Sluggish growth bites into Casa
Scourge of illegal gambling also has to take some blame
THE SLUGGISH economic growth and the scourge of illegal gambling have been blamed for the 1.8 percent decline in the casino industry’s revenue for the year ended March 31.
Casino Association of South Africa (Casa) chief executive, Advocate Themba Ngobese, said their members generated a gross gambling revenue (GGR) of R17.8 billion in the year under review, compared to R18.26bn last year.
This was the first time since 1997 that the industry had seen a decline in its gross revenue, said Ngobese, as he released the findings of the 2017 Survey of Casino Entertainment in South Africa, at Emperors Palace, in Johannesburg yesterday.
Ngobese said the current economic conditions had negatively impacted consumers’ disposable income, and revenue erosion from illegal gambling was also to blame.
In order to address the situation, Ngobese said they would need to market their products effectively and spend more money “to get people in” on the industry as they hadn’t had a double-digit growth in a decade.
The World Bank last week maintained its 0.6 percent economic growth forecast for South Africa, saying it expected the undeniably continental powerhouse’s economy to grow by 1.1 percent in 2018 and 1.7 percent in 2019.
Ngobese hoped the “trend of regression” doesn’t continue to clobber the casino industry, which spent R84 million on compliance costs, a 13 percent increase when compared to R74.5 million spent in the previous year.
The Gauteng province was still the largest contributor with R7.3bn, which was down 1.6 percent compared to last year. The biggest loss of GGR was registered in North West, which was down 22.1 percent, while the biggest growth was in Western Cape which ticked 5.3 percent.
The total tax contribution for the year was R5.9bn, broken down into gambling taxes and levies of R1.8bn, value-added tax R1.9bn, corporate tax R1bn, and other taxes and levies amounting to R1.2bn.
While the industry supported more than 64 000 jobs, with more than 10 000 directly employed for casino operations, Ngobese expressed concern over the economic crisis.
“We need to have a growing economy, because it provides a conducive environment for growth in our industry.”
Political uncertainty was not helping either. “Businesspeople are perturbed and uncomfortable with political uncertainty,” he said.
Casa chairperson and businessman Dr Jabu Mabuza lashed out at the scourge of illegal gambling, saying that the trend has been attributed to the “erosion of gambling revenue” by illegal gambling operations. The scourge was most prevalent on illegal online gambling operations which “continue to grow unabated”.
While he applauded the Department of Trade and Industry for its recent forfeiture of unlawful winnings totalling more than R1m in an effort to stop this scourge, “we are of the view that far more work is required in this regard”.
Mabuza urged the authorities for a “deliberate and concerted law enforcement” to address illegal gambling in the country.
Last December the Directorate for Priority Crime Investigation swooped on the North West, shutting down 20 illegal gambling sites and arresting suspects. About 281 slot machines worth about R10m were seized, along with 198 computers worth about R3.9m.
Mabuza said Casa members invested R1.96bn in capital expenditure on their casino complexes during the year under review and that the industry has spent R712m on its corporate social investment (CSI) since 2013. However, due to the decrease in gambling revenue, Casa members this year spent R155m on CSI, which was down 6.4 percent or R10.6m.
Of the R155m, R16.4m went to the SA Responsible Gambling Foundation, while 41 percent went to education, 20 percent to community development initiatives and 12 percent to health, welfare and HIV/Aids.
Casa’s 36 members include large hotel groups Tsogo Sun and Sun International, which were recently announced as being within the top three most empowered companies listed on the JSE this year.
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