GAMBLING: Cape Casinos Clunking Along
Recent Western Cape Business News
THE Cape’s casinos appear to have pulled out of the trough, and there are signs of improved trading in the recent results from large gaming companies like Sun International and Gold Reef Resorts.
Gold Reef Resorts CEO Jabu Mabuza said the total gross gaming revenue in the Western Cape grew by 1.9% in 2010 from the previous year, But much more encouraging was Mabuza’s admission that gross gaming revenue had grown by 4.5% in the second half of 2010.
He said this was a sign of economic recovery given that the Western Cape was the first province to be impacted by the economic recession.
Sun International’s interim results, which cover the beginning of July to end December 2010 give credence to Mabuza’s argument. The biggest (by far) Cape casino, the GrandWest near Goodwood, put in an encouraging interim performance after two years of tough trading.
The GrandWest managed to increase turnover to R832 million from R787 million. While margins were under some pressure, gross profits edged up to R313 million from R303 million and operating profits were slightly higher at R239 million (R233 million in the corresponding interim period in 2009).
Sun International, though, appears still to be waiting for traction at the Golden Valley casino in Worcester. Although turnover crept up to R62 million (R55 million previously) both gross profits (R14 million) and operating profits (R5 million) were static.
At least there was good news from Port Elizabeth, where considerable money has been spent refurbishing the Boardwalk casino. The Boardwalk showed good growth in both gross profits from R75 million to R85 million) and operating profits (R61 million to R71 million).
Gold Reef Resorts also appears to be looking more hopeful, although the performance from its Cape-based casinos looked more strained as the trading period covered the full 2010 year.
The Garden Route casino near Mossel Bay saw revenue down around R7 million to R153 million with gross profits dropping by the same margin to R64 million. Mabuza said the Garden Route casino experienced its toughest trading period with tables and slots showing declines of 7.8% and 8.1% respectively.
He noted the Garden Route casino traditionally scored from the December holiday spending. “Given that consumers were cautious with their disposable income over the festive season with few choosing to travel, the Garden Route Casino’s revenue levels suffered.”
The Mykonos casino saw a slight increase in revenue to R118 million but gross profits remained at R47 million. The Mykonos performance should be considered satisfactory as the results include additional costs from the introduction of smart card gaming.
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