contribution since 1996 is some R286m. Today the industry has some 20,000 slots, has been responsible for more than R15bn in new investment and has created around 100,000 direct and indirect jobs.
Allwin Language, Bally’s Director of South Africa said: “The market’s growth has slowed somewhat due to the current volatile economic situation, but the region is still offering some promising expansion opportunities.
provision for 40 casinos in total.
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