Sun International, which owns Sun City, Grandwest, Table Bay Hotel and various gaming businesses, has reported exponential growth in its online gambling division that offers sports betting and betting on live casino games.
Sun International makes almost 77% of its revenue from gambling, mainly from land-based casinos such as Sun City and Time Square, and recorded about R9bn in gaming turnover last year. It reported R12.1bn in overall revenue for the 2023 year to end-December.
Gambling, or gaming as it is called by the industry, has grown significantly in SA since 2010, with the highest growth in recent years from sports, horse racing and online betting.
Sun International CEO Anthony Leeming in a presentation said that SA’s industry-wide gaming revenue for the year to end-December reached R55.8bn, up from R16.9bn in 2010, with a compound annual growth rate of 8.9%.
The industry has grown in SA as what usually took place at a casino can now be done online through sports betting or at limited payout machines.
In 2023, Sun International’s online gambling business, SunBet, grew 116.2%, “which was ahead of its aggressive growth targets set for this business”.
While this part of the business is growing the fastest, it is the smaller earner for the Sun International. Its urban casinos division, which includes Grand West, Carnival City and Durban’s Sibaya Casino & Entertainment Kingdom, recorded R6.7bn in revenue, while the online division brought in R733m.
The online gambling business had an average of R8.2bn in deposits a day and a total deposits of R3bn, up from R1.1bn in 2022. Its players increased from 109,122 in 2022 to 403,105.
The number of first-time players who deposited money grew from 45,604 players in 2022 to almost 177,000 in 2023, an increase of almost 270%.
The group said of its online business, “SunBet offers the group significant and exciting growth potential and so the group continues to invest in people and marketing to increase its share of the fast-growing online gaming market”.
The group, which has less than 3% of SA’s online betting market share, improved SunBet’s call centre, the registration process as well as the deposit and withdrawal processes, which led to growth.
“Our customers are now able to interact with us seamlessly and we are well positioned operationally for higher volumes of business,” Leeming said.
He said there was a lot of noise about the fact online gaming was growing and he expected more regulation in the space. It is already regulated with online sites requiring national gambling licences.
“We are ahead of the curve,” he said referring to comparisons of the company’s online sites to international peers in terms of preparedness for regulations, and it was adapting systems to be ready for more regulations.
While wanting to push responsible gaming, the National Gambling Board, the gaming regulatory authority, was also promoting more gaming, which would provide opportunities he said.
The hospitality group also operates limited payout machines under the SunSlot brand, in which it places slot machines in bars, hotels and at bookmakers.
Income in this division was down 2.7% to R1.5bn and adjusted ebidta was 8.1% lower to R351m as load-shedding meant machines were not always working. The slow regulatory environment also delays the rollout of more limited payout machines.
Sun International’s hotels include the Table Bay, the Maslow in Johannesburg and various resorts at Sun City. It recorded growth in this division, up 17.4% to R3bn.
Table Bay Hotel occupancies grew 72.2%, up from 55.7% in 2022 as Cape Town tourism had an excellent year. Revenue was up at the hotel by almost 55%. This was record growth, Leeming said, and exceeded prepandemic levels.
The luxury hotel will be closed in March 2025 for refurbishment and opened again under an international brand at end-2025.
Sun International paid a dividend of R2.03, which is 75% of its adjusted headline earnings per share.
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