A SOUTH AFRICAN PERSPECTIVE FY2017 Presentation to GRAF 26 April 2017 1 CONTENT Introduction amp Mandate Data Gathering and Processing National Gambling Statistics ID: 589242
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GAMBLING SECTOR PERFORMANCE:
A SOUTH AFRICAN PERSPECTIVE, FY2017
Presentation to:
GRAF 26 April 2017
1Slide2
CONTENT
Introduction & Mandate
Data Gathering and Processing
National Gambling Statistics Market Conduct Tracking Over Time Broad-Based Black Economic Empowerment Direct Employment Figures Advantages of Monitoring Gambling Sector Performance
and Tracking of Data over Time 2Slide3
INTRODUCTION
Based on Section 65(2)(e) in the
National Gambling Act
(No 7 of 2004),
it is required from NGB to monitor market conduct and market share and refer any concerns regarding market share or possible prohibited practices to the Competition Commission Initially, only National Gambling Statistics (turnover, Gross Gambling Revenue (GGR), taxes/levies) were monitored and reported on
NGB started with the monitoring of the number of operational and licensed slots, tables and positions
, however, later on also added
totalisator
and
bookmaker outlets
,
bingo outlets and positions
,
as well as active Limited Payout Machines (LPMs) The number of licensed and operational operators were also added Lastly, NGB also started with the monitoring of Broad-Based Black Economic Empowerment (B-BBEE) contributor levels, as well as direct employment figures
3Slide4
DATA GATHERING & PROCESSING
NGB
gathers required information
in terms of provincial gambling statistics
(turnover, GGR and taxes/levies) relevant to all regulated gambling modes i.e. casinos, racing and betting, limited pay-out machines and bingo, as well as information on market conduct i.e. number of operational gambling positions, operators and outlets from all Provincial Jurisdictions across South Africa PLAs receive quarterly templates to complete
based on variables listed Quarterly submissions of completed templates in terms of statistics
and market conduct and annual verification of all quarterly figures
Annually submission in terms of B-BBEE contributor levels and direct
employment figures per operator – this year the number of direct
employment in NGB and Provincial Jurisdictions as at
31 March 2017 was also added 4Slide5
DATA GATHERING AND PROCESSING
NGB researchers
review and monitor information to identify
obvious mistakes based on trends over time
, or any other figure that might be incorrect; and request Provincial Jurisdictions to review their submissions and submit again Internal databases are updated and again figures are closely monitored
and compared to pick up any possible mistakes – and resubmissions requested from Provincial Jurisdictions where required
Information is sourced from the databases and templates to update
and add new trends and insights to reports (which were developed and
extended over time as the need arose and more information has
become available)
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DATA GATHERING AND PROCESSING
Information is reported on in
quarterly and annual reports – and information analysed and presented per mode, province and holistically in terms of statistics, market conduct, market share. A summary report FY2016 is published on the NGB website, and reports shared with key external stakeholders. Audited national gambling statistics are also published annually
It
took NGB many years to develop our Gambling Sector Performance
reports and we are proud to announce that we often present content to
Portfolio Committees / Ministerial Meetings / Inter-Governmental
Forums
The gathering and verification of information requires constant communication with and feedback to all Provincial Jurisdictions and excellent relationships have been built over time
6Slide7
DATA GATHERING AND PROCESSING
Without the cooperation
and
assistance of all our
Provincial Jurisdictions, the compilation of these reports would not have been possible!!
7Slide8
DATA GATHERING AND PROCESSING
The challenge was how to
integrate, analyse and report on a lot of data
identify key observations and determine the “so what” of what is hidden between the figures!
