Betting on Newlands 
2010-07-28 18:16:02
Submit your commentWhere should Cape Town's second casino be?
Pollsmoor, the Good Hope Centre, the World Cup stadium, Newlands rugby ground, Kenilworth racecourse, the CTICC and District Six were all thrown at me as good locations during a radio talk show on the subject. Somerset West, Ratanga Junction, Atlantis and Northgate Island also had their champions, and three different callers were equally certain they "had it on good authority" that it would be at Simon's Town, Sol Kerzner's One&Only Waterfront hotel, and that perennial candidate for urban renewal, Culembourg.
Finance MEC Alan Winde started this particular roulette wheel spinning with his proposal that one of the province's four casinos outside Cape Town should be able to apply for a shift into the metropole to compete with GrandWest. It won't be Worcester because that is operated by GrandWest's Sun International, so either Langebaan (Mykonos), Caledon or Mossel Bay - all owned by the newly merged R21 billion Tsogo Sun/Gold Reef company - would close and shift into the big smoke.
There's a long and legal road to travel before this becomes reality but I reckon it will happen. GrandWest will defend their turf vigorously but they're victims of their own success - the Goodwood operation is acknowledged as the country's most profitable casino and the third-biggest in terms of visitor numbers - over three million a year (just behind Durban's SunCoast and Joburg's MonteCasino).
It's hard for a balance-sheet illiterate like me to discover exactly how much money Sun International and their local empowerment partners make from GrandWest but in 2009 it made an Ebitda (profit before tax and other things are deducted) of R675m on revenues of R1.6bn. And those were recession numbers; the year before, they coined even more.
These staggering figures are six times any of the rural venues and show that there's room for another player in the city.
GrandWest will argue they've invested more than R2bn during their 10-year licence and employed over 2 000 people. They've also had a huge commercial spin-off in a previously under-developed area, created a very popular broader entertainment venue and put in some impressive social and charitable programmes. All true, but they have still made a bundle on what amounts to a monopoly.
GrandWest management probably know deep down they won't be able to hold off competition in the metropole but they will fight tooth and nail on its location. They will squeal like stuck pigs if it goes to the Waterfront or anywhere in the CBD. That's where they wanted to be in the first place but the provincial government under premier Ebrahim Rasool insisted outlying areas benefit. While, as readers of Noseweek magazine will know, there are many unanswered questions about the finances and shareholding in that GrandWest arrangement, the decentralising notion was a good one and should be maintained.
Sol might want a casino to revive his ill-timed One&Only but the Waterfront doesn't need another layer of icing on an already very sweet cake. It would also represent unfair competition to GrandWest who would then feel stuck out in the sticks compared to their rival.
For now, I'm not even bothering to enter into the "should we have it" debate because I think that train has already left the station.
Personally I find casinos and the gambling process in general to be tawdry and depressing and light years away from the 007 Monte Carlo glamour image the industry attempts to convey.
"The first millionaire" is always publicised but the "first million to be impoverished" landmark is not so widely marketed.
However, gambling exists and is better regulated in a way that offers some protection to the addicted mug punters and provides properly regulated employment while delivering huge tax income.
Winde would be an irresponsible finance MEC if he ignored all those extra hundreds of millions of rands in revenue that would be generated at the stroke of a regulatory pen.
So back to the original question, where should it be? The vast underutilised tract of Kenilworth race course is tempting, given that they already gamble there in abundance but, if we get very creative here, there is another, more elegant solution. The casino cannot be at the new stadium because its founding regulations forbid it, plus all the anti-CBD arguments advanced above, but it desperately needs WP/Stormers/Springbok rugby as a tenant to make it viable.
The old grumps at Newlands are stubbornly refusing to move but maybe if their venerable site could make billions as a casino, they would shift north. We would be killing two birds (and one white elephant) with a single stone.
Pollsmoor, the Good Hope Centre, the World Cup stadium, Newlands rugby ground, Kenilworth racecourse, the CTICC and District Six were all thrown at me as good locations during a radio talk show on the subject. Somerset West, Ratanga Junction, Atlantis and Northgate Island also had their champions, and three different callers were equally certain they "had it on good authority" that it would be at Simon's Town, Sol Kerzner's One&Only Waterfront hotel, and that perennial candidate for urban renewal, Culembourg.
Finance MEC Alan Winde started this particular roulette wheel spinning with his proposal that one of the province's four casinos outside Cape Town should be able to apply for a shift into the metropole to compete with GrandWest. It won't be Worcester because that is operated by GrandWest's Sun International, so either Langebaan (Mykonos), Caledon or Mossel Bay - all owned by the newly merged R21 billion Tsogo Sun/Gold Reef company - would close and shift into the big smoke.
There's a long and legal road to travel before this becomes reality but I reckon it will happen. GrandWest will defend their turf vigorously but they're victims of their own success - the Goodwood operation is acknowledged as the country's most profitable casino and the third-biggest in terms of visitor numbers - over three million a year (just behind Durban's SunCoast and Joburg's MonteCasino).
It's hard for a balance-sheet illiterate like me to discover exactly how much money Sun International and their local empowerment partners make from GrandWest but in 2009 it made an Ebitda (profit before tax and other things are deducted) of R675m on revenues of R1.6bn. And those were recession numbers; the year before, they coined even more.
These staggering figures are six times any of the rural venues and show that there's room for another player in the city.
GrandWest will argue they've invested more than R2bn during their 10-year licence and employed over 2 000 people. They've also had a huge commercial spin-off in a previously under-developed area, created a very popular broader entertainment venue and put in some impressive social and charitable programmes. All true, but they have still made a bundle on what amounts to a monopoly.
GrandWest management probably know deep down they won't be able to hold off competition in the metropole but they will fight tooth and nail on its location. They will squeal like stuck pigs if it goes to the Waterfront or anywhere in the CBD. That's where they wanted to be in the first place but the provincial government under premier Ebrahim Rasool insisted outlying areas benefit. While, as readers of Noseweek magazine will know, there are many unanswered questions about the finances and shareholding in that GrandWest arrangement, the decentralising notion was a good one and should be maintained.
Sol might want a casino to revive his ill-timed One&Only but the Waterfront doesn't need another layer of icing on an already very sweet cake. It would also represent unfair competition to GrandWest who would then feel stuck out in the sticks compared to their rival.
For now, I'm not even bothering to enter into the "should we have it" debate because I think that train has already left the station.
Personally I find casinos and the gambling process in general to be tawdry and depressing and light years away from the 007 Monte Carlo glamour image the industry attempts to convey.
"The first millionaire" is always publicised but the "first million to be impoverished" landmark is not so widely marketed.
However, gambling exists and is better regulated in a way that offers some protection to the addicted mug punters and provides properly regulated employment while delivering huge tax income.
Winde would be an irresponsible finance MEC if he ignored all those extra hundreds of millions of rands in revenue that would be generated at the stroke of a regulatory pen.
So back to the original question, where should it be? The vast underutilised tract of Kenilworth race course is tempting, given that they already gamble there in abundance but, if we get very creative here, there is another, more elegant solution. The casino cannot be at the new stadium because its founding regulations forbid it, plus all the anti-CBD arguments advanced above, but it desperately needs WP/Stormers/Springbok rugby as a tenant to make it viable.
The old grumps at Newlands are stubbornly refusing to move but maybe if their venerable site could make billions as a casino, they would shift north. We would be killing two birds (and one white elephant) with a single stone.
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