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Send  Share  RSS  Twitter  06 Dec 2012

GAMBLING: GDP Is The Biggest Winner With R50b


Recent Western Cape Business News

The Casino Industry of South Africa (CASA), based in Cape Town yesterday released the results of their 2012 industry survey which indicate that casinos have contributed in excess of R50-billion to GDP in terms of economic multipliers.

During the past financial year, South Africa’s 37 casinos paid more than R4.7-billion to government coffers through company tax, including R1.8-billion in provincial gambling taxes and VAT. They also invested over R80-million in communities through social investment programmes and spent a further R10-million maintaining the internationally recognised National Responsible Gambling Programme (NRGP).

CASA Chief Executive Derek Auret said, “aside from the obvious benefit to government, casinos have also been responsible for more than R30-billion in new development, have created almost 100 000 direct and indirect new jobs and have added 7 000 new hotel rooms and two international convention centres to our national tourism assets.

Auret also commented on the recently released PriceWaterhouseCoopers review of the gambling industry, saying “while a total of R245-billion was wagered by South Africans in 2011 across various forms of gambling, it is important to note that more than 93% of the bets were returned to casino players in the form of winnings. The 7% retained by casinos is fed back into running costs, including taxes and levies.

In terms of Gross Gambling Revenue, the biggest winner is Government which receives 36.39%, or R4.7-billion of the gross casino revenue.  This is followed by employees, at 19.93% and investment in infrastructure and expansion at 17.13%.  A further slice of 26.55% is spent on community investment, servicing of debt, shareholders and equipment and machine leasing costs.

However, CASA also cautioned government not to regard casinos as an easy target for additional tax revenue.   Chairman Jabu Mabuza said notwithstanding the resilience casinos showed in an unpromising environment, “compounding the economic challenges has been a growing enthusiasm on the part of policy-makers for more stringent regulation and taxation of the industry.”

In addition, during his budget speech in February this year, Finance Minister Pravin Gordhan announced his intention to introduce a national tax based on gross gambling revenue from 1 April 2013. This was mooted to have a significant effect on casino profitability and ability to reinvest.

The National Assembly Portfolio Committee on Trade and Industry’s recommendations are based on the findings of the Gambling Review Commission, designed to form the basis for legislative amendments.  Mabuza continued, “no doubt many of these proposals are well intentioned but it needs to be said that as a regulatory environment, we are already held up internationally as a world-class example of best-practice regulation. As importantly, the National Responsible Gambling Programme, a public/private sector initiative, is regarded as the world’s most successful and effective programme of its kind, and certainly the most cost-effective. Problem gambling numbers have declined over the past number of years and are now in line with first world figures and substantially below Asian countries.

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