South African casino giants Sun International and Tsogo Sun are set for a courtroom battle over a proposed second casino license for Cape Town.
The proposed second license has been discussed for the past five years as the provincial government looks for ways to boost its revenue base, but Tsogo Sun is now looking to make it a reality after announcing they had commenced court action to push the concept along. Under their plan, Tsogo Sun would relocate one of their three casinos in Western Cape to South Africa’s third most populous city.
However, Sun International quickly responded to the news by launching court action of its own aimed at preventing such a move. Sun International operates Cape Town’s only current casino, GrandWest Casino in Goodwood, which rakes in R2.2 billion (US$145 million) in revenues annually.
The company also operates one casino, Golden Valley, in Western Cape.
Sun International is arguing that a second casino would dilute the market rather than generate greater revenue with a large proportion of the new property’s customer base sucked away from GrandWest.
Tsogo Sun, who recently purchased a 20 percent stake in both GrandWest and Golden Valley, disputes that claim.
“I don’t think the provincial authorities want to kill the GrandWest tax base,” Tsogo Sun CEO Marcel von Aulock said. “Tsogo firmly believes there is an untapped casino market in Cape Town.”
Von Aulock insisted the court action was aimed primarily at speeding up the government process, which has been described as “glacier slow.”
“It is still unclear what the implications are for the operator of a second casino licence in Cape Town and how many billions of rand might need to be spent, but we do expect a regulatory movement soon,” he said.
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