South Africa’s Gold Circle Racing and Gaming Group is a non-profit organization that operates horse racing, wagering and gaming facilities, related leisure activities and media management. Its subsidiary, Gold Circle KZN Slots was informed in May 2005 that it had been granted a Route Operator’s licence by the KwaZulu-Natal Gambling Board, and last month that licence was formally issued. The capital investment in the project was around R8 million (US$1.16 million) and each limited payout machine is expected to gross R6,000 (US$872) per month.

The Route licence allows 1,000 slot machines but the company anticipates starting with between 300 and 400, rising to 1,000 within three to five years. This would mean an estimated minimum R21.6 million (US$3.14 million) in gross gaming revenue for Gold Circle KZN Slots in its first year of operation. This year to July, Gold Circle had a record R1.8 billion (US$261.8 million) turnover, up 10.6% on 2005 figures that had been up 11% on 2004. Just four years ago the company posted a loss, but the booming South African economy has meant that the horseracing industry is thriving again.

The yearling sales, including one at Sibaya Casino that raised R12 million (US$1.7 million), have shown that owning and racing horses is once again a popular activity. Last year owners paid an estimated R500 million (US$72.7 million) on training and feeding their horses whilst collective prize money is only about half that. As a non-profit organization, Gold Circle reinvests in the racing industry so that jockeys, trainers and owners can benefit. In 2005 stakes paid to owners rose by R17 million (US$) and there has been a further 13% increase in returns to stakeholders this year. Gold Circle is expected to post a profit of R8 million (US$1.16 million).
(E-08.04.06)

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