Tsogo Sun Gaming (TSG) has confirmed the company is seeking to shift its focus on to online betting in the wake of the coronavirus crisis.
South Africa has not been hit as hard as many countries by the pandemic. Around 2,500 people in South Africa have lost their lives to COVID-19, but the economic impact has been vast.
Casinos are among the businesses that have struggled financially as a result of the coronavirus crisis. Lockdowns have resulted in casinos having to close their doors, affecting their profits.
TSG has reported a one per cent rise in revenues in its financial results for the 12 months ending March 31, but a greater impact on the firm’s revenues is expected to come.
Venues including 13 casinos were shut down by the company at the end of March due to the lockdown, with 23 Galaxy Bingo sites also among those that had to close their doors.
What is next for TSG?
As is the case for a lot of gambling companies, online is now the big focus for TSG. Chris du Toit, the chief executive of the business, gave an update on the state of the company’s bottom line in a recent statement to the media.
He called for casinos to be allowed to open again in order to avoid further financial issues down the line – a message heeded by the government. Du Toit said: “The business is ready, with a robust strategy of enhanced hygiene and safety measures to enable a seamless re-opening to our loyal customers.”
Along with reopening existing sites, TSG seems set to enter the online casino market, adding to the level of competition in the sector in South Africa. Du Toit added: “We are also in an advanced stage of entering the online betting industry which is a separate segment of the market.”
The appointment of a new chief financial officer (CFO), Annelize Hoyer, who is set to start work in August, is likely to be crucial to TSG’s chances of turning round the company’s situation.
“The focus during the lockdown has been primarily to eliminate variable operating costs as quickly as possible, reduce fixed costs and cancel non-essential and uncommitted capital expenditure in order to restrict the increase in net debt during the period the businesses are prevented from trading,” she added in a statement.
“There are many challenges that await me in my new role as CFO during these difficult times, but we are confident that the measures that have been, and are still to be implemented, will provide a long-term reduction in our cost base, without limiting future performance.”
Challenges down the road for TSG’s planned online operations
TSG might be one of the biggest gambling companies in South Africa, but its chances of making a success in the world of online betting are not necessarily good. South Africa has given the green light to the rollout of online sports betting in the country, but at the present time online casinos are still not permitted to operate.
This has not stopped a number of casino companies welcoming South African customers to their sites, however, with online gambling continuing to grow in popularity across the country. TSG, however, can at least focus on getting their bricks and mortar casinos back up and running. On June 17, South Africa’s president Cyril Ramaphosa confirmed that casinos would be among the businesses permitted to reopen.
Du Toit was among the leading figures from the casino industry to welcome the move. In a statement released by TSG, he said: “We’re delighted that the government has considered the comprehensive submissions we have made to the Department of Trade and Industry.”
With TSG employing around 10,000 people, the reopening of TSG casinos is set to provide a major boost for the South African economy. However, people who visit TSG sites to bet on games like roulette and blackjack will have to get used to a ‘new normal’ at casinos.
Hygiene and safety protocols will be met with some slot machines closed off in order to allow strict social distancing. Medical-grade sanitisers will be placed at both the entrances and in public areas at TSG casinos, while there will also be screening through temperature checks and questionnaires. The use of masks will be enforced while staff will go through rigorous checks.
“It will be a different experience when the casinos reopen, one that requires a new vigilance for the safety of our guests and staff. We are looking forward to providing entertainment to our loyal customers again,” said Du Toit.
