An alternative gam­ing play

Finweek English Edition - - INVESTMENT - SIMON BROWN

NIVEUS WAS spun out of HCI in Septem­ber last year and holds gam­ing in­ter­ests in 39.9% of KWV and 90% of Formex. Of in­ter­est are the two wholly-owned gam­ing com­pa­nies Vukani Gam­ing Cor­po­ra­tion and Galaxy Bingo, which op­er­ate l i mited pay- out machines (LPMs) and run bingo halls.

Th­ese two gam­ing as­sets are not in your tra­di­tional casino and as such get a lot more pass­ing traf­fic. Fur­ther, LPMs are se­cured and man­aged by the es­tab­lish­ment (pubs, clubs, etc) they are placed in, with Niveus only really re­spon­si­ble for keep­ing them op­er­a­tional and of course the ini­tial pur­chase of the machines.

Lo­cal reg­u­la­tion al­lows for 50 000 LPM machines in South Africa and thus far only some 16% have been rolled out, leav­ing a lot more up­side. The risk is a con­sumer who is un­der pres­sure but this may play into the hands of the LPMs as a casino is in many senses a ‘trap’, whereas LPM are more in­ci­den­tal and are likely to at­tract a grow­ing share of the gam­ing mar­ket.

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