Frankly, it is almost impossible to find a land-based casino in South Africa that didn’t lose a dime because of the COVID-19 pandemic. According to various researches, SA casinos lost billions last year due to the closure and lockdown.
For instance, Sun International was one of the biggest losers last year. It appears that the hotel chain and casino group lost more than R1.1 billion. The aftermath of the lockdown and closure of casinos has also not increased their revenues.
It is very difficult to predict where the SA land-based casino industry will go from here.
The Sun International Group 2020 Losses
Among the entire land-based casino in SA, Sun International was the most affected. By December 2020, Sun International declared a profit of R763 million and a loss of R1.1 billion. Also, the company incurred impairment charges totaling R1.3 billion from their various subsidiaries. Other Subsidiaries of Sun International recorded the following losses:
Sun City – R900 million
Boardwalk – R180 million
The Maslow Sandton – R96 million
Generally, for the first six months in 2020, the income of the casinos reduced by 55 percent to R2.5 billion. Also, the adjusted EBITDA came down by 95 percent to R80 million. Also, the imposition of curfew from 8 pm and the non-sale of alcohol affected the income of casinos drastically. The fear of contracting the virus scared casino players away.
Honestly, it will be hard to equate the exact sum that the Sun International casinos lost as a result of the pandemic.
Effect of the Pandemic on Other Sectors in SA
It’s online very few businesses that made gains as a result of the pandemic. For instance, it seems that online casinos made a lot of profit during the lockdown. On the other hand, it is hard to point at any other sector that benefited from the pandemic.
Another sector that suffered the most was the tourism and the entertainment industry. At some point, SA had to close down its borders from visitors to reduce virus spread. So no visitor was allowed to come into the country.
Aside from those mentioned above, hoteliers were affected by the pandemic. Since there was a restriction of people gathering, it reduced conference room bookings at hotels. What’s more, international travel for business and leisure was halted. However, the international trips for business and leisure kicked off on December 1, 2020.
The unemployment rate in SA increased drastically too. Most companies had to cut down on their staff strength. For instance, Sun International notified their trade union, SACCAWU, of their intention to retrench some staff. A total of 2,195 employees of the group were retrenched.
Did COVID-19 Affect the Online Gambling Industry in South Africa?
Generally, most online businesses didn’t suffer the volume of loss experienced by businesses that required physical contact. Like most countries, the online casino industry in South Africa recorded a tremendous boom. The number of online website new registration increased drastically by more than 50 percent.
Gambling online for real money became the only alternative for SA players during the lockdown and closure of land-based casinos. Although online gambling remains illegal in SA, it is obvious that a lot of casino players opted for gambling online. Most of the online casinos patronized by SA players are licensed by:
The United Kingdom Gambling Commission
The Malta Gaming Authority
Curacao Gambling Authority
Insight into the SA Gambling Industry
No doubt, the South African gambling industry comprises more land-based casinos. Like you may know, online casinos and slot gambling are illegal in SA. More so, the National Gambling Act of 2004 outlawed any form of online gambling in South Africa. Also, other updated laws didn’t approve online gambling but rather imposed sanctions on operators.
Some of the notable land-based companies in SA are:
Emerald Resort and Casino
Rio Casino Resort
Sun City Casino and Resort
The Boardwalk Casino
Suncoast Casino and Entertainment World
Graceland Hotel Casino Country Club
At the last count, South Africa has more than ten land-based casinos. The National Gambling Board monitors and regulates the activities of these casinos.
Is There Any Future for Land-Based Casinos in South Africa?
Going by the current events, it is hard to predict a better future for land-based casinos in SA. Considering the impact of the pandemic, a lot of casinos may go under.
However, according to Sun International management, there is a gleam of hope. After lifting the lockdown, their shares in the Gauteng market increased by 2.5 percent. Nevertheless, experts believe that online gambling may make land-based casinos less profitable. What’s more, even with the vaccine, normalcy may take time to return.