GOOD AND PROGRESSIVE PUBLIC POLICY YIELDS R36-BILLION MULTIPLIED CONTRIBUTION TO SA'S GDP

30 000 direct and 64 500 indirect new jobs created
More than R500-million spent annually with emerging businesses

[Johannesburg, 10 November 2003] In the past seven years, South Africa's new casino industry has been responsible for R12-billion in new investment, which means a multiplied contribution to GDP of more than R36-billion. The industry has created over 30 000 direct and 64 500 indirect new jobs, and annually pays more than R1.7-billion to government in revenue.

Addressing continental regulators and industry directors at the Pan-African 'Casinos.World Africa 2003' conference in Johannesburg this morning, Casino Association of South Africa (CASA) chief executive, Derek Auret, said today that South Africa was held in high respect internationally for the way in which it managed and controlled its gambling industry.

"Our late arrival into the world of legalised gambling allowed us to avoid the mistakes made in other jurisdictions, and to incorporate into our national gambling policy the latest thinking in terms of regulatory structures, legislation, and the key priority of safeguarding and advancing in the public interest".

Mr Auret noted that as recently as 1995, there were an estimated 150 000 illegal gambling machines in South Africa, paying no tax, employing very few people and providing a platform for associated criminal behaviour such as prostitution and drug dealing. Moreover, this vast illegal industry was almost entirely controlled by whites, offered players no protection against fraud, was readily available to minors and totally ignored problems associated with compulsive and problem gambling.

Today this situation had been replaced by a rigorously and effectively regulated legal industry with little more than 20 000 legal machines which had contributed very substantially to the public purse and which had funded considerable infrastructure in South Africa's leisure and tourism sector.

The corner stone of gambling policy in South Africa, he said, was the key decision neither to attempt to prohibit gambling, but equally, not to allow an open free market.

"It was decided that South Africa's approach should be one of restricting the supply of gambling, in an environment which was to be tightly controlled and closely regulated. This also meant that government, at the provincial level, was able to leverage the public interest by requiring bidders for casino licenses to invest heavily in non-gambling projects, such as infrastructure, which would secure benefits for society as a whole.

"This progressive approach created a vibrant new industry which has been responsible for some R12 billion in new investment, which means a multiplied contribution to South Africa's GDP of more than R36 billion in terms of accepted economic multipliers. It has created over 30 000 direct jobs and 64 500 indirect new jobs, many for first-time workers. Last year alone, the casino industry accounted for over R1.7 billion in national and provincial taxes.

"This public policy imperative has resulted in the creation of critically needed new tourism products, such as two major international convention centres and over 5 000 new hotel rooms and other non-gaming investments since 1996. It is important to remember that without the introduction of an effectively regulated legal gambling industry, virtually none of this would have occurred".

There was clear evidence, he said, that the casino sector had substantially advanced another key Government policy objective, being its transformation agenda in respect of the tourism and leisure industry. Previously disadvantaged shareholders enjoyed substantial control (just over 60% of voting shares, on average) in the casino industry, while these same shareholders had, on average, a 38% effective economic interest in South African casinos. On both counts, this exceeded comparable economic sectors.

The industry's fulfilment of its black economic empowerment obligations through recruiting, training, procurement, outsourcing and other measures was constantly monitored - as a legal requirement - by the authorities, and last year alone, business worth some R500-million, for example, was placed with emerging suppliers, contractors and service providers.

Mr Auret said that in respect of social issues and the gambling industry, South Africa was at the forefront of international policy thinking.

"It was clear from the era of the illegal industry that as gambling became more accessible to urban populations, there was real danger that a small minority would gamble excessively, causing damage to themselves and their families in the process. South Africa's approach to this issue, which ultimately resulted in the formation of a successfully-functioning public/private sector partnership to address the question of problem gambling, is today a model which is being replicated in many first-world countries, including the United Kingdom.

"This approach found expression in South Africa's National Responsible Gambling Programme (NRGP), the only one in the world entirely funded by the private sector, and the only one internationally in which treatment, research and education are integrated in a single initiative. It is also the only programme of its type in the world which is jointly controlled by a public-private partnership, the SA Responsible Gambling Trust, involving government and the industry. This model, and the fact that contributions are voluntary, yet substantial, is unique among gambling jurisdictions world-wide".

Evidence of the folly of attempting to return to prohibition, he said, was to be found in the continuing, albeit much reduced, occurrence of illegal gambling.

Just in the second quarter of this year, there were nearly 2 500 gambling machines and nine gambling tables confiscated by the authorities, and over 30 gambling convictions in South African courts. Ill-considered prohibition would only result in an explosion of illicit and underground gambling such as this.

"The single most important consequence of South Africa's gambling policy and legislation is that we have impelled the casino industry into a framework where it is obliged to be a good neighbour. As a good neighbour, we have been a steadfast partner in the advancement of Government's policy objectives, responsible corporate citizens in our expenditure on social investment, and accountable licensees in the promotion of ethical and crime-free gaming conduct", he said.