Gross gambling and casino revenue has been found to be subdued in African markets due to a faltering economy. These results come from PwC's "Raising the Stakes in Africa: Gambling Outlook 2014-2018 (South Africa – Nigeria – Kenya)", its third annual edition on the gambling industry in Africa.
With South African historical data provided by the National Gambling Board of South Africa, the report focused on South Africa as its biggest market. However, analyses of the markets in Nigeria and Kenya were also found to be significant in terms of 2013 gambling revenue in Africa.
Gambling Revenue Across Africa
Comparing gambling revenue of South Africa, Nigeria and Kenya, South Africa's market was significantly the largest with R16.5 billion. This was followed by Nigeria with R428 million and then Kenya with R195 million.
Nikki Forster, PwC Hospitality and Gambling Industry Leader for South Africa indicated that while the gambling industry in South Africa was both dynamic and vibrant it is facing competition from other gambling facilities, such as electronic bingo terminals and limited payout machines (LPMs). In addition, a slow economic climate and changing regulations have affected growth in the industry.
"We expect slower economic growth to lead to slower gross casino gambling revenues in Nigeria and Kenya and continued slow growth over the next two years," stated Forster. "We then look for a pick-up in growth in each country as economic conditions improve."
Casino Gambling in Nigeria and Kenya
Casino gambling revenues over the past three years have been growing significantly in Nigeria. In 2013, the country experienced a 19.4% increase in gross casino gambling revenue. This growth is expected to slow considerably in 2014 with only a 5% increase and again in 2015 with a 4.5% increase. This can be attributed to the harmful impact on tourism of the Ebola outbreak in the country and a slowing of the economic growth rate. There are currently three casinos licensed in Nigeria.
Kenya allows almost all forms of gambling, including Internet and mobile gambling. Gross gambling revenue increased 7.6% in 2013 which was an improvement over the figure of 5.6% recorded in 2012. These increases were notably lower than the figures for 2009-11 which were double digits. In 2014, casino gambling revenue is expected to slump to 4.9% and then to 4.1% in 2015. This will follow the slowing of the economic growth rate and the enforcement of a withholding tax on gambling winnings.
Despite drops in revenue in 2014-15, "on the whole, the outlook for the industry is positive," Forster concluded.