With the COVID-19 pandemic affecting most industries, the gambling sector of South Africa also wasn’t spared. However, as most of the country opened up under lockdown level 3 on 26 July 2021, casinos were included in the activities that are open to the public, alongside cinemas, theaters, gyms, pools, and restaurants.
But how far-reaching are the consequences that a year and a half of living under strict coronavirus measures had on the casino industry? Read on for more in-detail information about the land-based and online casino operators in South Africa.
The situation with land-based casino establishments
When it comes to the land-based casinos, all venues were officially closed on 26 March 2020, two weeks after the World Health Organization declared COVID-19 a pandemic. While hotels, resorts, casinos, and restaurants were allowed to reopen on 17 June 2020, there were certain restrictions that they had to abide by. For example, they had to operate at 50% of their capacity, alcohol consumption and smoking indoors was prohibited, every other slot machine had to be switched off, and barriers between players and dealers had to be installed.
Moreover, Sun International said that the opening of Sun City and Wild Coast Sun might be impacted due to inter-provincial travel being restricted. Back then, the company said that it expects trading to start slowly and that some restructuring might be necessary. It also anticipated temporary layoffs and significantly reduced hours.
Sun City started welcoming guests again on 2 September 2020 and international travel for leisure and business purposes was resumed on 1 October 2020 with strict restrictions. Even though the operations picked up again in the last quarter of 2020, Sun International still reported a loss of R1.1 billion. The company’s overall income in South Africa declined by 48% from 2019.
While the company announced restructuring even before the pandemic and saw a headcount reduction of 63 in February 2020, the closing down of venues caused by the lockdown led to Sun International deciding to stop trading at Naledi Sun as well close down its Carousel property. The latter is one of South Africa's oldest casinos, which has a municipal valuation of over R500 million. However, in December, it was announced that the Carousel Casino license has been sold to an undisclosed buyer and that it will reopen on December 15. What is more, another 2,300 employees are facing job cuts as the company tries to deal with the economic hit from the pandemic.
There are more than 30 land-based casinos in South Africa, and not all of them are owned by Sun International. In August 2021, it was announced that Metropolitan Gaming had acquired the African casino businesses of Caesars Entertainment, Inc. In the statement, it was said that they plan to focus on job creation and providing customers with a safe, fun, and memorable experience. Caesars saw a $352 million net loss increase during the first half of 2021, despite having a 615.7% year-on-year increase in revenue, which certainly led to the acquisition.
Online Casinos in South Africa
On the other hand, while land-based establishments were struggling, the online casino industry skyrocketed during the pandemic.
Although the National Gambling Act of 2004 banned online gambling and September 2011 laws clarified that operating an online casino is illegal in South Africa, citizens still enjoy various games. As these laws are mostly in place to deter operators from opening a business in South Africa, players themselves are not targeted. With that in mind, South Africans have a wide array of reputable out-of-state casinos to choose from. For example, according to PlayCasino, players can pick from dozens of online games and casinos that don’t require a deposit to play and can opt for anything from slots to table games.
Seeing as how online casino games can be played from the comfort of one’s home, the fact that this approach to gambling saw such a boost should come as a surprise to no one. All that a gambling enthusiast has to do is visit a review website to find the best casino available, make an account, and start playing games. There is no need to leave one’s home and risk getting infected.
However, as online casinos are not legal in South Africa, all operators are based in foreign countries. This basically means that the country is not reaping all the economic benefits of this sector, such as taxes and incorporation fees. Moreover, while online casinos could provide more jobs for locals such as designers, dealers, and customer service representatives, no such thing is available.
It should be, however, noted that online lottery games, bingo, and scratch cards are all available in South Africa so at least that aspect of gambling is being capitalized on.
The land-based casino industry has suffered quite big losses during the first year and a half of the pandemic. As there is currently no end in sight, it remains to be seen how large a loss they are yet to face. On the other hand, while not technically legal, online casinos are thriving and will surely continue to enjoy these circumstances.