Economic crunch hits casino profits
The Casino Association of South Africa‚ which represents the legal casino gaming industry‚ on Thursday signalled the economic downturn is emptying the pockets of punters.
Its 12th annual survey of the South African casino industry showed that‚ for the first time since the inception of the casino industry in South Africa under the new democratic dispensation‚ there was a decrease in revenue.
CASA members generated gross gambling revenue of R17.8 billion in the year to March 2017‚ down 1.8% from R18.2 billion in the previous year‚ "due to current economic conditions negatively impacting consumers’ disposable income and revenue erosion from illegal gambling".
Gauteng remains the largest contributor to gross revenue with R7‚363 050 649 - but this is down 1.6% compared to last year.
The biggest growth in gross gambling revenue was experienced in Western Cape - up 5.3%.
The biggest loss was experienced in the North West - down 22.1%. CASA blamed this on government's decision last year to allocate and additional casino licence in the province. It stated there was no reasonable justification for this decision and legal proceedings are ongoing.
Elaborating on the findings‚ CASA chairperson Dr Jabu Mabuza 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% drop in gross gambling revenue – 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."
Mabuza called on the authorities "for deliberate and concerted law enforcement effort to address illegal gambling in South Africa".
Government gets a big chunk of cash from the industry.
Mabuza said CASA members generated R16‚5 billion of value from their activities this year after taking into account amounts paid out to suppliers which amounted to R5‚8 billion. Of the R16‚5 billion generated‚ R3‚5 billion or 21% was distributed to employees; while R5‚9 billion or 36% went to local‚ provincial and national governments in the form of various taxes and levies. "These two stakeholders received 57% of the value generated‚ up by 1‚0% compared to the previous year‚" Mabuza said.
CASA members invested R1‚96 billion in capital expenditure on their casino complexes during the year under review; an amount equalling 11% of gross gambling revenue.
The total corporate social investment contribution was down 6‚4% or R10‚6 million this year due to the decrease in gambling revenue‚ he said. Despite the decrease‚ the survey showed CASA members still spent R155 million on initiatives in focus areas such as responsible gambling‚ education‚ health‚ sports‚ arts and culture‚ and the environment.
• For CASA's full report including graphics and podcast visit casasa.org.za
• PricewaterhouseCoopers report: PwC gambling outlook 2016-2020