Sun International’s online betting platform, Sunbet, is increasingly becoming a main cog in the group’s revenue arsenal as more South Africans turn to online betting avenues to source extra income, a practice the government aims to rein in.
The hospitality group on Monday said income for Sunbet surged 75.9% for the year ended December to R2.1bn, driven by “higher levels of customer engagement and increased deposits”.
The group said it will continue to focus on the user experience and product capability supported by strong momentum in customer acquisition and retention.
“Sunbet remains well positioned in an expanding market and continues to deliver strong growth; management remains focused on investing to further scale the business and enhance long-term returns. This includes significant investment in technology to enhance our product offering and provide greater scalability and leverage in future years,” the company said.
“The business benefits from scalable systems, experienced and specialised teams, robust technology platforms and a broad, competitive product offering, supported by high service levels and a seamless customer journey with minimal friction points.”
Sun International’s land-based casinos in South Africa continue to be the group’s cash cow, accounting for just more than half of its total income of R12.9bn in the year under review.
To bolster its land-based casino business, the group in January hired Mark Sergeant to oversee its land-based revenue across the group, bringing to the role years of experience, including stints at two of the UK’s largest casino groups.
The online gaming business is the fastest-growing revenue in the group’s portfolio. Earnings in this business are set to come under pressure if the National Treasury follows through on its proposal to impose a 20% gambling tax to curb the surge in online betting.
Sun International CEO Ulrik Bengtsson said the online gaming sector in South Africa is still developing and any changes to the tax regime should be carefully calibrated to avoid undermining the regulated market, inadvertently encouraging illegal activity or reducing the tax base.
“Sun International welcomes a robust and predictable regulatory framework that balances customer protection with the long-term sustainability of the industry. Any regulatory or tax changes should be informed by global best practice and sound empirical evidence, and we believe the current proposal requires further consideration to ensure it achieves the intended policy objectives,” he said.
“We remain committed to constructive consultation and dialogue with the government to ensure that the regulatory environment supports responsible gambling while allowing the industry to continue to grow and invest. We have set out these concerns in our submission to [the] National Treasury and will continue engaging with the authorities as the consultation process unfolds.”
Revenue for the group’s hotels and resorts portfolio, which includes its flagship property, Sun City, declined 10% to R2.9bn while Sun Slots’ revenue inched up 2% to R1.4bn in the year under review.
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