ECONOMIC IMPACT OF ECONOMIC IMPACT OF LEGALISED GAMBLING IN LEGALISED GAMBLING IN SOUTH AFRICA, SINCE 1994SOUTH AFRICA, SINCE 1994

NATIONAL GAMBLING NATIONAL GAMBLING BOARDBOARD

OBJECTIVESOBJECTIVES

COMMUNITY ATTITUDES AND PARTICIPATION IN GAMBLING

IMPACT OF GAMBLING ON H/H WELFARE LEVELS

GAMBLING’S CONTRIBUTION TO SA’S ECONOMY

INTERNATIONAL COMPARISONS

METHODOLOGY:METHODOLOGY:SURVEY SAMPLESURVEY SAMPLE

Telephone interviews : 1 000

Personal interviews : 1 050

Total : 2 050

PERSONAL VIEWS ON GAMBLINGPERSONAL VIEWS ON GAMBLING

Not acceptable to me but have

no objections to gambling by

others14.8%

Acceptable to me

73.0%

Not acceptable to me12.2%

REASONS FOR REASONS FOR NON -PARTICIPATIONNON -PARTICIPATION

Percentage

14.8

0.8

21.9

29.7

32.8

0 10 20 30 40

Other

No access to gamblingfacilities

Against religiousbeliefs

Lack of money

Don't gamble at all

PARTICIPATION IN GAMBLING PARTICIPATION IN GAMBLING BY MODEBY MODE

Percentage

27.5

2.4

0.6

7.2

2.3

15.3

19.3

71.3

0 20 40 60 80

None of the above

Other

Internet/On-line gambling

Bingo

Sports

Horse betting

Casino gambling

National lottery

GAMBLING FREQUENCY BY GAMBLING FREQUENCY BY MODEMODE

0.80

11.18.5

24.5

21.5

0

60.5

0 0

3.3 4

20.8

6.39.2

64.1

5.4

53.4

0

10

20

30

40

50

60

70

Daily Weekly Twice weekly Fortnightly Monthly Less often

Casinos Lottery Horseracing

GAMBLING AS A LEISURE GAMBLING AS A LEISURE ACTIVITY FOR SOUTH AFRICANSACTIVITY FOR SOUTH AFRICANS

52.2

44.6

24.0

33.0

23.8 22.4

0

10

20

30

40

50

60

Yes Can't say Disagree

Casinos Horseracing

PARTICIPATION RATES OF PARTICIPATION RATES OF LESS AFFLUENTLESS AFFLUENT

% Share in: Lottery Casinos

Unemployed 27,2 22,1

<R6 000 income per

annum 23,3 21,2

No formal schooling 3,5 3,0

EXPENDITURE ON GAMBLINGEXPENDITURE ON GAMBLING

57.1

30.5

9.1

2.1 0.9 0.3 0.1

0

10

20

30

40

50

60

Less thanR50

R51-R150 R151-R300 R301-R500 R501-R1000

R1001-R2000

More thanR2000%

IMPACT OF GAMBLING ON IMPACT OF GAMBLING ON HOUSEHOLD WELFARE LEVELSHOUSEHOLD WELFARE LEVELS

OBJECTIVE:

Propensity to gamble

Expenditure displacement

Impact on retail sales

PROPENSITY TO GAMBLEPROPENSITY TO GAMBLE(Def: % of h/h expenditure allocated to gambling = (Def: % of h/h expenditure allocated to gambling =

total spend - prizes)total spend - prizes)

Propensity 2001 = 1,30 %

= R6,8 billion

Propensity 2002 = 1,90 % (Estimate)

= R10,6 billion

Growth 2001 – 2002 = 46 %

PROPENSITY BY MODE: 2001

Propensity Per R100 gambled

Casino 0,91 % R70

Bingo 0,002 % 15c

Horse betting 0,20 % R15

Lottery 0,19 % R15

Total 1,30 % R100

INCREASE (1975 – 2000):• Education + 324 %• Health + 244 %• Communication + 201 %

