EC casino licences soon up for grabs - Wednesday 12th of October 2005

THE Eastern Cape is expected to call for proposals for the provinces remaining two casino licences, Economic Affairs MEC Andre de Wet said yesterday.

Interest had been shown in the two areas where licences were still available and the time was ripe to give them an economic boost, De Wet added.

The interest in gaming by South Africas conglomerates was shown in East London last week when giants Hosken Consolidated Investments and Johnnic brought their war for control of Tsogo Investment Holdings to the Eastern Cape Gambling and Betting Board over an increased shareholding in casino minnow Tsogo Sun Emonti, which runs Hemingways.

The big companies are fighting it out for a bigger share of South Africas R10,7 billion-a-year casino business.

Licences were granted for only three of the provinces five allocated licences in 1998. They went to the apartheid-era Wild Coast Sun on the KwaZulu-Natal border, the Boardwalk in Port Elizabeth and Hemingways.

When the three licences were granted no interest was shown in Zone Four, the Mthatha-Port St Johns area, and the bidders for Zone Three - covering Queenstown, Aliwal North and Graaff-Reinet - could not come up with the financial guarantees.

The provinces three casinos have shown that they are economic kickstart operations - apart from their tax contribution of R46,3m to the provincial fiscus in 2004/05.

De Wet said there was a lot of interest in developing tourism in both the Queenstown and Aliwal North area and investors "could be encouraged to increase their investment if they are prepared to make an application for a licence".

He added that when the initial licences were issued there almost seemed to be an oversupply of casinos in the market place but now the situation had stabilised and people wanted to invest in gaming.

De Wet is to ask the board to come up with suggestions on how the licence application process can be structured around the needs of the communities.

The existing casinos have been beneficial to the province in terms of both investment and job creation.

The total capital investment in the Boardwalk was R470m and in Hemingways R222m.

The industry directly employs 2602 people with a total payroll of R126m last year, a Casino Association of South Africa survey showed.

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