Legal complaints against Phumelela to the Competition Commission negatively impacted the group's local operations, according to one of South Africa's largest gaming and leisure companies. In addition, reduced betting on live international racing also affected numbers, it said.
"The legal costs were incurred in answering complaints lodged with the Competition Commission and the Public Protector against Phumelela and Tellytrack's reply to complaints lodged at certain gambling boards," noted Phumelela in a statement this week.
"Following the refusal by bookmakers to pay a fair value for the right to display international content in their betting shops, the international racing operators instructed Tellytrack to remove their content from Multichoice's channel 239 and to make such content available only to bookmakers."
Because of customers who were unable to view live international racing from the comfort of their own homes, less people bet on international racing, which impacted Phumelala's operations.
Nevertheless, Phumelela was able to see a growth in income of 7% in local operations, meaning that for the year ending July 2014, numbers went up from R901 million in 2013 to R967 million this year. International operations performed even better, with a growth of nearly 100% from R113 million in the same period in 2013 to R224 million this year.
The group said that international operations in foreign currency are fundamentally important to Phumelela's financial wellbeing. It also said that the weakness of the South African rand contributed to this growth.
"Profit before tax from international operations increased by 47 per cent benefiting from the export of South African thoroughbred horseracing media rights together with the concomitant betting thereon and from the group's Isle of Man joint operation," said the group.
Other numbers reported by Phumelela as follows:
* Group profit before income tax grew by 17% to R129 million, up from R111 million from last year.
* Earnings per ordinary share grew 29% to 146c (from 113c).
* Headline earnings grew 15% per share to 132c (from 114c).
Looking ahead, Phumelela said that international operations continue to grow, and a proactive strategy to diversify and offering new betting opportunities has become a priority for the group.
It said that it was considering more initiatives that would support the "competitive appeal of South African thoroughbred horseracing, which has shown an encouraging renewal of interest, growth and on-course attendance."