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Sun International – one of the most prominent casino operators in South Africa voiced their concerns about a proposed legislation that would override the exclusivity they’ve enjoyed since the passing of the Western Cape Gambling and Racing Act of 1996.
They, along with other chief operators in South Africa’s Western Cape, warned that this amendment would be a detriment to their revenue, and consequently many of their employees would lose their jobs.
Many of South Africa’s hotel and casino operators have been trying to manage their debt and operation costs, and a relocation would set upon them another bout of financial strain, which would inevitably lead to downsizing.
Most notable of these is Tsogo Sun, South Africa’s largest hotel and casino operator who has been struggling with debt in the recent years due to acquisitions and expansion plans.
Exclusivity Expiration
Following the expiration of the Western Cape Gambling and Racing Act of 1996 in 2016, and the subsequent running out of the 10-year exclusivity period, the South African government had begun deliberating on an amendment. The amendment, named the “Western Cape Nineteenth Gambling and Racing Amendment Bill of 2018“, would allow licensed casino operators in the Western Cape to relocate their venues to more profitable locations, specifically to Cape Town’s Tygerberg and Table Bay areas in the eastern region of the city.
Protests Abound
This however is more of a curse than a blessing, at least according to Anthony Leeming, CEO of Sun International. Leeming projects that due to the relocation, patronage would drop by 20 percent at most, leading to at least a 24 percent loss in net profits. According to Leeming, this would not only lead to a substantial downsizing of staff, but will also cause a domino effect of loss and layoffs within the supporting businesses in their casinos GrandWest and Golden Valley Casino, among others.
In Golden Valley alone, Leeming predicts as many as 92 employees would lose their jobs, as well as a loss in supplier spend equivalent to $680,000 US. The casino operators will review the proposed amendment and then submit their comments on the legislative proceedings by 31st July.
Most executives of the Western Cape’s hotel and casino industry have already seen the drafted amendment and will each send in their input to attempt to sway the decision. Tsogo Sun isn’t as upset as Sun International over the proposed legislation and Jacques Booysen, CEO of Tsogo Sun has stated that he company is willing to support relocation further into the inner cities, provided that it is done in such a way that minimizes inconvenience and loss of employment.
