LISTED hotel and casino operator Tsogo Sun on Tuesday announced significant expansion plans for its three Gauteng casino operations, following approval by the Gauteng Gambling Board.
Tsogo Sun CEO Marcel von Aulock said expansion and redevelopment of the group’s Silverstar casino, set to cost R480m, would start next week.
The refurbishment and expansion of the Gold Reef City casino and theme park would follow thereafter.
Tsogo Sun had committed R750m to revamp both Silverstar and Gold Reef City. The expansion of Montecasino’s casino would be undertaken later.
The group expects refurbishment of the two operations to be completed in the next two years.
In terms of the applications approved by the Gauteng Gambling Board, Tsogo Sun had also made R150m available for charitable or social infrastructural developments in Gauteng, which would be selected and administered by the gambling board.
Mr von Aulock said the group had “a track record of successful investment at Montecasino which will continue” and said that “having bedded down the Gold Reef merger, we are looking forward to enhancing the operations at Silverstar and Gold Reef City”.
Tsogo Sun had invested R1bn to expand Montecasino between 2007 and 2010, although the casino there “never kept up with the natural growth in the market”, Mr von Aulock said.
Montecasino, which opened in 2000 with one hotel and 250 rooms, now had three hotels with 650 rooms, and the restaurant and parking components had increased significantly, along with the addition of other components, including 6,000m² of offices.
“But Montecasino’s casino floor is essentially the same size as it has been since day one — it never kept up with the natural growth in the market,” Mr von Aulock said. “What we’ve done here is probably got greater capacity than we need right now, but we’ve secured capacity for continued long-term growth. The casino side of it has to keep up with the balance of the development.”
Silverstar casino would be redeveloped to create a variety of additional dining options and an outdoor events area, “allowing the complex to host live concerts and events such as the popular Boktown”, the group said.
Additional entertainment offerings would include cinemas, a ten-pin bowling alley and laser tag games as well as “an expanded and enhanced” casino floor and parking, the group said.
Mr von Aulock said the Silverstar redevelopment and expansion was “going to substantially increase the footfall to the property”, and the additional entertainment offerings and restaurants would mean the property would require a larger casino floor.
The group still had some planning to do for Gold Reef City’s expansion, which would also see the extension of the casino, as well as the introduction of cinemas and additional restaurants at the casino, Tsogo Sun said.
“In addition, the ever popular Gold Reef City Theme Park will receive additional food and beverage outlets, improved access systems and an improved linkage to the casino complex.”
Bally Chuene, chairman of the Gauteng Gambling Board, said the developments would create jobs and boost growth and investment. In addition, the operations would enhance tax revenue for the provincial and national governments.
Mr von Aulock said the gaming industry had seen growth recently. “It isn’t shoot the lights out stuff like it was in the mid-2000s, but there has been a recovery in growth over the past 18 months,” he said.
According to professional services firm PwC, South Africa’s National Gambling Act allows for 40 licensed casinos in the country, and currently 38 are licensed, meaning few opportunities for new operations.
Mr von Aulock said that while this prompted a shift in focus to the expansion and refurbishment of existing assets, “we’re quite happy with that”.
The industry was “very well designed in South Africa”, with casinos spread to service each market.
Meanwhile, last week Tsogo Sun said it would retain its commitment to Durban’s “Golden Mile” through a R220m refurbishment, consolidation and relaunch of the Southern Sun Elangeni and Southern Sun North Beach hotels into one complex — Southern Sun Elangeni and Maharani.
Source: BDLive: Nick Hedley