AFRICA: SOUTH AFRICA Focus


“But although growth is a bit stagnant we continue to position ourselves among the leader suppliers in the industry with over 22,000 class III gaming machines currently operating in South Africa.


“This market is very important for Bally. Once the economic climate returns to normal we are confident that we can increase our market share tremendously. This market has shown great adaptation to technology as it was one of the first markets to adopt smart card technology.”


The industry is a key component of South Africa’s tourism and leisure industry and has invested heavily in infrastructure and tourism including two new international convention centres and more than 5,000 new hotel rooms whilst also adding new golf courses, roads, airport redevelopments and museums.


The GGR for 2010 reached R16.2bn compared to R15.9bn in the year ending March 2010 of which casinos were responsible for 84.3 per cent, betting 9.9 per cent, LPMs for 4.6 per cent and bingo 1.2 per cent. Tax contribution was 1.5bn.


Gauteng remains the largest casino GGR market in the country accounting for 42 per cent of the total casino revenues in 2010 followed by KwaZulu-Natal (18.9 per cent) and Western Cape (15.9 per cent). Average return to player in 2009/10 was 90.2 per cent.


South Africa slipped into recession later than the rest of the world during the second quarter of 2009. At this time consumer spending contracted and persistent high levels of unemployment and debts remain significant constraints on the industry in particular.


In 2009 some 800,000 jobs were lost and debt increased. The forecast GDP growth for South Africa in 2010 is currently 2.6 per cent whilst inflation is expected to reduce to 5.4 per cent in 2010.


Quentin Sargent of Omega Gaming (South African agent for GPI) said: “The South African market has felt the effects of the recession over the past two years. Although trends have generally not been negative the growth rate has seen a significant dip.


“This reduction in growth has caused most casino groups to tighten up on capital expenditure thereby causing a knock on effect within the supply industry.


“We suppliers have endured extremely tough trading conditions for quite some time. We expect a significant turn around in the second quarter of next year, once the mergers are complete and the casinos need to then catch up on two years in their replacement cycles.


“Furthermore, with the new casino G3i I ISSUE 2 I PAGE 11


“Thismarket is very important for Bally. Once the economic climate returns to normalwe are


confident thatwe can increase our market share


tremendously. This market has shown great adaptation to


technology as itwas one of the first


markets to adopt smart card technology.”


Allwin Language,


Bally’sDirector of South Africa


groups shaking out, we may see re- branding exercises, which would impact significantly on the table side of the business, providing excellent opportunities for the likes of GPI with their wide and comprehensive product portfolio and established foot print.”


However, South Africa still remains one of the best jurisdictions worldwide in terms of gaming regulations.


As Sun International’s Dave Webster, General Manager Gaming Marketing said: “There are few problems per se operating in this environment and government’s approach tends to be pragmatic and sensible, with benefits to both the industry and to government by way of taxes. Responsible gambling is well controlled and managed.


“The gambling industry has been under significant pressure during the global financial crisis, however demand patterns for our casinos are stabilising and our financial position and debt ratios have strengthened. While the popularity of our properties remains high and footfalls strong, spend per customer last year declined across the board and gambling revenues decreased by two per cent from last year.”


OPERATORSANDOPERATIONS There are currently seven operators which between them share the 37 casinos. Of


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