Sunday Times E-Edition

Betting big on gambling growth

By THABISO MOCHIKO

● Gaming and hotel group Sun International has embarked on an expansion plan that includes adding more slot machines at some facilities and additional games on its online platform, which will be opened to more countries in Africa.

The group — which owns Sun City Resorts, GrandWest Casino, Meropa Casino and the Maslow Hotel — is eyeing strong growth, particularly online, while it wants to boost the profitability of its casino business.

Sun International’s Sun Slots runs limited payout machines (LPM) with restricted bets and prizes at licensed venues across the country, such as pubs, bars, clubs, hotels, taverns, bookmakers and sports clubs. SunBet is an online sports betting platform.

Sun International CEO Anthony Leeming said this week: “We are not doing new, large, land-based projects but a lot more in the online space. We are reinvesting money from SunBet to try to gain market share in the online space.”

Sun International bought a 70% stake in SunBet Africa Holdings, which has online sports betting and casino licences in the countries the group is expanding into — Ghana, Zambia and Kenya. The online betting market is increasingly competitive as more people access the internet using smartphones.

“We are in the early stages of rolling out the SunBet operating model and brand in these markets, which have attractive longterm growth potential,” said Leeming. “We see strong growth in those countries. Growth will definitely be online.”

Companies such as MultiChoice have also ventured into online betting in a number of countries across the continent.

SunBet’s count of active players rose 50% in the year to December, while sports turnover grew 23%.

Leeming said SunBet “offers the group significant and exciting growth potential and ... we continue to invest in people, systems and marketing to significantly increase our share of the fast-growing online gaming market”.

SunBet was built “organically on a capital-light basis, leveraging the Sun International brand, presence and loyalty offering to attract and retain high-quality players at low cost of acquisition”.

The group reported a strong recovery in financial 2022, the first in which operations were largely free of pandemic trading restrictions.

Gaming, which made up 80% of group income of R11.2bn, was up 36%. The group was able to defend and grow market share in all provinces, while income generated from Sun Slots recovered to pre-pandemic levels.

Leeming said SunBet generated record income during the year to December and “is well on its way to achieving our aggressive growth targets for this business”.

He did not expect high growth from the casino business as some operations outside urban areas were still recovering from Covid interruptions.

The group would continue to engage with regulators to increase the rollout of LPMs from 5,160 active machines to the 6,500 that have been allocated.

The hotel business recorded a strong recovery with domestic leisure, conferencing, sports and events revenues exceeding 2019 levels, while the international leisure business performed well in the second half of the year.

Total resorts and hotels revenue was up 65% on the year before, to R2.5bn. Total revenue was in line with 2019 levels, while casino income exceeded that of 2019, helped by the Sun City resort and Wild Coast Sun.

Leeming expects the international leisure business to grow, saying “forward bookings look good”.

During the year to December, Sun International incurred between R12m and R14m in diesel costs a month. Leeming said most of its properties have backup power and the company is likely to spend less than R150m in financial 2023.

Business

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2023-03-19T07:00:00.0000000Z

2023-03-19T07:00:00.0000000Z

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