EXPENDITURE DISPLACEMENTCHANGES IN H/H EXPENDITURE

CPI WEIGHTS: SERVICES GOODS

DECREASE:• Reading matter -65

%• Clothing & Footwear -63 %• Furniture -58

%• Cigarettes & tobacco -33 %

• Retail spending on goods• Expenditure on services• Other forms of gambling• Savings

EXPENDITURE DISPLACEMENT

SUBSTITUTION CAN BE EFFECTED FROM:

Household necessities Dissavings Postponement in procuring luxury items Other entertainment

IMPORTANT DISPLACEMENT ITEMS

Decline in savings Increase in household income Displacement from other items

Only latter will impact on existing retailers

IMPACT ON RETAIL OUTLETS

GAMBLING EXPENDITURE IS SOURCED FROM:

Initial or direct impact

+indirect impact

+induced impact

GAMBLING SECTOR’S CONTRIBUTION TO SA’S

ECONOMYTOTAL ECONOMIC IMPACT IS:

Initial impact = R3,0 billion Indirect and induced = R6,1 billion

Total impact = R9,1 billion

GDP CONTRIBUTION: 2000

INITIAL IMPACT = 0,38 % OF GDP TOTAL IMPACT = 1,13 % OF GDP

PROVINCES: - High population concentrations : 0,5% - 0,75% - Rural-oriented provinces : 0,25% - 0,5%

GDP CONTRIBUTION OF GAMBLING SECTOR: 2000

DISTRIBUTION BY PROVINCE:• Gauteng 53,5 % • Free State 0,3 %

• Western Cape 18,0 % • Limpopo <0,1 %

• KwaZulu-Natal 11,4 %

• Eastern Cape 5,9 %

• North West 5,5 %

• Mpumalanga 5,0 %

• Northern Cape 0,4 %

CONTRIBUTION TO CAPITAL INVESTMENT

• 1997-2000 = R10,1 billion

• Contribution to SA fixed investment = 2,1 %

• Gauteng 40,5 %

• North West 20,6 %

• Western Cape 10,9 %

• KwaZulu-Natal 9,8 %

• Eastern Cape 8,5 %

• Mpumalanga 4,2 %

• Free State 2,9 %

• Limpopo 1,8 %

• Northern Cape 0,9 %

DIRECT EMPLOYMENT DISTRIBUTION BY PROVINCE, 2000

CONTRIBUTION TO EMPLOYMENT, 2000

Direct employment 16 103 Indirect and induced 34 570 Total 50 673

REPRESENTS 1,1 % OF FORMAL SA JOBS (2000)

EMPLOYMENT BY RACE (INITIAL)

63.8

23.7

9.5

3

0

10

20

30

40

50

60

70

Africans Whites Coloureds Asians

%

COMPARISONS WITH INTERNATIONAL JURISDICTIONS

SA IN SADC: GROSS GAMING TURNOVER (GGT)

SA contribution

Gross casino turnover 84,4 %

Lottery 88,6 %

All modes : GGT 78,5 %

SA IN SADC : GROSS GAMING YIELD (GGY)

SA contribution

Gross casino yield 73,9 %

Lottery 89,1 %

All modes : GGY 76,0 %

RATINGS OF SOUTH AFRICA’S GAMBLING POSITION

World Ranking (2000)

GNI/capita 91

GGT/capita 28

GGY/capita 38

GCY/capita 17

Lottery sales/capita 46

PROPENSITY TO GAMBLE

SOUTH AFRICA 2001 : 1,30 % (GNI = $3 020)

2002 : +1,90 % N/A

USA 0,6 % (GNI = $34 100)

NEW ZEALAND 1,04 % (GNI = $12 990)

AUSTRALIA 3,10 % (GNI = $20 240)

GAMBLING ATTITUDES GAMBLING ATTITUDES USA VS. SAUSA VS. SA

73.0

51.0

14.8

28.0

12.216.0

0.05.0

0

10

20

30

40

50

60

70

80

Acceptable Ok for others Unaccepatable Refused

SA USA

CONCLUSION

It is probably safe to conclude that SA portrays a relatively vibrant gambling sector making it one of the

countries with the highest propensities to gamble.

This becomes more problematic in view of SA’s relatively low income per capita:

USA 11 x SA

Australia 7 x SA

New Zealand 4 x SA