Cape Town is becoming the African Las Vegas. All these shiny casinos are attracting thousands of visitors a month.

But what exactly is the main competitor of online casinos in South Africa doing for the country’s economy?

This article tells you just that.

An overview of land-based casinos in South Africa

Land-based casinos are one of the many legal forms of gambling in South Africa. Gambling online is prohibited, and recently there’s been a precedent for hardening of punishments for illegal gambling activity.

While land-based gambling is in the same team as horserace betting and limited-payout machines are, it outcompetes them by a wide margin. According to PwC's Gambling Outlook, the gross gambling revenue in 2015 was R25 billion. A significant part of that sum is attributed to land-based casinos.

ggr in southafrica

Courtesy of PwC

As you can see, the study’s projections of the future revenues across the industry favor casinos as well. This study doesn’t take online casino revenues into account due to the fact they are hard to trace, as there is no legal base. But in the context of helping out tourism, this data is enough to understand the impact.

Gambling Commission states that land-based casinos serve as a big employer in South African’s economy. The gambling industry employs over 300,00 people indirectly, which is almost 3% of the total employment. The casino sector provides the lion’s share of jobs.

The government benefits from high taxes as well. South African authorities received almost R2 billion in tax money from the gambling industry in 2016. The number keeps on growing as the industry as a whole improves.

The effect of land-based casinos on tourism

All that progress is great. Now, how it affects the tourism industry in South Africa?

A study on effects of casinos on tourism suggests that casinos can impact the economy rather significantly. Even though the study was made for Montenegro, its results can be extrapolated on South African realities.

Casinos are fun. When there are many casinos in one place, they are even more fun. Places like Cape Town and Johannesburg are full of casinos. Not nearly as full as Las Vegas is, but still.

This number attracts many visitors who spend their vacations gambling and doing a casino equivalent of bar crawls. All the money they leave on casino floors adds up to the R2 billion in tax money that was mentioned previously.

But the fun doesn’t stop there. A modern casino is a full-scale entertainment hub. Many casinos offer a hotel for their guests. The two compliment each other. Gamblers can stay overnight, and regular guests may be under the temptation to gamble.

The idea behind many casinos is to become a place where you can stay for a whole week of your vacation and be entertained in various ways. For those who love seeing news stuff, casinos offer thematic parks. A stroll in an odd place with numerous attractions serves as a good way to relax for many tourists.

For those who wish more passive ways of relaxation, there is spa. Spa became the staple of vacation activities and in many places is becoming trivial. South African casinos keep the standards high to present the spa as a treasure, not as a throw-away attraction.

Other industries, like retail and bars, gather around casinos as there are tons of tourists there. It is hard to gather proper statistics on what proportion of internal and external tourists did the casinos bring in, but the fact remains true. If there is a casino in town, the number of tourists is bigger. This impacts the economy as a whole.

Probably it is due to being a whole range of things rather than just a casino that South African casinos bring in new people to the country. After all, the number of tourists staying overnight rose 11% percent between 2015 and 2016. Casinos caused at least a part of that increase.

What the future holds

Despite a recently proposed bill that introduces new regulations, the casino industry is facing a bright future. Financial forecasts predict that the industry’s growth is not going to stop anytime soon.

Some scholars argue that it is hard to claim whether casinos cause tourism, or tourism causes new casinos to appear. Either way, the two are connected and prosper in South Africa.