It’s unlikely that online gambling in South Africa will take off for the foreseeable future as the department of trade and industry, which is responsible for the sector, is stalling over the licensing of Internet-based operators, according to an industry expert.
Nikki Forster, PricewaterhouseCoopers’ hospitality and gambling industry leader for South Africa, said government has been working to introduce online gambling regulations for the past decade. However, government warned recently that it doesn’t believe online gambling creates jobs and has voiced concerns about the impact that licensing online operators could have on gambling addiction in the country.
Forster was speaking at the launch of PwC’s “Gambling Outlook: 2014 — 2018” report in Johannesburg on Thursday.
“There is hesitation from government,” she said. “In the last month, [trade and industry] has said it doesn’t support online gambling and it doesn’t believe it creates jobs and it could add to gambling addiction problems. Based on these messages, I don’t see anything happening for quite a period of time.”
Government’s unwillingness to license online gambling operators runs counter to trends in most parts of the world, Forster said.
“Many countries are relaxing their restrictions, allowing online gambling to take place. Online gambling in the UK is the big market — it’s significantly bigger than casinos.”
Even the US, which has vehemently opposed Internet gambling, has begun relaxing its rules, she said. “Certain states are now allowing poker to be played online. There is an increase in online gambling [in the US] and a relaxation of some of the prohibitions.”
South Africa is in a position to regulate online gambling, Forster said. The department of trade and industry said recently that it has the regulations in place to stop people from gambling online. “That means you can regulate it properly because you already have the ability to control it.”
According to PwC’s report, the South African gambling market was worth R21,8bn/year overall in 2013. This is expected to grow to R29,5bn by 2018 — a compound annual growth rate of 3,9%.
Casino gambling made up the bulk of the industry’s revenues in 2013 — R16,5bn, or 76%, of the total. South Africa has 37 licensed casinos. Sports betting is a distant second at R2,8bn (13%), followed by limited payout machines (R1,7bn, or 8%) and bingo (R732m, or 3%).
Bingo is the fastest-growing gambling category, with revenue expected to reach R1,8bn in 2018. Between 2012 and 2013, bingo revenues leapt higher by 67,5%, driven up in part by the introduction of bingo in the North West province and the Eastern Cape.
In July 2014, 12 shopping malls in KwaZulu-Natal applied for licences to install electronic bingo terminals, according to Forster. However, these applications have been challenged by The People’s Forum Against Electronic Bingo, Forster said.
Gauteng makes up 42,3% of the total gambling market. Together, Gauteng, KwaZulu-Natal and the Western Cape make up 76,4% of South African gambling revenues. — (c) 2014 NewsCentral Media