Forget the horses, betting goes high tech and across sport

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Sports betting is so popular and is growing so fast that it has passed horse racing as the biggest contributor to gross gambling income for the betting sector.

The value of sport betting rose dramatically from R478 million in 2011 to R2.4 billion four years later and there is still room for more growth, said PwC in its report on prospects for the gambling sector in South Africa until 2020.

Pietro Calicchio, head of PwC’s gambling industry division, said better broadband, more licences for online betting services and smartphones contributed to the growth. International sporting events like World Cup Soccer, World Cup Rugby and European football championship series ensure there are high volumes, he said.

All bets by bookmakers in South Africa, even if they are based on overseas sporting events, are included in these figures.

Some of the biggest players in this field in South African are Clickabet, SportingBet, Sunbet en Supabets.

Betting (on sport and horse races) are expected to grown in value from R4.4 billion in 2015 to R7.4 billion by 2020.

PwC said the betting category contributed 17% to the total gross gambling revenue (GGR) in 2015, which refers to the amount that has been bet, with any amount paid out been prize money deducted.

GGR was R26 billion in 2015 and, according to PwC’s forecasts, is expected to reach R34.8 billion by 2020.

Casinos are still the biggest contributor, responsible for 70% of the GGR. The rest is made up of machines that do limited payouts and bingo at 9% and 4%, respectively.

In 2015, an amount of R2.6 billion in taxes and levies were paid to provincial gambling authorities.

Calicchio said that represents 10.1% of the GGR and means that for every rand that casinos (and other gambling operators) regard as income, an average of 10 cents are paid to provincial gambling authorities.

Operators also pay VAT and according to PwC’s calculations casinos hand over R2 billion to the national government in this regard.

If provincial tax and VAT are added together, then casinos are taxed at a rate of 21 cents out of every rand they earn, said Calicchio.

In addition, companies that are members of the Casino Association of South Africa (Casa), paid R1.1 billion in corporate tax at the end of the 2015-2016 book year.

The country has 38 casinos out of a possible 40, for which licences have been granted. Casa is presently engaged in litigation over the 41st licence, which was granted to a casino in North West last year.

According to PwC ticket sales for the national lottery have declines over the past three years by a cumulative 6%.

According to Calicchio, that can be chalked up to competition from other gambling activities and a weaker economy.

He said illegal gambling activities remained a cause for concern in the industry, with Casa estimating that the government lost R140 million in taxes last year as a result of illegal gambling.

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