8Slide9
NATIONAL GAMBLING STATISTICS
9
Let’s start at the very beginning …. Slide10
NATIONAL GAMBLING STATISTICS
10
GGR per gambling mode – FY2016,
Qrt 1, 2, 3 & 4Rand value of the gross revenue of an operatorSlide11
NATIONAL GAMBLING STATISTICS
11
GGR per province - FY2016,
Qrt 1, 2, 3 & 4 Rand value of the gross revenue of an operatorSlide12
NATIONAL GAMBLING STATISTICS
12
Trend in GGR –
FY2001/02 to FY2015/16 (all modes and provinces)Rand value of the gross revenue by an operator
Increase Slide13
NATIONAL GAMBLING STATISTICS
13
Trend in taxes/levies – FY2001/02 to FY2015/16
(all modes and provinces)Gambling tax levied and collected by PLAs
IncreaseSlide14
NATIONAL GAMBLING STATISTICS
14
Are these figures really telling any story? Slide15
MARKET CONDUCT
15
Let’s add to the existing …. And see …??Slide16
OPERATIONAL CASINOS AS AT 31 DECEMBER 2016
7
4
3
4
5
4
3
38 operational casinos out
of 41 available
licences
Most casinos in Gauteng
3
5
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
16Slide17
OPERATIONAL CASINO POSITIONS AS AT 31 DECEMBER 2016
13 421
2 560
732
927
1 795
1 362
1 941
6 102
4 400
Growth in positions in Eastern Cape and KZN
Total FY14: 31 860
Total FY15: 33 360
Total FY16: 33 618
Total FY17: 33 240
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
4.7% increase
0.8% increase
1.1% decrease
17Slide18
OPERATIONAL BOOKMAKERS OUTLETS AS AT 31 DECEMBER 2016
102
50
3
51
31
5
36
86
146
Increases in all provinces except Western Cape and Free State
Total FY14: 369
Total FY15: 435
Total FY16: 457
Total FY17: 510
17.9% increase
5.1% increase
11.6% increase
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
18Slide19
OPERATIONAL TOTALISATOR OUTLETS AS AT 31 DECEMBER 2016
178
23
2
20
20
17
15
112
61
Growth in Western Cape, North West and Mpumalanga
Total FY14: 389
Total FY15: 402
Total FY16: 460
Total FY17: 448
3.3% increase
14.4% increase
2.6% decrease
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
19Slide20
ACTIVE LPMs AS AT 31 DECEMBER 2016
2 262
206
1 036
815
370
773
2
289
1 857
1 832
Increases in all provinces except KZN
Total FY14: 9 288
Total FY15: 10 279
Total FY16: 10 934
Total FY17: 11 440
10.7% increase
6.4% increase
4.6% increase
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
20Slide21
OPERATIONAL BINGO POSITIONS AS AT 31 DECEMBER 2016
EBTs: 4 387
Traditional: 2 052
North WestEBT:
447Trad: 113
Total:
560
Growth in North West and Eastern Cape (EBT’s)
Total FY14: 4 557
Total FY15: 5 369
Total FY16: 6 032
Total FY17: 6 439
Gauteng
EBT:
1 930
Trad
:
926
Total:
2 856
Mpumalanga
EBT:
170
Trad
:
159
Total:
329
KwaZulu-Natal
EBT: 0
Trad
:
854
Total:
854
Eastern Cape
EBT:
1 840
Trad
: 0
Total:
1 840
17.8% increase
12.3% increase
6.7% increase
Increased since FY2016
Unchanged since FY2016
Decreased since FY2016
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OVERVIEW OF THE INDUSTRY AS AT 31 DECEMBER 2016
VARIABLE
NUMBER
Operational casinos
38Operational casino positions (slots and tables)
33 240Operational totalisator outlets 448
Operational
bookmakers
255
Operational bookmaker outlets
510
Operational LPM site operators
2 170
Operational active LPMs 11 440Operational bingo outlets36Operational bingo seats6 439
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MARKET CONDUCT
23
What is the data telling us at this point?
