DURBAN - Phumelela Gaming and Leisure fell more than 20percent on the JSE yesterday after the country’s largest horse-racing operator warned that the lockdown was a threat to its business, with more than 40000 jobs on the line.
The group said it planned to resume its operations next month, as it had not been able to stage races since the beginning of the lockdown last month.
Phumelela said its revenue had remained stagnant as a result.
It said independent studies calculated that some 40000 jobs were dependent on the horse-racing industry and could be affected if the lockdown continued beyond April.
“If racing is not given authority to resume in early May, together with the opening of betting shops, it is likely that a rationalisation of the entire horse-racing industry and associated value chain in South Africa will occur with consequent significant loss of jobs and reduced tax collections,” Phumelela said.
The group’s shares tumbled 20.86percent to R1.10 from Friday’s close of R1.39.
PHUMELELA says independent studies have calculated that about 40 000 jobs depend on the horse-racing industry and could be affected if the lockdown continued beyond April. Supplied
Phumelela said the industry could still survive the impact of the Covid-19 pandemic if the lockdown was lifted at the end of April and racing was permitted to resume.
It said racing could resume possibly behind closed doors on May 1.
“Racing fixtures have been rescheduled accordingly. The national horse-racing authority is co-ordinating representations on behalf of all the key players in horse racing to the national coronavirus command council,” the group said.
Phumelela said it was faced by circumstances beyond its control that would have a material adverse effect on revenue.
“Measures have been implemented to reduce costs where possible. However, many costs remain fixed. Phumelela’s share of betting levies, worth R75million a year, that were withdrawn in April 2019 have not yet been reinstated and urgent negotiations continue with representatives of the Gauteng government to do so,” the group said.
Last year, Public Protector Busisiwe Mkhwebane ordered the Gauteng Gambling Board to stop the 3percent levy paid to Phumelela.
Its sports betting division had also been affected by sporting fixtures such as soccer being cancelled.
“Online betting is open, but revenue is insufficient to compensate for this large void and betting opportunities have in any event been sharply curtailed,” the group said.