The Winning Formula: Insights into South Africa's casino industry success
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South Africa’s casino industry can legitimately be called one of the continent’s true success stories of the past few years, with the market growing year to year and consistently showing strong revenue figures.
The relentless growth of the casino industry in the country has driven a keen interest from commentators, players, and investors alike: what is the secret of the impressive growth of South Africa’s casino industry? This is an attempt to find out what’s behind the curtain of success.
Growth of the Online Market
South Africa has long been a country that’s placed its casino emphasis on land-based establishments. Online casinos existed, but they were always the little brother, a distant second-place, barely an alternative to the average gambler.
In 2023, however, the entire landscape has changed significantly. Online casinos are responsible for driving a significant portion of market growth. Here’s why:
Lots of (Good) Options
Online casinos used to be a bit of a novelty act. Sure, the tech was impressive to a point, but it was never a real practical option and the experience was often clunky and inferior to the ‘real thing’.
But now, the average South African has access to countless new online casinos and games. Whether you’re a fan of traditional games like blackjack or roulette, reinventions of old classics, or new and fancy slots, the many options mean you’ll never be bored.
Internet Speeds
The issue that online casinos used to have was not entrenched in quality concerns. Developers have long been able to release solid titles. The problem? Players were not able to run them on slow internet speeds, at least not without a clunky and pixelated experience.
It’s also why multiplayer games didn’t take off for a long time. PlayStation and Xbox have been releasing high-quality games regularly since the 1990s, but it’s only in recent years that internet speeds have matched game requirements.
South Africa’s government and private firms have invested heavily in ensuring the country has excellent internet access in cities, with rural areas increasingly seeing improved speeds also.Cell Phone Penetration
This is perhaps one of the most important drivers of the casino industry’s growth in South Africa: cell phone penetration. In 2019, only 20% of the population had access to a smartphone. With mobile being the go-to choice for most online gamblers, it posed a major issue for the industry.
In 2023, however, that figure sits closer to 40%. It’s expected to grow even further in the coming years, with almost half of the population having access to a smartphone. It’s easy to see why online gambling suddenly jumped in recent years, with double the number of people being able to play using their smartphones.
Positive Gambling Regulations
South African officials have seen the positive effects of the casino industry on the country’s overall GDP output. Tourists, for example, increasingly see the country as a premier gambling destination.
With this in mind, the country has allowed for the opening of new casinos, both online and traditional brick-and-mortar establishments. This positive attitude towards the industry has made expansion far easier across the board.
The Challenges
Of course, the casino market is directly affected by South Africa’s overall economic outlook. At present, the predictions are bleak: it’s expected that growth will show a slowdown of 1.6% in GDP.
In 2022, that figure stood at 2.7%. The rest of Africa saw growth of 3.4%, where global GDP increased by 3.8%. South Africa, unfortunately, is lagging.
Events elsewhere, such as those in Ukraine, for example, are increasingly putting pressure on common goods such as food and energy. With the country’s debt at an all-time high, small changes can have a significant effect.
Of course, we’re still seeing movement in the right direction. The country’s economic output is growing.
Looking Towards the Future
Despite some of the challenges that the South African casino market is likely to face in the coming years, the outlook is still very positive indeed. For example, analysts still expect consistent growth year to year for casino tourism in the country, with a predicted CAGR of 5.7% spanning from 2022 all the way to 2032.
Should South Africa match this proposed figure, it would translate to a near doubling of the current market. The projected size is estimated to exceed $5130 million within the next decade, which would put South Africa right at the industry’s peak within the continent.
Whether the exact predictions are met or not, it is clear that this is a growing industry with no signs of stopping. Investment keeps ramping up, with foreign firms interested in the country’s adaptability, talent, and innovation. For South Africa, it’s full steam ahead for the casino industry.
