Tsogo Sun, the South African casino and hospitality giant, announced its half year periods results ending September 2018, and showed an interesting trend. The group said that alternative gaming formats such as Electronic Bingo Terminals and Limited Payout Machines were particularly good for the company’s total gaming revenue and, in some cases, their income even rivaled relative income from Tsogo Sun’s larger casinos.
According to the income report, the Vukania limited payout machines business and the Galaxy electronic bingo terminals operations generated nearly R1.2 billion in the period. The two combined made up around 21% of Tsogo Sun’s total gaming revenue in the same period.
The Earnings Before Interest, Tax, Depreciation, Amortization and Rentals for the two alternative gaming businesses were reported to be R324 million, and thus generated similar profits to Tsogo Sun’s second biggest casino, Suncoast.
The Electric Bingo Terminal and Limited Payout Machine sectors are expected to grow fast in South Africa, where players continue to seek convenience and instant fun. Since these terminals are usually located within suburban hubs, players don’t have the hassle of looking for parking or travelling far to play their favorite games – similar to the advantages of online casino sites.
Another advantage is that their payout ratios are considered to be better than those offered by traditional casinos.
Tsogo Sun has continued to invest in EBTs and LPMs in recent years. They rely on the attraction of EBTs, considered to be mini-casinos, and benefit from the advantage of lower overheads, including development costs and maintenance spend.
Tsogo Sun has just over 3,400 EBTs in its arsenal that are operated by Galaxy. The Galaxy operation also includes 200 LPM’s, 154 slot machines and two electronic gaming tables.
There are 1139 Vukani operated gaming sites spread across South Africa, with a combined total of 6033 Limited Payout Machines.
Tsogo Sun continues to seek out areas to spread its alternative gaming presence, and is currently eyeing the Northern Cape, Free State or Western Cape.