South Africa accumulated more than R34 billion in gross gambling revenue (GGR) in FY2021/22. Based on the performance of the biggest gambling roleplayers in South Africa, this number is likely even higher in 2022.
The latest data from the National Gambling Board (NGB) of South Africa showed that GGR in the country went from R23.25 billion in 2020/21 to R34.43 billion in 2021/22 – a 48% increase.
This increase shows that the gambling industry has not only recovered from its lows during the Covid-19 pandemic but has boomed over the past two years.
The pandemic also changed the structure of South Africa’s gambling market, as betting dominated the gambling market while casinos shrunk.
“Betting revenue instantly made up 99% of revenue once the land-based landscape was completely shut down as punters turned to betting as the only form of gambling available and accessible online,” said the NGB.
Betting was the only sector to grow between FY2019/20 and FY2020/21.
However, as Covid-19 restrictions relaxed, the other modes of gambling started to recover.
Casino revenue saw an almost 100% increase in FY2021/22 and now takes up just under 40% of GGR.
At the end of the 2020/21 financial year, betting was still the largest sector, accounting for 45% of GGR.
After this recovery, the gambling industry boomed and grew past pre-Covid levels.
GGR in FY2019/20 – before Covid-19 restrictions were put in place – was R32,65 billion.
Who wins big?
South Africa has 38 operational casinos, according to the latest NGB data.
According to the NBG, the three companies with the largest market share of ownership of operations casinos are Tsogo Sun Holdings/Hosken Consolidation Investments, Sun International, and Peermont Global.
Tsogo Sun Gaming
Hosken is a key shareholder of Tsogo Sun Gaming – South Africa’s largest hospitality company. Hosken owns just under 50% of Tsogo Gaming and describes it as “our single most valuable operating enterprise”.
Tsogo Gaming has 13 casinos and 23 Galaxy Bingo sites, and VSlots operations.
After a Covid-19-related slump in 2021, Tsogo Gaming saw a massive jump in earnings last year, reporting an 88% increase in headline earnings for the six months ended 30 September 2022.
Income from the company’s casinos, bingo and limited payout machines (LPM) accounted for more than 90% of the company’s total income for the six months ended 30 September 2022.
Tsogo Sun Gaming was unbundled from its parent company, Tsogo Sun Holdings, in 2019. This process, along with the impact of the Covid-19 pandemic, left the company in severe debt.
However, the company has slowly been making a dent in this debt, and for the six months ended 30 September 2022, its net debt to adjusted EBITDA ratio stood at a 2.22 times multiple.
Hosken also owns Vukani Gaming, a gaming machine operator and South Africa’s largest route operator.
According to the NGB, Hosken has a 37% market share of operational casinos in the country.
While Sun International took a significant hit from load-shedding in the past year, its most recent results saw a strong post-Covid recovery in South Africa.
For the year ended 31 December 2022, Sun International saw a 44% increase in group income, which now stands at R11.3 billion. Group headline earnings were also up by more than 100%.
Gaming income from Sun International’s 13 casinos, Sun Slots and SunBet make up 80% of group income for the company, and also increased by 36% in 2022.
“The group was able to successfully defend and grow market share in all provinces, while income generated from Sun Slots recovered to pre-Covid-19 levels,” the company said in its latest results.
“SunBet generated record income during the year under review and is well on its way to achieving our aggressive growth targets for this business.”
The growth of its online betting business has encouraged the company to expand into new markets in Africa.
Sun International concluded a 70% investment in SunBet Africa Holdings, which has online sports betting and casino licenses to operate in Ghana, Zambia and Kenya.
According to the NGB, Sun International has a 32% market share of operational casinos in the country.
Sun International attempted to buy out Peermont for R9.4 billion in 2015. However, after failing to win antitrust approval, the deal collapsed, and Sun International had to pay the company R675 million.
If Sun International had acquired Peermont, it would also have acquired the 21% market share in operational casinos the company has.
Peermont has eight casinos, among which is Emperors Palace in Johannesburg – one of the largest casinos in South Africa.
It also operates the online sports and entertainment betting site PalaceBet.
Peermont has not been listed on the JSE since 2007.