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Still a hidden hand in Gauteng's house of cardsLooks at the province's licence draw SHORTLY after 7pm on Wednesday the Gauteng Gambling and Betting Board put an end to the agony for some of its gambling bidders by announcing the names of four of the province's six gaming licences. But the lack of clarity on the remaining two licences means that even the successful bidders remain at sixes and sevens about how to size up the Gauteng gambling market. Ending months of anxiety for the applicants, the board awarded licences to Emfuleni Safari Resorts, Tsogo Sun, Global Resorts and Afrisun Gauteng, whose combined projects are likely to a spur about R3.2-billion in investments. Gauteng is the second province to announce successful bidders under the new Gambling Act. Last March, Mpumalanga granted three out of four licences: two to Tsogo Sun (Nelspruit and Witbank ) and one to Global Resorts (Secunda). Tsogo and Global Resorts' latest triumphs, in addition to their successes in Mpumalanga, puts them on course to become significant players in the industry.
For the moment, their attention will be focused on Gauteng, and on the impact of the gaming board's decision to allocate all six licences. It had been widely expected the province would exercise prudence and issue only four licences initially. Despite its intention to issue six, the board announced the names of four, citing lack of consensus on the remaining two. These are due to be announced before the end of this month. Confusion about the remaining licences has queered the pitch for the other four. If the last two licences are located near the existing four, it is likely the proposed investments will be scaled down. A guarded Jabu Mabuza, chief executive of Tsogo Sun, says the size of its investments in Fourways will depend on the allocation of the remaining licences. Already, Global Resorts, which planned to splash out R1-billion at its World Trade Centre development, has announced it will scale back its investment to R700-million because of the close proximity of Afrisun's proposed R870-million development in nearby Brakpan. Afrisun, the consortium including Sun International, is also expected to cut its investment. The board's decision reveals a preference for very big projects. Tsogo Sun (the joint venture between Southern Sun and black business), for example, has proposed splashing out R1-billion in Fourways and Emfuleni wants to spend R600-million on a Vaal River resort. The allocation of two licences on the East Rand was a surprise to many, including the applicants. "I was surprised. I don't see the logic in it. Even Fourways is close," says Khehla Mthembu, non-executive chairman at Sun International. To many the licence allocation is, at least for now, something of a reprieve for Sun International. No licence was granted in Midrand, which would have been uncomfortably close to SI gambling centres in North West Province, and SI has been granted a licence in Brakpan - the only one it applied for and relatively far from its prime Carousel and Sun City resorts. In the past SI persistently argued (much to its competitors' dismay) that issuing all six licences in the province would affect its existing resorts, particularly those in North West Province (Sun City, Carousel and Morula Sun). It warned that if Gauteng issued all its licences, it would be forced to close some of its operations in North West Province and retrench thousands. It is early days, though - if the board decides to issue licences in Pretoria or Midrand, there will be repercussions for other groups. Another likely site is the Johannesburg CBD, for which two applications have been received. Success or failure will be closely watched given the spectacular crashes in gambling operations in the US. Delano Caras, an independent consultant, says the four projects should do well, but their success "will depend on where the other two are located". He adds: "They are very interesting and good projects and a catalyst for job creation and spending in those areas." Although the process has received widespread support in terms of transparency, some say it went off the rail towards the end, citing the resignation of chief executive Edouard Jarcot-Guillamod as the beginning of serious disagreements. This was followed by the board's announcement of a one-month delay in announcing the winners, citing the desire to involve new Gauteng premier Mathole Motshekga in the process, and thus raising the spectre of political interference. Early in February, Mahommed Hanif Ahmed Manjoo suddenly resigned from the board without explanation. However, sources indicate his resignation followed a disagreement with the board over the allocation of a licence in Soweto. This explains the seeming lack of consensus on the other two licences. The announcement was held back following apparent disagreement about the failed bid by Richard Maponya for Soweto. It was reported that the board was in favour of the Akani Egoli group's proposals in Gold Reef City, while politicians preferred Soweto.
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