Operator News
South Africa- Sun hopes Menlyn relocation will bring 3,000 slots
By Phil - 15 July 2013
Sun International is planning to relocate its casino at Morula, Mabopane to create a new R3bn urban entertainment destination at Menlyn in Tshwane.
It is proposed that the project’s casino will open with 2,000 slots and 60 tables and will have the flexibility to increase its offering once demand is proven up to a total of 3,000 slots and 100 tables.
The centre piece of the project will be Sun International’s Time Square at Menlyn Maine which will offer a 5-star hotel with 100 luxury rooms and 10 suites to cater to the diplomatic travel market, support the business traveller and encourage overnight stays in Tshwane and accommodate gambling patrons over weekends; a conference centre to complement the hotel and its anticipated clientele; an indoor entertainment arena seating 8,000 people and catering for international and local entertainment, concerts, sports events, conventions and exhibitions; a diverse range of retail shopping, bars and restaurants, with parking for 2 785 vehicles; and a state of the art casino including a Salon Privé.
A Sun spokesperson explained: “Our market research has shown that there is clear demand for the hotel and convention space in Tshwane as well as the proposed entertainment arena – all of which also dovetail with Sun International’s existing assets and proven competence in the industry. Research into the gaming market indicates that for many customers from Tshwane West, North, Central and East, the location of the existing Gauteng casinos has made reaching them difficult. This suggests that there will be growth in the market from these areas with a casino based in Tshwane, giving residents the opportunity to enjoy the same ease of access and urban facilities found in other South African cities.”
Sun International is making an application to the Gauteng Gambling Board in terms of Section 34 of the Gauteng Gambling Act to amend the Morula casino licence: to provide for a different location for the casino at Menlyn Maine, Tshwane; to provide for additional gambling devices from 510 to 3,000 slot machines and 12 to 100 tables, to describe the gambling floor in the different location.
The Morula casino licence is currently held in the name of SISA. It is proposed that the casino licence, once amended to reflect the premises as being Menlyn Maine, should be held in the name of a new entity “Time Square at Menlyn Maine NewCo”. Time Square at Menlyn Maine Newco is making an application to the Gauteng Gambling Board in terms of Section 35 of the Act for the transfer of the casino licence in order to introduce a broad-based empowerment shareholding involvement. The result of the new shareholding will be an increase in the effective BEE interest from Morula’s current 15 per cent to 25.1 per cent.
Should the necessary regulatory approvals be granted, Sun International will immediately commence detailed planning (estimated to require six months). All necessary approvals/rights relating to the development itself are already in place and the land deal with the developers of Menlyn Maine has been concluded. Physical construction of the new entertainment destination is estimated to take no more than 30 months and will be completed in one phase. The total development is therefore estimated to be completed within a period of 3 years from date of receiving regulatory approval.
In South Africa, both national policy determinations and the legislative framework mandate a clear link between the operating of casino licences and the need to advance the public interest, including the provision of social benefits. The proposed development of Time Square at Menlyn Maine will deliver: an overwhelmingly compelling package of substantial economic and financial returns to all stakeholders; an integrated entertainment destination offering a range of experiences and mix of entertainment offerings and special events; a critical mass of attractions to leverage Tshwane’s leisure product and complement other attractions in the area; a destination which encourages overnight stays through offering 5-star hotel accommodation and conference facilities; and supportive marketing initiatives and events sponsorship which have a large television audience and promote local, national and international tourism.
Sun International currently holds two licences in Gauteng: one at Carnival City in Brakpan and the other at Morula Casino and Hotel in Mabopane, the latter built in 1988. For some time Morula has experienced a significant decline in revenues due primarily to its location which is now relatively inaccessible in the context of highway proximity and the new growth areas of Tshwane. More recently the business has been further negatively impacted by the growing electronic bingo and limited payout machine operations which are targeting the underserviced Tshwane market, Morula’s key catchment area. Over the years the Morula casino has been downsized and Sun International believes that, in its current location, nothing further can be done to reverse this once-popular and successful property’s decline. On the other hand, if the casino is relocated to an area that is closer to its source markets with good road access, then the opportunity arises to create a significant and unique entertainment and conference destination, tailored to suit the needs of Tshwane and maximizing for all stakeholders, provincial and national government, employees and shareholders, the true potential of this casino licence.
