Casino industry hopes to reopen within the next month

South Africa’s multi-billion-rand casino industry, which directly employs more than 20 000 people, is pushing for the sector to be allowed to reopen within the next month as government considers easing Covid-19 restrictions in Level 3.

After the government’s decision to allow religious gatherings of 50 people or less in Level 3, several business sectors are now lobbying to also be allowed to operate, even at reduced capacity to be in line with Covid-19 social distancing and health protocols.

Casinos, theme parks, sit-down restaurants, cinemas, theatres, eventing venues, salons and spas as well as clubs and bars are currently not allowed to operate under Level 3 restrictions. Interprovincial domestic tourism and air travel are also banned, barring exemptions for limited business travel and certain other cases, such as funerals.

Landmark casino properties across the country, such as Montecasino (Joburg), Sun City (North West), Suncoast (Durban) and Grand West (Cape Town) are still ghost towns, having been closed since late March due to the lockdowns.

With no income, but still having to pay expenses such as salaries, municipal rates and security, JSE-listed Tsogo Sun Gaming and Sun International are facing spiralling debt. The Covid-19 economic fallout has also seen Tsogo Sun Gaming being forced to write-down the value of its gaming properties by R2 billion.

The two biggest gaming groups in the country now also face the prospect of retrenching staff, especially if the ban on trade continues.

Sun International has already taken a decision to permanently close its Carousel Casino in the North West and Naledi Casino in the Free State.

Both groups have been part of the Tourism Business Council of South Africa’s (TBCSA) lobbying for various sectors of the broader tourism industry to be reopened in Level 3. Senior sources in the gaming industry now tell Moneyweb that casinos are likely to reopen within the next month, but government is yet to confirm this.

The CEOs of Tsogo Sun Gaming, Sun International and the TBCSA were reluctant to comment on the expected reopening date of the industry, but all reiterated calls for the sector to be allowed to operate in Level 3 under reduced capacity due strict Covid-19 health and safety protocols.

Speaking to Moneyweb on Wednesday following the release of Tsogo Sun Gaming’s annual results for the year to the end of March, group CEO Chris du Toit said the industry needs to be allowed reopen as soon as possible.

Chris du Toit, CEO of Tsogo Sun Gaming. Image: Supplied

“We have already been closed for more than two and a half months, which has had a detrimental impact on our business,” he said. “It is of critical importance that we can start trading again, even at a reduced capacity.”

Du Toit added that the industry has presented government with comprehensive Covid-19 plans, which include strict health protocols, as part of its lobbying to reopen casinos sooner.

“For instance, we have proposed switching off every alternate slot machine on casino floors to apply social distancing. Besides hand sanitisers and temperature checks of patrons, the access control and high-tech surveillance systems within casinos give us an added advantage around tracking and tracing. We are well-prepared.”

“Every day that we are not allowed to trade will have a greater impact on our business, including higher debt levels and the need to restructure our cost base,” said Du Toit, adding that Tsogo Sun directly employs around 10 000 people across the country and supports many more thousands of jobs.

“Taking into consideration the strict measures we will have in place, there is no reason why we shouldn’t be allowed to operate in a responsible manner from the 1^st of July.”

Sun International CEO Anthony Leeming told Moneyweb that following the industry’s extensive lobbying, there “are indications that they [government] want the sector to open in July”. He said keeping the sector closed until September or later will be much more disastrous.

“Right now, we are managing to pay our staff about 40% of their salaries. There is an outflow of cash, but we are not making any money to cover our overheads. This can’t continue for much longer.:

He added: “We can reopen within a couple of days  once the ban is lifted. However, we will have to await the regulations first, to know how we will be allowed to operate. Preparations are already underway, and we will have the precautions in place … I believe our industry will have stronger health protocols in place than the retail sector.”

Leeming said that besides Sun International’s casinos, its standalone hotels like the Table Bay in Cape Town and The Maslow in Sandton remain closed and that current local business travel is insufficient for these hotels to reopen. The reopening of domestic interprovincial travel, and ultimately international travel, will be needed to sustain such operations.

TBCSA CEO Tshifhiwa Tshivhengwa told Moneyweb that as part of its meeting with President Cyril Ramaphosa in May, the council also presented the case for casinos and sit-down restaurants to be allowed to operate, in addition to allowing for domestic leisure travel and small events of less than 50 people to take place.

“We are still awaiting a formal response from government on our proposals. However, considering religious gatherings of 50 people [are] now allowed, we see no reason why we can’t have restaurants operate or small business events being held under similar restrictions,” he said.

“The government’s Covid-19 advisory panel of health experts are set to give an update to President Ramaphosa early next week, so we hope to hear something thereafter. We really hope that more tourism and hospitality businesses are allowed to operate sooner. If the Level 3 restrictions continue as it is currently, then many of thousands of tourism industry jobs are at stake.”

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