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Send  Share  RSS  Twitter  25 Jan 2012

GAMBLING: Casino's Ride The Downturn


Recent Western Cape Business News

Despite the past year not having been an easy one for the casino industry, the South African gambling industry’s gross revenue for 2011 increased by 5% to R17.140 billion from the previous year’s R16.268 billion. During the same year, the industry contributed significantly to State coffers, contributing R4.5-billion in taxes to central government.

Statistics contained in the Casino Association of South Africa’s (CASA) just-released eighth annual Survey of Casino Entertainment also showed that during 2011, casino customers were restrained by high levels of household debt and diminished disposable income.

Says CASA CEO Derek Auret “The satisfactory macro-economic stability on which we depend now appears at risk. There are signs that domestic inflation has been creeping upwards, driven by unsuitable wage settlements in the public sector, increases in property rates and utility costs, and deteriorating basic services such as water and electricity.” Nonetheless, casino gambling was still the most popular form of gambling, accounting for R14 billion, or 89.8% of the total industry revenue.

At 41%, Gauteng remained by far the largest contributor to the industry’s revenues, followed by KwaZulu-Natal at 19% and the Western Cape at 15%.

One of the principal reasons for the demonstrable success of the casino sector is the constructive relationship that exists between the industry, government and regulators” said CASA Chairman Jabu Mabuza.

The aim of the annual survey, which is compiled from information supplied by the National Gambling Board, the provincial gambling boards, and CASA members, is to provide legislators, regulators, researchers and the general public with a comprehensive information resource about the important role the industry plays in the economies of communities across South Africa.

Auret added: “Given the significant contribution the industry makes to State revenues, it’s in the national interest that Government should approach with great caution the imposition of further regulatory restrictions or demands that may threaten the profitability of the casino industry and its ability to create jobs. This is particularly the case in respect of new taxes, which are bound to have an overall negative impact on casino turnover and thus on the tax payable to the provinces, as well as on the sustainability of the approximately 52,000 jobs that the industry currently maintains.”

Arguably the most significant development during the year has been the release of the long-awaited final report of the Gambling Review Commission. “Overall, the report spoke favourably of the casino industry, finding that, on the whole, it is very well run and regulated, and compares favourably with the best managed industries anywhere else in the world,” said Auret.

Pleasingly, the Gambling Review Commission also found that the incidence of problem gambling has remained relatively constant, despite the significant growth in the size of the gambling industry, suggesting that harm minimisation measures have been successful.”

This year’s survey also reveals the casino industry’s commitment to Broad-based Black Economic Empowerment, to the extent that an overall Level 2 rating has been achieved, based on analysis by Empowerdex. The analysis was performed in respect of the casino industry as a whole, and reveals a national industry score of 95.00 points, equivalent to a Level 2 B-BBEE Contributor status.

Also covered in the survey is the Ipsos Markinor research report, commissioned by CASA, to conduct research at 18 casinos across South Africa to establish the profile of people who visit casinos with the primary objective to gamble.  The overall aim of the study was to ascertain the socio-economic status of gamblers.

The research report revealed that 23% of all activities at a casino (by gamblers) are not gambling activities. These non-gambling activities include eating out, entertainment, movies, games and other non-gambling activities provided by casinos. 85% of gamblers indicated that they planned to spend R600.00 or less at the casino, and that this R600.00 included the cost of eating out, entertainment, movies, games and other non-gambling activities.

Worth noting is the high awareness of The National Responsible Gambling Programme (NRGP) with 79% of respondents saying they were aware of the programme, with awareness highest in the Western Cape (95%) and Eastern Cape (92%).

Said Auret: “It is clear from the research that the overwhelming majority of casino visitors live in built homes, use their own transport to get to casinos and have a very high awareness of the NRGP.  It is also clear from this comprehensive account that given the relatively high cost of entry and participation, casinos do not attract the very poor.”

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