The race is on for 40 new casino licences, with black empowerment bidders in the forefront – but are casinos productive money-spinners? Ferial Haffajee reports
SUNDAY afternoon and the millions are calling. Although it’s a week before the end of the month, scores of cars hurtle past Pretoria, past the barren squatter camps of Hammanskraal and into the gateway of the pink oasis that is The Carousel.
Sun International’s gambling resort is an incongruous sight in the dry winter veld. Its glitzy luxury lies across the road from the dusty township of Maubane, where horse- drawn carts still rival taxis as the favoured mode of getting around. The resort is Sun International’s big money-spinner. It subsidises Sun City and draws an average 12 000 visitors a weekend.
Every weekend around the country, many South Africans make the same pilgrimage: to the Mdantsane Sun outside East London, the Wild Coast resort south of Durban or the mother of all resorts, Sun City in the North-West province. Lured by the promise of instant millionairehood, they arrive in bakkies and buses to feed the Dream Machine.
“I basically come here to win money,” says Adiel Prime, who makes the journey from his Johannesburg home every fortnight. He spends about R500 a trip and it’s a case of “sometimes you win, sometimes you lose” that keeps him coming back.
Casino gambling is pictured in advertisements as a Mongasque pursuit of the glamorous and wealthy, but it’s the ordinary folk who keep the cherries spinning.
The licence run is on and soon there will be 40 new casinos dotted around the country. It’s going to be a veritable Las Vegas, and the world’s biggest casino barons have descended.
The Americans are out in force. Malaysian, Austrian and French casino capital has tied up with the cream of black business.
Johnnic, Rethlabile, Co-ordinated Network Investments, Thebe Investments, Real Africa Holdings, as well as groupings like Women Investment Portfolio and the National African Federated Chambers of Commerce, are all bidding for licences. The run has been joined by the Congress of South African Trade Unions and the National Council of Trade Unions, the South African National Civics Organisation and sectoral unions, like the Mineworkers’ Investment Company, the Southern African Clothing and Textile Workers Union, and the South African Commercial Catering and Allied Workers Union.
They are being backed by local construction companies Murray & Roberts and Stocks & Stocks, while hotel chains Karos and Sun International have also tied up with local black partners to bid.
Like the day-visitors breaking their last fifty, investors may also be chasing a dream. Research by the horse-racing industry shows South Africa is not a gambling nation. The study of just under 1 000 people in all metropolitan centres found that one-third have never wagered a bet of any sort. Only one in three people who had tried slots said they would play again.
An Ernst & Young study commissioned by government on the viability of the gaming industry found earlier this year that planned casino projects suggested an investment of R20-billion, a figure likely to have increased. But the consultancy BusinessMap says total projected casino revenue is about R4-billion a year. “The overall size of the industry will be constrained by low levels of disposable income,” says Andy Brown.
Reuel Khoza says his Akani consortium is pleased with numerous feasibility studies that have shown potential returns have not been inflated. But while the debate on whether casinos are a viable destination for empowerment rands hots up, there’s little discussion of whether casinos are good for the country.
Leonard Gentle, a trade unionist who worked with the South African Commercial Catering and Allied Workers Union, says that in the United States, casino development accompanied deindustrialisation. In South Africa, it could replace productive investment.
Potential casino operators place a lot of faith in tapping into tourist-spend and the foreign exchange that it will bring. But the study found that tourists would contribute only about R25-million annually to the casino industry.
Casinos will be the cash cows the provinces so badly need – gambling tax is set at about 20% – and they are likely to grant every licence they can, regardless of long- term viability.
The granting of licences also rests on a clear social responsibility programme with job creation high on the list.
Gentle says casinos create few jobs. One- armed bandits are self-operated and gaming is capital-intensive. Other than security guards, croupiers (most of whom are foreign) and the odd cleaner, the industry is not big on jobs. Foreign investors are also tying their local investors into management contracts, which may see foreign staff being flown in to run casinos for the first few years.
Khoza says the construction of 40 casinos will generate thousands of building jobs in the medium-term. “There will also be options in horticulture, entertainment and taxis,” he believes. But benefits must be weighed against social costs.
Gambling is costing poor people a lot of money. For many it’s fun and relatively cheap leisure: most resorts offer attractive packages which get you there virtually free and then still give you coins to gamble with as well as discounts on drinks and food.
But boundaries between fun and addiction are easily crossed in a country where a world of plenty nestles so close to a world of poverty. Bongi Jona is from Soweto and goes to The Carousel once every few months. To win, she plans to spend R200 a visit. But when the going gets tough, she joins the long queue and draws a little more from the cash machines.
“It’s not spare money. It’s my transport money for the month. Sometimes I don’t have money to go home. Then I have to borrow. It’s better to buy a return ticket.”
Some consortia are aware that with more casinos nearer home, the incidence of desperate gambling may increase. A few agree there should be no casinos in townships, but there are no regulations preventing these. Others have suggested that an education plan be put in place to teach people to “gamble with their heads, not their hearts”, says Sun International.
But the lure of a million rand and more wads of notes or buckets of coins than you can count “is a heart thing”.
Tryphina Skosana is an off-duty policewoman from Soweto who grins at the prospect of casinos nearer to her home. “We will be very happy to go more often,” she says. It’s just after lunch on Sunday and Skosana has R350 left of the R500 she brought to spend. Her friend, biting her bottom lip, is less lucky.
“That’s R200 gone,” she sighs, sitting in the sun, waiting for the bus home.