Sun International is seeking acquisitions in online-based gaming businesses as it ponders the revival of its land-based casinos, which are under pressure.
The owner of Sun City Resort, The Maslow Hotel, Meropa and GrandWest Casino wants to bolster its digital betting business as more people shift to digital platforms. In the half year to June, Sunbet group grew income 70.7% to R874m, primarily driven by a 128.7% increase in slots income, generated by increased customer activity and deposits.
According to new CEO Ulrik Bengtsson, who joined the company in July: “We’re not going to buy any more hotels. I can tell you that. But ... we are looking at M&A opportunities, regardless of category ... But I would probably think that we were more receptive to online acquisitions than land-based acquisitions at this point.”
He said having appealing products was crucial in online business, as was evolving them to meet fast-changing customer behaviour, which changed much quicker online than in a land-based environment.
“It requires you to have a huge amount of capabilities, knowledge and understanding of the expectations of the customer. So product, product, product; I think it’s super important.”
Asked if online betting within the Sun International stable would overtake land-based casinos in the future, Bengtsson said: “It’s not about what the customer wants, right? But it’s about what the customer prefers and how we best can serve the customers.
“Whether that is online, whether that is in our physical environment, land-based environments, or if there's a combination of that, our job as a company is to make the total experience as good as we possibly can for our customers — and we will try to use our land-based assets as a part of that, because we think it’s important.”
Urban casinos — which remained the cornerstone of Sun International’s land-based operations — reported income of R3.2bn, representing a 1.4% year-on-year decline. As the land-based casino market continued to be under pressure, the company was reassessing its approach to its portfolio of businesses.
Bengtsson said Sun International was reviewing the “value these properties bring to our group as it stands now ... We'll see how that looks when we’ve done that work.”
He said the market was declining 3.75% and “we are doing better than that, but we have seen that we have some operational challenges in the business that I think we should be addressing”.
Part of that decline was market-related, “but I think there is a part that is operational, for the industry to simply be more innovative, understand the customers better and be more relevant”.
The group has implemented a new operating model to position the urban casino portfolio — which will be reporting directly to Bengtsson — as integrated entertainment destinations. Investment is being directed towards casino floor optimisation, service enhancements, product innovation, as well as improved marketing to better convert footfall.
Bengtsson has been CEO of listed companies and consumer services groups across gaming, betting, broadcasting and telecom industries for nearly 20 years, most recently serving as CEO of UK-based gaming group William Hill Plc. Before that, he served as president and CEO of Swedish-listed online gaming group Betsson AB.
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