How Managed the Sun International to Stay Afloat During the Storm?
Additionally, Sun International revealed that the number of people trying their luck at their table and slot games climbed significantly. Additionally, they noted that compared to 2020, when they produced R1.9 billion in the same period, their net gaming victories jumped to R3.2 billion in the six months under review.
However, a loss of R59 million was reported on the Sun International income statement for the most recent six months, from January to June 2022. However, this is a significantly smaller loss than the staggering R1.4 billion that was reported during the peak of the epidemic in 2020.
How Managed the Sun International to Stay Afloat During the Storm?
Sources claim that Sun International and its lenders have agreed to a shorter loan period. To assist them avoid any default risk, Sun International reached agreements with Stand Bank, Absa Group, and Nedbank. Additionally, observers of the business think that this indicates that banks are interested in helping the hotel industry succeed.
The debt owed by Sun International was R7.67 billion ($538 million) as of March 31, 2022. When approached, Abas Group responded via email that they will continue to assist Sun International but provided no other information. Furthermore, Abas Group responded by email. Standard Bank and Nedbank, however, chose not to comment.
The terms of payment were mostly addressed under Sun International’s new agreement with lenders. The terms and circumstances that Sun International and its lenders agreed upon regarding payments, however, were kept confidential. The gambling and hotel groups owed R11 billion as of June 2020.
Sun International’s Initiatives to Raise Income
A reduction in operating expenses was necessary in light of the losses Sun International experienced throughout the previous year. For instance, Sun International’s management looked for methods to enhance SunBet, its online gambling platform. The firm improved its SunBet online gambling platform after suffering significant losses from their brick and mortar casinos. Additionally, SunBet reportedly registered greater deposits, according to Sun management.
The insurance payouts were also put back into their companies to improve operations. However, in five of their operating units, their insurance claim exceeded their maximum insured loss. A R235 million claim was made by the group, and it will be paid in August. In the upcoming months, Sun International will also get a claim for R260 million.
THE LAND-BASED CASINOS INDUSTRY IN PANDEMIA AND SOUTH AFRICAN
South Africa was among the nations in Africa that COVID-19 had the most impact on. That in some way significantly impacted their hotel business. The fact that the physical casinos were repeatedly yelled at is no longer news. The National Gambling Board is glad that the limits have been loosened in the meanwhile. Additionally, the third viral wave made the situation worse.
However, allowing internet casinos in SA will significantly increase income and help to reduce these losses. Thousands of internet casinos are currently operating from outside in SA. The government and casino operators will make more money if the internet gaming market in SA is regulated.
IS THE SUN INTERNATIONAL CAPABLE OF REBUILDING FROM ITS LOSSES?
Anthony Leeming, the CEO of Sun International, predicted that the group will recover. Anthony said that their primary casino business has also considerably improved.
Finally, there is optimism that the hotel sector will recover as the SA government continues to catch up with immunizing the populace. One of the largest casino operators in SA is Sun International. Furthermore, there is anticipation that once limitations are loosened, they will be able to resume their business as usual. Sun International may also advocate for the legalization of internet casinos as a significant player, which would be the cherry on top.
REASONS WHY THE CURRENT GAMBLING LAW CLAUSES IN SOUTH AFRICA HAVE BEEN SUSPENDED
In a decision, the Western Cape High Court invalidated the previous Western Gambling and Racing Policy Determination. The Western Cape High Court’s decision states that this suspension will last for a year.
Additionally, this will provide way for the implementation of a new regulatory framework for gaming. Tsogo Holdings challenged the Western Cape Gambling and Racing Board’s rejection to change their license to facilitate their migration to the Cape Metropolitan region, which was the primary reason the Western Cape High Court halted the country’s present gambling regulations.
Tsogo Sun Holdings first requested that the casino licenses for Mykonos and Caledon be changed to fit their intended operations in the Cape metropolitan region.
The motion was denied by the governing body, the Western Cape Gambling and Racing Board. Tsogo Holdings went to court as a result.
WHY DID THE WESTERN CAPE GAMBLING AND RACING BOARD DENY THE REQUEST FOR TSOGO HOLDINGS?
According to a representative for the regulatory authority, the Western Cape Gambling and Racing Board (WCGRB) denied Tsogo Holdings’ proposal because it would amount to cannibalism in the casino sector. The regulatory agency also claims that evaluating such an application would be incompetent.
The casino regulating body also thought that changing this regulation might have an impact on nearby casinos. For instance, Tsogo Holding intended to change their license to accommodate GrandWest Casino, which is situated in the Metropole region. It would appear that GrandWest Casino’s operations would be impacted by enabling Tsogo Holdings to enter the Metropole region where they currently have a license to operate. There is no denying that Tsogo Holdings is one of SA’s largest casino operators.
The board further stated that the Tsogo Holding application was denied because the WC Act does not permit changing the site of an existing casino operation’s licensing requirements in order to relocate it. The board said in a court filing that it would have been preferable if Tsogo Holding had filed for a new license specifying the new location of their business.
The Western Cape Gambling and Racing Board will contest the ruling, right?
After the court’s verdict, Premier Winde, who was also a party to the lawsuit, told the press that the board had no plans to appeal the court’s ruling. Premier Winde was also included as a respondent in the Tsogo Sun Holdings lawsuit.
A new gaming bill has been issued, thus Winde said that the court’s ruling would also be taken into account. The public hearing phase of the new gaming law Winde was alluding to has already begun. It is expected that gaming industry stakeholders will submit their thoughts for consideration.
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