South Africa’s gross gambling revenues (GGRs) are forecast to increase from last year’s R27 billion to R35bn in 2021. Photo: AP
JOHANNESBURG - South Africa’s gross gambling revenues (GGRs) are forecast to increase from last year’s R27 billion to R35bn in 2021 or a 5.1 percent compound annual increase.

This according to auditing firm PwC’s sixth annual edition of the Gambling Outlook for South Africa: 2017-2021 report released on Wednesday.

It said gambling taxes and levies, which rose 4.9 percent to R2.7bn last year, would grow at 5.2 percent compound annual rate to R3.5bn in 2021.

Casinos, which directly employ more than 10 000 people for its operations and accounted for 66 percent of total GGRs, remained the largest contributor to gambling taxes and levies at R1.8bn. It was followed by the betting segment at R430 million.

The report shows that Bingo was the fastest-growing category as it accounted for 5 percent of total GGR in 2016, up from 4 percent in 2015, buoyed by a 36.6 percent rise in GGR. Gauteng generated 65percent of the total growth in bingo GGR, with a 37.6percent increase to R813 million. 

For the forecast period as a whole, bingo GGR is expected to increase at an 11.9 percent compound annual rate, from R1.3bn in 2016 to R2.2bn in 2021. After registering a notable decrease between 2012 and 2016, lottery ticket sales increase last year, leading to lottery GGR rising 34.7 percent to R2.98bn.

The National Lottery GGR was projected to increase to R3.08bn in 2012 from R2.98bn in 2016, which is a 0.7 percent compound annual increase.

Sports betting rose 21.3 percent in 2016 to R2.9bn, more than three times the R847m total recorded in 2012.  

Major international tournaments including the Fifa World Cup, Rugby World Cup, and the European Championship were credited for further boosting the volume of betting. Its GGR was projected to rise at a 12.3 percent compound annual rate to R5.2bn in 2020. Horse racing rose 6.2 percent last year with much of the growth recorded in Eastern Cape and its GGR was forecast to increase to R2.3bn in 2021.

PwC South Africa’s gambling industry leader Pietro Calicchio said: “The gambling industry in South Africa will continue to be adversely affected in the near term by slower economic growth, but improving economic conditions over the latter part of the forecast period will aid growth. The industry remains an important contributor to the economy through the creation of jobs, continued capital expansion and the payment of taxes to both provincial and national government.”

Calicchio lashed out at illegal gambling for continuing to be a “problem” in the country, saying the scourge has resulted in R1.9bn lost in GDP for the 2016 financial year and a loss of much-needed 3 785 jobs.

- BUSINESS REPORT