Sun International CEO Ulrik Bengtsson has warned that weak regulation of online gambling could rapidly erode the state’s tax base by driving punters to illegal offshore operators.
Speaking to Business Day after the group’s results on Monday, Bengtsson said licensed operators could thrive only if regulation struck the right balance between protecting consumers, ensuring the state collects revenue and allowing companies to offer competitive products. If the system failed on of those fronts, he said, “the black market will grow and the tax base will erode very quickly”.
The comments come as regulators face a growing surge in unregulated online betting.
Trade, industry & competition minister Parks Tau recently told parliament that the National Gambling Board (NGB) had identified 90 illegal gambling websites, most licensed and registered overseas. He said the NGB forwarded 10 of these sites to Google Africa for removal last year, but none had been taken down at the time of his reporting.
The size of the online betting market underlines the challenge. Research firm Reveal estimates the industry was worth R1.14-trillion in 2023/24, with sports betting alone accounting for R761bn. Its data set of more than 640,000 consumers shows that nearly 30% deposited money on online betting platforms in the 18 months to January 2025, suggesting that as many as 10-million South Africans may have participated.
Online vs offline betting
This rapid rise of online betting has already reshaped the industry, according to Bengtsson, who said the task now is to ensure that local regulations keep pace. “The offline market is not attractive enough compared with the online one. Get regulation wrong and you risk losing customers to unlicensed operators along with the tax revenue they generate.”
Sun International’s results illustrate that shift. While its casino division remained under pressure, its online business, Sunbet, surged 70.7% in the first half of the year.
When Bengtsson was appointed CEO in July, he said his three main priorities were scaling Sunbet to secure long-term market share, improving execution across the group’s land-based gaming portfolio and evolving the hospitality business model to unlock new growth.
Interim results
The hotel and casino group’s profit more than doubled at the halfway stage of the financial year, helped by a strong performance by Sunbet and careful cost management across the group. Headline earnings per share (HEPS) rose 60.5% to 305c, it said.
Excluding the Table Bay Hotel, continuing income grew 6.7% to R6.1bn, while adjusted earnings before interest, taxes, depreciation and amortisation rose 1.1% to R1.6bn, with a margin of 25.4%. The group said Sunbet contributed R874m to earnings.
An interim dividend of 172c per share was declared, up 6.8%, and in line with its policy of paying 75% of adjusted HEPS.
The group converted 62.4% of R1.7bn cash generated from operations into free cash, cutting net debt to R5bn and lowering interest costs by 15%.
Resorts and hotels revenue rose 4.3%, supported by a recovery in conferencing and events, while urban casino income fell 1.4%.
Growth strategy
Sun International said it continued to focus on growth through Sun Slots expansion, digital gaming and selective acquisitions, while keeping debt under control and maintaining dividends.
“Following the mutual decision not to proceed with the Peermont acquisition, the group benefits from a strong balance sheet, which provides optionality around the deployment of our capital. We will look at our capital allocation policy to ensure that in the future we have the right balance between returns to shareholders, investment in the business, and value accretive mergers & acquisitions,” Bengtsson said.
“The group is well positioned for sustainable growth, supported by the optimisation of urban casinos, strong momentum in digital conversion for Sunbet, selective expansion in Sun Slots and the usual seasonal rebound in resorts and hotels. On an ongoing basis, we will continue to improve the infrastructure and casino offering and seek growth in selective regulated African markets for Sunbet.”
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