Despite the several lockdowns, Sun International was projected to earn R2.48 billion for the entire year of 2022.
Despite an improvement over the previous six months, Sun International’s revenue is still lower than it was in 2019. The same time period in 2019, Sun International’s revenue was R5.5 billion.
Sun International also disclosed a considerable increase in the number of customers trying their luck at their table and slot games. Additionally, they pointed out that their net gaming triumphs increased to R3.2 billion in the six months under review from R1.9 billion in the same time in 2020.
The Sun International income statement for the most recent six months, from January to June 2022, however, showed a loss of R59 million. This loss, however, pales in comparison to the startling R1.4 billion that was estimated during the epidemic’s height in 2020.
How did the Sun International manage to weather the storm?
According to sources, Sun International and its lenders have decided on a shorter loan term. Sun International established agreements with Stand Bank, Absa Group, and Nedbank to help them avoid any default risk. Additionally, industry watchers believe this shows banks are motivated to support the hotel sector’s growth.
As of March 31, 2022, Sun International owing R7.67 billion ($538 million). When contacted, Abas Group replied via email that they will support Sun International going forward but gave no additional details. Abas Group also provided an email response. However, Standard Bank and Nedbank opted out of commenting.
The new loan arrangement between Sun International and the lenders largely addressed the conditions of payment. However, the details of the payment arrangements made between Sun International and its financiers were kept secret. As of June 2020, the gaming and hotel groups owed R11 billion.
Initiatives by Sun International to Increase Revenue
Given the losses Sun International endured over the course of the prior year, a decrease in operational costs was required. The management of Sun International, for instance, searched for ways to improve SunBet, the company’s online betting platform. After experiencing large losses from their brick and mortar casinos, the company enhanced its SunBet online gaming platform. Additionally, according to Sun management, SunBet reportedly received more deposits.
Additionally, the insurance reimbursements were reinvested in their businesses to enhance operations. However, their insurance claim surpassed their maximum insured loss in five of their operating units. The organization filed a claim for R235 million, which will be reimbursed in August. Sun International will also get a claim for R260 million in the next months.
THE LAND-BASED CASINOS INDUSTRY IN SOUTH AFRICAN AND PANDEMIA
The most affected countries in Africa by COVID-19 included South Africa. That had a substantial effect on their hotel industry in some way. It is no longer news that the actual casinos were frequently screamed at. The National Gambling Board appreciates that the restrictions have lifted in the meantime. The third viral wave added to the problem’s unfavorability.
But allowing online gambling in South Africa will boost revenue and lessen these losses. Numerous online casinos are now active outside of SA. If the South African online gaming business is regulated, both the government and casino operators will profit more.
CAN THE SUN INTERNATIONAL RISE UP FROM ITS LOSSES?
Sun International CEO Anthony Leeming believed that the organization will rebound. Anthony said that their main casino’s principal business had also significantly improved.
As the SA government continues to catch up with immunizing the public, there is confidence that the hotel industry will return. Sun International is one of the biggest casino operators in South Africa. Additionally, there is hope that if restrictions are lifted, they will be able to carry on with business as normal. Sun International may play a key role in promoting the legalization of online casinos, which would be the icing on the cake.
REASONS FOR THE SUSPENSION OF THE CURRENT GAMBLING LAW CLAUSES IN SOUTH AFRICAN
The prior Western Gambling and Racing Policy Determination was declared unconstitutional by the Western Cape High Court. This suspension will last a year, according to the Western Cape High Court’s ruling.
Additionally, this will open the door for the introduction of a new gaming regulatory framework. The Western Cape High Court temporarily suspended the nation’s current gambling laws when Tsogo Holdings challenged the Western Cape Gambling and Racing Board’s decision to deny them a license amendment that would have allowed them to move to the Cape Metropolitan region.
To accommodate its proposed activities in the Cape metropolitan area, Tsogo Sun Holdings initially asked that the casino licenses for Mykonos and Caledon be amended.
The Western Cape Gambling and Racing Board, the ruling authority, rejected the motion. As a result, Tsogo Holdings filed a lawsuit.
WHY DIDN’T THE WESTERN CAPE GAMBLING AND RACING BOARD AGREE TO TSOGO HOLDINGS’ REQUEST?
The Western Cape Gambling and Racing Board (WCGRB), according to a representative of the governing body, rejected Tsogo Holdings’ proposal because it would amount to cannibalism in the casino industry. The regulatory body asserts that it would be incapable to evaluate such a request.
The organization in charge of overseeing casinos also believed that altering this rule would have an effect on casinos close by. For instance, GrandWest Casino, which is located in the Metropole area, would have required Tsogo Holding to amend their license. It would seem that allowing Tsogo Holdings to enter the Metropole region where they currently have a license to operate would have an effect on GrandWest Casino’s operations. Tsogo Holdings is without a doubt one of SA’s biggest casino operators.
The board went on to say that the WC Act forbade modifying the location of an existing casino operation’s license criteria in order to move it, which is why the Tsogo Holding application was rejected. In a court filing, the board stated that it would have been ideal if Tsogo Holding had applied for a new license indicating their new company location.