Casino Business in S.A Essay

Submitted By tikay01
Words: 1633
Pages: 7

Casino business in SOUTH AFRICA.
I intend to investigate the relevant changes in South Africa. The PEST factors I will be looking at is political and economical, and the chosen industry is Casino and gaming industry.
This is a very big business in South Africa because of tourism in the country and it contributes a good value to the GDP in access of 50billion Rands (£3.6billion) in the country and the casino market is currently employing about 33000 employees in 37 casinos in South Africa. I will first of all discuss the economic impact during the credit crunch of the year 2008/9 and how the industry combated the impact.
1. Job Losses in the country of more than 0.9 million jobs. This caused many casino customers to give up their membership because of job lose and job insecurity, they lost expandable incomes to spend in the leisure centres which include casinos, even the small business entrepreneurs were affected that they could not spare expandable incomes. Following that, casinos suffered reduction in the local market although the international market that is, tourism which also include Asian community (including Chinese and Indian) sustained the South African casino market. And also the hosting of a major sports tournament of the 2010 FIFA World Cup South Africa contributed to the casino market and to the economy in the form of hotel and tourism and employment which begun on construction projects which included stadiums and infrastructures on roads and the R20billion (£1.2b) new railway for the fastest train in S.A called the Gautrain. ( ) And eventually direct and indirect employment was created during the main tournament. This impacted the industry in a good way because many local and international customers could then afford spending on leisure and in the casinos.
In 2011 Mr Peter Lacazio confirmed the pickup of the market when a total staggering bets of €22.9 billion was accounted, which corresponds to 8.5% of the country’s GDP.
2. Acquisitions. Some casinos which could not stand the impact with the global financial crises had to sell their estates to mainly Tsogo Sun. This followed the acquisition of two South African operations, namely 100% of the Caledon Casino, Hotel, Spa in the Western Cape and 100% of the Century Casino Newcastle in KwaZulu-Natal, for a total purchase consideration of R490 million including the assumption of existing debt in the operations. The transactions will be funded from existing Tsogo Sun Group resources. Tsogo Sun is the biggest casino company which now owns 14 casinos and is segmented to hotels and also Tsogo Sun’s Responsible Tourism Strategy. The Casino and gaming industry is regulated by the South African Gambling commission. The commission also amended the gambling legislation on the 12 July 2008, and impacted on the market. Below is outlined the adverse and the positive impact of the amendment.
1. Registration of players - Most customers do not like to give away their I.D or to leave a record of participation in the gambling institute. So some customers grow less and lesser interest in visiting the casinos.
2. To comply with the central intelligent centre act. This act was set to support and to campaign against money laundering. This makes the big spenders avoid spending their money in the casinos to avoid unnecessary interrogation or further enquiries of evidence of their source of monies. This act affected the South African casino industry negatively.
3. Market expansion through licensing by the Government: The business forecast was good in the tourism and South African Casino market due to the forthcoming of the world’s biggest foot ball tournament in 2010. So the market went boom in a very short period of time. Casino operations opened to new geographical venues to expand their businesses. More Casino buildings and acquisitions, that is: