South Africa

The R3.5 billion industry that attracts wealthy businessmen like Johann Rupert

South Africa’s horse racing and betting industry has grown significantly over the past few years and is a hobby for some of the country’s richest businessmen.

Horse racing in South Africa dates back to the late 18th century, with the first official races held in Cape Town in 1797.

Since then, it has evolved into a professional sport with international recognition, particularly through events like the Durban July.

Along with the sport, betting on horse racing has become one of South Africans’ favourite hobbies and one of the country’s most popular forms of legal gambling.

The horse race betting industry reached a seven-year high in the 2023/24 financial year and has grown by over 56% since 2017.

While small compared to the country’s sports betting industry, horse race betting constitutes a significant portion of South Africa’s gross gambling revenue (GGR).

The latest national statistics from South Africa’s National Gambling Board (NGB) for the 2023/24 financial year revealed that general betting generated 60.5% of the total industry GGR, amounting to R35.9 billion​.

The overall betting segment, which includes horse racing and online sports betting, experienced significant growth, with an increase of 51.2% compared to the previous year​.

The total turnover for betting was R761.3 billion, representing 66.6% of the total gambling industry turnover of R1.14 trillion​.

In 2023/24, total horse racing betting reached a turnover of R3.51 billion, up significantly from the R2.24 billion the industry generated in 2017.

The NGB divides horse racing betting turnover into two categories: bookmakers – the largest contributor – and totalisators.

A totaliser uses a pooled betting system where all bets on an event are combined, and payouts are calculated based on the total pool divided among winners after a commission is deducted.

In this context, a bookmaker refers to a betting operator offering fixed odds, where payouts are predetermined at the time of the bet regardless of how other bettors wager.

Of the R3.5 billion total, bookmakers contributed the lion’s share at R3.13 billion, while totalisators contributed R377.18 million.

Billionaire Johann Rupert

While the industry has grown tremendously, South Africa’s horse racing scene has struggled significantly over the past few years. It is only as big as it is today due to wealthy businesspersons’ interest in the sport.

The Financial Mail explained that, in 2022, horse racing in South Africa was in a “nosedive” due to its links with disgraced businessman Markus Jooste.

Prior to his downfall, the former Steinhoff CEO was the largest racehorse owner in the sector.

In addition, his company, Mayfair Investments, was the largest shareholder in JSE-listed Phumelela, the biggest horse racing and betting operator in South Africa.

When Steinhoff imploded, and its shares tanked, so did Phumelela’s by association.

Soon after, Covid-19 lockdowns also brought races to a halt, putting the industry and its major players under significant pressure.

By May 2020, Phumelela had filed for business rescue. However, a few months later, businesswoman Mary Slack, born an Oppenheimer, bought the company.

The Financial Mail said this move has been widely credited as saving the country’s racing industry.

In 2022, Cape Racing, which owns three of South Africa’s most prominent racecourses, was about to default on its payroll obligations

This is when businessman Greg Bortz, who had a lifelong interest in horse racing and a strong background in finance and investments, stepped in and offered the company an emergency loan.

He told the Financial Mail that his focus “was on saving racing, first and foremost”. 

This is why, in 2022, his investment firm injected capital into the organisation, effectively rescuing it from potential collapse.

Since then, Bortz has become the company’s chairman and, alongside Hollywoodbets, has played a pivotal role in restructuring the company and securing its financial stability.

Today, Cape Racing oversees two of South Africa’s largest racecourses, Hollywoodbets Kenilworth and Hollywoodbets Durbanville.

Another prominent South African businessman who is deeply involved in horse racing is billionaire Johann Rupert.

Rupert has long supported horse racing and equestrian sports, viewing them as part of South Africa’s cultural and sporting heritage.

Rupert and his wife, Gaynor, are prominent racehorse owners. They own several high-quality thoroughbreds that compete in South Africa and internationally.

Their horses have participated – and won – in some of the most prestigious local races, such as the Durban July and Sun Met.

They are also highly involved in the horse breeding industry, having produced some of the most sought-after thoroughbreds both locally and internationally.

Business Day reported that in 2022, Gaynor’s horse breeding farm, Drakenstein Stud in Franschhoek, produced three of the top four horses in South Africa at the time.

Horse race betting in South Africa

The latest national gambling statistics show that horse race betting has grown significantly over the past few years. This can be seen in the graph below.

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