One gaming company losing out on South Africa’s online gambling boom

Tsogo Sun is the largest casino, hotel and entertainment company in South Africa, with a market capitalisation of approximately R14 billion. 

It is ranked among the 80 largest companies listed on the JSE and operates 14 casino and entertainment destinations, as well as 19 hotels, throughout South Africa.

Some of its most well-known assets include Gold Reef City, Montecasino and the Palazzo Hotel.

The company released its 2025 financial year results on Wednesday, 28 May, which revealed a weak performance for the group.

Tsogo Sun’s income dropped by 3% to R11.16 billion compared to the prior year, largely due to a decline in net gaming wins. The company’s profit for the year decreased by 22.72% to R1.19 billion.

The company explained that revenue is generally under pressure in a market with limited discretionary spending and changing customer behaviour.

This pressure was reflected in the performance of its casinos, although its hotel business performed well. Notably, the group lamented the lacklustre performance of its online gambling business.

“It is disappointing that the online division failed to deliver appropriate financial results for the year in a sector that is fast-growing,” it said.

Tsogo Sun’s online business ended the year on R250 million gross gaming revenue (GGR), excluding bonusing, and an approximate adjusted EBITDA break-even position if once-off exceptional items are excluded.

The company explained that administrative issues were identified at the end of the financial year, involving cash management inefficiencies and related reconciliation processes, which resulted in write-offs of R27 million. 

“Most of the issues have since been addressed, and further development required for a seamless customer experience is underway,” it said. 

“Some management changes have taken place in recent months, with the current team’s KPIs being focused on delivering improved financial performance.”

The company announced that its online offering has been successfully expanded to include an extensive range of exciting products for playTSOGO and Bet.co.za. 

It added that further development of product offerings will be a continuous process.

Tsogo Sun plans to launch an additional complimentary brand as part of its online offering in the second half of its 2026 financial year.

South Africa’s online gambling boom

Tsogo Sun’s lacklustre online gambling performance stands in sharp contrast to other players in this space, with South Africa’s online betting space proving highly lucrative in recent years.

The National Gambling Board’s most recent National Gambling Statistics for the 2023/24 financial year revealed a gambling boom in South Africa.

South Africa’s gambling industry saw R1.1 trillion worth of wagers in the 2023/24 financial year, a 40.2% increase from the turnover generated during the previous financial year. 

Gross gambling revenue (GGR) amounted to R59.3 billion, a 25.7% increase from the previous year.

The report further revealed that most of this revenue came from betting, which generated 60.5% of industry GGR at R35.9 billion. 

The National Gambling Board said GGR growth between the different gambling modes showed unbalanced growth, with betting being the fastest-growing mode, increasing by 51.2% relative to the previous year.

Online betting is experiencing a boom in South Africa, with the gambling mode rising rapidly in popularity over the past few years.

Several companies have been able to capitalise off this boom, with Betway and Hollywoodbets being among the most popular.

Sun International, which owns the well-known Sun City Resort in South Africa, has also added an online betting platform, Sunbet, to its offerings and is reaping the rewards.

The company’s latest 2024 results showed impressive growth in this segment, as the platform’s overall income surged by 60.6% to R1.2 billion.

This resulted in a record-setting adjusted EBITDA, pre-management fees, of R363 million.

At the end of 2024, Sunbet achieved substantial growth in its key performance indicators, which included:

• Unique active players up 35.0%
• First-time depositors up 47.2%
• Deposits up 63.3%

“Our goal is to establish Sunbet as the leading and most trusted online gaming operator in southern Africa,” the company said. 

“In an industry where commoditisation is prevalent, our key differentiator is our ability to enhance our offerings through the vast resources of the group.”

Issued on Daily Investor by Bianke Neethling  | https://dailyinvestor.com/business/89685/one-gaming-company-losing-out-on-south-africas-online-gambling-boom/