South African gaming and entertainment business Tsogo Sun Gaming has reported estimated losses of ZAR400m (US$23.9 million) in revenue in the fiscal year that ended March 31, due to the coronavirus outbreak.
According to iGamingBusiness.com, the crisis has prompted the business to look beyond land-based gaming to new channels, with CEO Chris du Toit disclosing that the firm is at an “advanced stage” of moving into online sports betting.
Online gaming is a “natural progression” for the business, du Toit added.
For the recent fiscal year, revenue grew slightly 1 percent year-on-year to ZAR11.69 billion, with a 5 percent increase in the first half of the year offset by a 3 percent decline in the second half.
Gaming revenues were up 0.3 percent to ZAR9.85 billion, of which casino contributed ZAR7.3 billion, down 3 percent year-on-year. Slots accounted for ZAR5.5 billion and ZAR1.8 billion came from table games.
Tsogo Sun’s Galaxy Bingo hall chain saw revenue grow 10 percent to ZAR856 million, while revenue from limited payout machines hosted in its VSlots network was up 7 percent to ZAR1.7 billion.
Before mid-March, when the viral outbreak incapacitated gaming operations throughout the world, Tsogo Sun trading had been strong.
Tsogo Sun said Covid-19 has causes “devastation” and the loss of an estimated ZAR2 billion in revenue, with debt increasing to ZAR12 billion. This, du Toit said, meant the business needed to resume operations “as a matter of urgency” to avoid further losses. “The business is ready, with a robust strategy of enhanced hygiene and safety measures to enable a seamless reopening to our loyal customers,” he said.
The operator disclosed plans to return to profitability by reducing cost structure, with a more efficient casino business a particular focus; du Toit said it would step up efforts to leverage smartphone penetration to allow for better interactions with customers, as well as through offering its products via these devices.
“We are also in an advanced stage of entering the online betting industry which is a separate segment of the market,” he explained. “If done responsibly on licensee level, [this] can protect the substantial investment and jobs created by casinos.”
