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South Africa – South African casino sector reports positive year

By - 2 December 2015

Despite a slowdown in the country’s economy, the South African casino sector saw its gaming revenues increase by 4.5 per cent in 2014/15 to R17.2bn from R16.5bn in 2013/14.

Figures released through a recent survey commissioned by the Casino Association of South Africa (CASA) show that South African casino operators contributed R17.2bn (US$1,194m) to the country’s gross domestic product over 2014/2015, an increase of 4.5 per cent from last year.

In the financial year 2014/15, CASA members contributed R5.7bn towards government tax revenue in the form of various taxes and levies, which represents 37 per cent of the value generated by them this year.

CASA announced the results of the survey titled “Survey of Casino Entertainment in South Africa -2015”. The report measured the economic and social impact of casinos in the local environment by analysing publically available data and in-depth information provided by CASA members.

Gross Gambling Revenue (GGR) for the entire gambling industry in the 2014/15 financial year amounted to R24bn which was a 9.6 per cent increase over the R22bn recorded in 2013/14. The casino industry accounted for 72.1 per cent of the R24bn.

At the same time, government tax revenue contributed by CASA members rose to R5.7bn in 2014/15, an increase of 3.6 per cent from R5.5bn in the previous year. CASA members invested a total of R2.3bn in capital expenditure at their properties in 2015, which amounts to 13.4 per cent of GGR.

Themba Ngobese, CEO of CASA, said: “Despite the economic downturn, the study reveals a slight growth in the casino industry and once again highlights the important contribution casinos make towards the South African economy. This is an exciting and fast-paced industry that is surviving despite the depressed economy and resultant decrease in consumer spending.”

In addition to a significant economic contribution, the study revealed that CASA members support about 64 000 direct jobs, Mr. Ngobese, said: “The casino industry is a significant employer particularly in the arts and entertainment, accommodation, food and beverage sector. This has a multiplier effect that ripples through the economy. There is no doubt that our findings show the positive impact casinos have on South Africa’s economy. In light of this, we are calling upon policymakers to focus on providing a more flexible operating environment and eliminate policies which inhibit investment, to reconsider some of the proposals outlined in the draft National Liquor Policy and to stamp out illegal online gambling. In order for the gambling industry to continue serving the economy, we need policies introduced that allow the industry to innovate, reinvest and contribute towards local communities.”

Another key finding of this year’s study was the significant amount that CASA members invested in social development. A total of R134m was directed by them into corporate social investment activities this year which represents an increase of R26m from last year. Education remains a core focus with the majority of funding (R56 million) being channelled to this sector, while R32mwent towards local communities within which the CASA member casinos operate.

“CASA members are fully committed to CSI and actively give back to local communities. Aside from education and community development, health, welfare, HIV/Aids and environmental sustainability also remain major focus areas for CSI programmes” concluded Mr. Ngobese.

Other study’s key findings included that: R3.2bn or 21 per cent was spend on employees. Employees were the second highest recipients of value generated by CASA members after government; R16.7m was directed towards National Responsible Gambling Programme; R69m was spent by CASA members on compliance.

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