1. Gauteng has the biggest market share in terms of number
of casinos and established industry Increase in casino gambling positions only in
KwaZulu
-
Natal and Eastern Cape
Increase in bookmaker outlets in almost all provinces
No growth in totalisator outlets
Growth in active LPMs (in 8 out of 9 provinces), however,
less growth expressed in % compared to previous FYsGrowth declined in bingo industry, however, more Electronic Bingo Terminals (EBTs) than traditional bingo
positions
But is this really telling us the full story?Slide24
TRACKING OVER TIME
24
Let’s
start tracking and see what we discover over time……? Slide25
GROWTH MARKET CONDUCT: FY2014 – FY2017
Times Square Casino at
Menlyn
Maine
Pretoria opened on 1 April 2017– expect increase 25Slide26
INCREASE IN NUMBER OF ACTIVE LPMs
26Slide27
INCREASE IN GGR (ALL MODES): FY2014 – FY2017
Increase in GGR - Casino:
FY2014 to FY2015 = 4.5%
FY2015 to FY2016 = 5.8%
Increase in GGR - Betting:
FY2014 to FY2015 =
22.2%
FY2015 to FY2016 =
28.5%
Increase in GGR - Bingo:
FY2014 to FY2015 =
52.5%
FY2015 to FY2016 =
-16.1%
Increase in GGR - LPM:
FY2014 to FY2015 =
19.6%
FY2015 to FY2016 =
13.7%
9.6%
8.8%
27Slide28
INCREASE IN GGR (BETTING): FY2013 – FY2017
28Slide29
INCREASE IN TAXES/LEVIES (BETTING): FY2013 – FY2017
29
Trend in taxes/levies, bookmakers &
totalisators, FY2010 to FY2016 Gambling tax levied and collected by PLAs
Bookmakers offering betting
on sport generate the most GGR,
however, pay less tax compared to
other operatorsSlide30
GGR – TREND OVER TIME: FY2010 – FY2017
Betting
LPM
Bingo
In comparison to other modes,
the % GGR relative to casinos
declined over time
out of the total
as a result of
growth in other modes
over time
30Slide31
INCREASE IN OPERATIONAL TRADITIONAL POSITIONS VERSUS
ELECTRONIC BINGO TERMINALS (AS AT 28 FEBRUARY 2017)
31Slide32
TRACKING OVER TIME
32
New insights added:
Eastern Cape emerging as province rolling out LPMs, to such an extent that it is expected that EC will overtake Western Cape’s market share as 3rd biggest market share holder (LPM sector)Biggest growth in GGR (expressed in %) and compared to other gambling modes, highest increases noted by bookmakers offering betting on sport
Bookmakers offering sport generated highest GGR in betting industry, but pay less tax than others in the same sector Market share held by the casino sector expressed in GGR and compared to other sectors, has declined over time as a result of growth in other sectors5. EBTs are preferred to traditional bingo – increases in operational bingo positions mainly as a result of increases in the number of operational EBTs Slide33
MARKET SHARE
33
Let’s
have a look at ownership?
Might just add some additional flavour to the mix?Slide34
MARKET SHARE CASINOS
OPERATIONAL CASINOS OPERATORS AS AT 31 DECEMBER 2016
34Slide35
MARKET SHARE TOTALISATORS
OPERATIONAL TOTALISATORS AS AT 31 DECEMBER 2016
Phumelela
Gold Circle
GautengMpumalanga
Limpopo
North West
Northern Cape
Eastern Cape
Free State
Western Cape
KwaZulu-Natal
The Competition Commission has approved with conditions the intermediate merger whereby Phumelela intends to acquire 50% of the issued share capital in Supabets (24 August 2016)
Impact Unknown
35Slide36
MARKET SHARE LPMs
OPERATIONAL LPM OPERATORS AS AT 28 FEBRUARY 2017
LICENSED LPM ROUTE AND INDEPENDENT OPERATORS PER PROVINCE, FY2017 AS AT 28 FEBRUARY 2017
Gauteng
Western
Cape
KwaZulu-
Natal
Mpuma-
langa
Limpopo
North
West
Northern Cape
Eastern Cape
Free State
Vukani Gaming
Gold
Rush Gaming
Grand Gaming
Crazy
Slots
Hot Slots
Vukani
Gaming
Grand Gaming
Vukani Gaming
Kingdom Slots
KZN Slots
Luck@it
Galaxy Bingo
Great Bingo
Goldrush Bingo
Vukani Gaming
Grand Gaming
Galaxy Gaming Entertain-ment
Vukani Gaming
Gold Rush
Gaming
Vukani Gaming
Gold Rush Gaming
Bathusi Invest-ment
Varloflash
Vukani Gaming
Gold Rush Gaming
Vukani Gaming
Pioneer
Vukani Gaming
Gold Rush Gaming
Tsogo Sun bought Vukani Gaming in 2016
