Tsogo Sun Ramps Up Efforts To Shift Casino License to Cape Town

Two casinos in South Africa, Tsogo Sun and Sun International are battling hard to secure the rights to open an additional casino near the city of Cape Town. Sun International currently holds a monopoly in the region with its successful casino GrandWest located in Goodwood, bringing in annual revenues of over R2.2 billion.

Just last week Tsogo raised the possibility of relocating the license of one of its smaller casinos to the Cape Town area. So far no official action has been taken on the proposal but Tsango said that it has filed a legal case to make the Western Cape government shift one of the licenses to the Cape Town metro area. Sun International on its part has also started legal action as a precaution in case the Western Cape government decides to rule in favor of Tsogo’s proposal.

In a statement, a leading industry expert said,

The issue is that Sun International will put up a massive fight, and legal challenges might see any development around a second casino in Cape Town take years to get off the ground. Sun International will, by that time, effectively have enjoyed 20 years of exclusivity.

The issuance of a second license in Cape Town has been under discussion for over five years. It is expected to help improve the state’s revenue. Tsogo Sun currently owns and operates three Western Cape casinos in Caledon, Mykonos and the Garden Route while Sun International operates the Golden Valley casino located in Worcester.

According industry experts, there is enough market potential in the Cape Town area to increase the number of casinos in the area, citing the example of Johannesburg which has several casinos. Sun International has warned that a second casino in the area would not increase tax revenues to the state since the new casino would only shift customers from the old casino to the new one.

The move comes even as Tsango recently took control of around 20 percent stake in Sun International’s Western Cape casino properties in GrandWest and Golden Valley. Gaming analysts in South Africa thought that this move would dampen Tsongo’s enthusiasm to shift its casino license to Cape Town.

Tsogo CEO Marcel von Aulock stated that their seeking a new license was not related to the stake purchase . He said that the new casino would be structured and located in such a manner that the existing Grand West casino would not be harmed.

Adrian Sterne

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