South Africans spent R257.6bn on gambling in 2011

2012-11-14 11:55

South Africans spent R257.6 billion on gambling in 2011, according to a report by PricewaterhouseCoopers (PwC).

This equated to more than R8000 per adult gambler, said Nikki Forster, PwC Gaming Industry leader for South Africa.

Forster was speaking at the release of PwC’s first edition of the SA Gaming Outlook report in Rosebank, Johannesburg, today.

The report focused on segments within the gaming industry including casino gaming, limited payout machines (LPM), sports betting, and bingo.

The report detailed turnover (amount betted by players), gross gaming revenue (amount betted less winnings returned to players), and gaming taxes and levies collected by provincial licensing authorities.

Overall turnover for all types of gambling rose by 10.6% in 2011 from 8% in 2010.

Forster said turnover was projected to increase at a 6.3% compound annual rate during the next five years, to R349.6 billion in 2016.

Casino gross gaming revenue (GGR) in South Africa climbed steadily in 2011 and recorded its largest gain since 2007 at 5.8%.

Forster said casino gaming generated R14.9 billion in GGR in 2011.

“Casino gross gaming revenues will rise at a 5.3% compound annual rate to R19.2 billion in 2016 ...”

According to the report, most of the country’s gambling activity occurs in Gauteng, KwaZulu-Natal and the Western Cape, which together comprise nearly 77% of total GGR revenue in 2011.

Gauteng represents 41% of the total market.

Sports betting made up 12% of the GGR, with horse racing determined as the dominant component of the market.

Sports betting, which had grown considerably in the past few years, was affected by major international events in 2011.

There was a 40% increase in turnover due to the Rugby World Cup.
The 2014 Fifa World Cup and the 2015 Rugby World Cup were expected to benefit sports betting over that period.

GGR for sports betting was projected at R3.2 billion in 2016.

Revenue from LPMs and bingo more than doubled between 2007 and 2011. LPMs contributed R1.2 billion to the GGR total in 2011, while bingo accounted for R235 million.

Part of the LPM growth was due to the proliferation of new machines.

Bingo, which is currently only available in Gauteng, generated R200 million in GGR in 2011.

It was expected to be the fastest growing category in the next five years, with a projected 20% compound annual increase in turnover to R8.4 billion by 2016.

Forster said bingo was expected to be introduced in KwaZulu-Natal, Mpumalanga and the North West in the next five years.

Gaming taxes and levies for the government totalled R1.8 billion in 2011, up 9.8% from the previous year.

Forster said the gaming industry was vibrant and exciting, and continued to contribute significant tax revenues.

However, the lack of legal clarity and regulation made it difficult to determine the future growth of the online gaming industry in the country.

The Gambling Amendment Act provides for the legalisation and regulation of online casino gaming, but under current laws, online gaming has not yet been legalised in South Africa.

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