36Slide37
MARKET SHARE BINGO
OPERATIONAL BINGO OPERATORS AS AT 15 MARCH 2017
LICENSED OPERATIONAL BINGO OPERATORS PER PROVINCE AS AT 15 MARCH 2017
Province
Gauteng
Western
Cape
KwaZulu-
Natal
Mpuma
-
langa
Lim-
popo
North
West
Northern Cape
Eastern Cape
Free State
Bingo operators per province
Goldrush
Galaxy
Bingo
N/A
Goldrush
Galaxy
Bingo
Great
Bingo
Goldrush
N/A
Goldrush
Galaxy
Bingo
N/A
Goldrush
Galaxy
Bingo
Boss
Gaming
N/A
Tsogo Sun bought Galaxy Bingo in 2016
37Slide38
MARKET SHARE
38
Tsogo
Sun has market share in
Casino, LPM and bingo sectorsSlide39
B-BBEE
39Slide40
B-BBEE CONTRIBUTOR LEVELS AS AT 31 MARCH 2016
NGB also tracks B-BBEE contributor levels over time to monitor
transformation in the South African gambling industry
Based
on the information submitted by PLAs, the average B-BBEE status or contributor level
of the South African gambling industry as at 31 March 2016 per gambling mode and operator, was as follows:
Average
B-BBEE level for
casino
operators:
Level 2.2
Average
B-BBEE level for
totalisators: Level 2.3
Average
B-BBEE level for
LPM
operators:
Level 2.7
Average
B-BBEE level for
bingo
operators:
Level 1.6
In general, noted a move closer to Level 2, however, not at the pace
anticipated or intended
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DIRECT EMPLOYMENT FIGURES
41Slide42
DIRECT EMPLOYMENT AS AT 31 MARCH 2016
DIRECT EMPLOYMENT PER PROVINCE AND MODE, FY2016
PROVINCE
FY
2016
Gambling mode
Gauteng
Western
Cape
KwaZulu-Natal
Mpuma-langa
Limpopo
North
West
Northern
Cape
Eastern Cape
Free
State
TOTAL
Casinos
5 366
1 862
2 643
630
728
786
305
1 784
545
14 649
Totalisators
44
20
Combined with bookmaker figure
64
84
69
13
83
73
450
Bookmakers
62
179
1 675
1
566
887
337
41
308
101
4 156
LPMs
237
95
101
112
715
252
9
869
14
2 404
Bingo
364
0
244
88
0
107
0
619
0
1 422
Total
6 073
2 156
4 663
1 460
2 414
1 551
368
3 663
733
23 081
Biggest contributors: Casinos, Gauteng & KwaZulu-Natal
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ADVANTAGES OF MONITORING GAMBLING SECTOR PERFORMANCE AND TRACKING OVER TIME
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ADVANTAGES OF MONITORING GAMBLING SECTOR PERFORMANCE AND TRACKING OVER TIME
44
Monitor performance and
track growth per sector
Able to determine impact of sector(s) on others in terms of growth (market share and market conduct)
Monitoring of GGR and market conduct per province enables NGB to track performance and growth per province
4. Building up of a solid database for economic analysis
5. NGB has become the
nodal point
for gambling related and
specifically statistical
information
6. The database built over time contains valuable and trackable data to determine growth over time, attend to economic analysis and evaluate year on year dataSlide45
ADVANTAGES OF MONITORING GAMBLING SECTOR PERFORMANCE AND TRACKING OVER TIME
45
NGB regularly
publishes information on its website
for easy reference and makes information available to external stakeholders8. Gambling sector performance information is a solid basis
for further research that NGB is currently embarking on i.e. determining the growth and transformation in the
gambling sector
, as well as advanced economic research
to determine i.e. the
impact of one sector on another
Relative
easy to attend to requests for information due to the wealth, variety, extend, scope and format in which information is captured, packaged, processed, analysed and reported on over timeSlide46
KEY OBSERVATIONS
46
Visit NGB website
www.ngb.org.za
for the latest information
related to research, statistics and
other gambling related
messages Slide47
QUESTIONS AND COMMENTS
Presenter:
Ms Estelle Jonkheid
Senior Manager: Research & Information
National: 01000 33478E-mail: ejonkheid@ngb.org.zaWeb: www.ngb.org.za Address: 420 Witch-Hazel Avenue, Eco-Glades 2, Block C, Eco-Park, Centurion, 0144
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