South African Model Is a Work in Progress for Regional Expansion

Published September 15, 2017 by Lee R

South African Model Is a Work in Progress for Regional Expansion

Increasing contributions from online holdings remains the initial challenge.

The general climate for gambling in South Africa continues to be watched as the barometer for the fortunes and propriety of prospective expansion of online and land-based gaming in a region that would benefit from the increased tax and revenue benefits of online operations in particular more than any other region in the world. 

Land-based Conditioning

To this point the gambling landscape in the country of South Africa is dominated by its land-based casinos, though casinos turned out to be the sole gaming vertical to post a revenue decline in fiscal 2017.

New Market Figures

These figures are being scrutinized anew in light of the annual report released last Thursday by South Africa’s National Gambling Board (NGB) covering the 12 months ending March 31, 2017 which revealed that overall taxable gaming revenue (excluding lotteries) reached R27b (US $1.2b), representing a year-on-year jump up 3.8% from fiscal 2016.

Decreases in Provinces

With two thirds of the take (66.4%) being generated by the land-based casino operators in South Africa, their take was nonetheless down 1.8%with total earnings of R17.9b in FY17, a drop which NGB attributed to a decrease in operating positions in six provinces.

Casino Performance

Casinos brought in 73.2% of all gambling turnover, even as the total amount spent at land-based casino slots and tables dropped 1.2% year-on-year, with casinos further reporting commensurate declines in both turnover and revenue in the most recent fiscal year.

Online Figures Unavailable

As for specific online activities, South Africa currently permits online sports and race betting, but the NGB did not offer separate figures for land-based and online wagering in its report.

Outside Help Suggested

A more cohesive monitoring and reporting system represents an infrastructural adaptation which is still being developed in South Africa. Global iGaming leaders and officials would do well to provide consulting support to NGB in order to support policy implementation and regulation adaptation in a region with historic infrastructure issues which have stunted economic development across the region.

Adaptations Considered Internally

So far policy adaptation initiatives being bandied about within the NGB include increasing penalties for unauthorized gambling operators and confiscation of winnings of South African punters who patronize these sites.

Outlook for Adaptation

These penalty practices need to be modified by effective application of citizen support and protection against at-risk behaviour if the model in South Africa is to be effectively adapted and expanded across Africa.  Outside consultation from officials overseeing effective operating models such as in some European countries and from professionals operating successfully in those markets in successful markets seems to be the logical next step. 

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