Market focus: South Africa

THE South African government in 2008 passed amendments to the National Gambling Act to implement a licensing and regulatory regime for online gambling, and plans in 2010 to issue 10 interactive gambling licences to local casino operators.

Much hope has been placed on this year’s World Cup providing the catalyst for the development of the sector, with bookmakers including Victor Chandler and Ladbrokes hoping to capitalise on recent investments there.

However, H2 believes the effective target market is currently not much more than 10% of the total population when wealth and broadband/credit card penetration are taken into account.

x Onshore South African betting generated a gross win of ZAR1.6bn (£135m) in the year to 31 March 2009, from a turnover of ZAR9.5bn.

x Horseracing accounts for approx 70% of onshore internet betting, football for the majority of the rest, with high-value accumulators popular among the less-well-off.

x In 2009, a total gross win of approximately ZAR320m (£29.6m) was generated online (onshore and offshore) but this amount could be doubled this year with more companies moving onshore and the World Cup taking place.

x 3% of homes in South Africa have broadband connections and 5% of mobile phones provide EDGE/3G Internet access. Higher mobile than online penetration coupled with the development of handsets/software means they could be important in the development of the sector in South Africa.