New Report Highlights Subdued Growth in African Gambling Economy

Fact checked by Lawrence Muller

pwc A new report put out by PriceWaterhouseCooper highlights the slow growth seen in Africa’s gambling economy over the past year. Faltering economies led to a slow down in casino revenues and gross gambling revenues, according to PWC in its report entitled: “Raising the Stakes in Africa: Gambling Outlook 2014-2018”. The report mainly covers gambling markets in South Africa, Kenya and Nigeria. Overall, however, the outlook is positive for the future of gambling in Africa.

The report shows that many gambling operators with stakes in these regions believe that numbers were low because of growing competition from sports betting shops, limited payout machines and electronic bingo terminals.

This is the third annual report relating to the growing gambling industries in Africa that has been put out by PWC. South Africa has the largest gambling market out of the three regions covered – be it the land casino market or the overall gambling market. To show a comparison, while Nigeria’s land casino gambling revenues totaled R428 million, and Kenya’s totaled just R195 million, South Africa’s numbers were way ahead with revenues totaling R16.5 BILLION.

The hospitality and gambling industry leader for PWC in South Africa, Nikki Forster spoke about the country’s gambling market and said: “The South African gambling industry is a vibrant and dynamic sector, but is facing the challenges of a slow economic climate and a changing regulatory environment. In particular the casino sector is facing increasing competition from other gambling facilities.”

“We expect slower economic growth to lead to slower gross casino gambling revenues in Nigeria and Kenya and continued slow growth over the next two years,” she added. “We then look for a pick-up in growth in each country as economic conditions improve.”

Looking ahead, the report points to a number of problems which are sure to negatively impact the African gambling markets. One of them is the outbreak of Ebola, which is sure to affect numbers. Foster pointed out that slower growth is expected in the industry as a result, and Nigeria’s growth will probably slow to 5% in 2014 and slightly less the following year.

Speaking about Nigeria, Foster said: “Casino gross gambling revenues have grown at double-digit rates during the past three years, including a 19.4 percent increase in 2013.”

Foster predicts a positive outlook, saying that overall “the gambling industry is vibrant and dynamic. However, as a business the margins are low, a large portion of the costs are fixed, regulatory compliance is stringent and profitability depends on volume.

“On the whole, the outlook for the industry is positive, with the further rollout of LPMs and electronic bingo machines in the pipeline that will further contribute to the expected growth in revenues.”

Jeffrey Nel

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Fact-checked by: Lawrence Muller