ECONOMY : S. Africa Betting on Legalized Gambling to Boost Revenues

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Imagine this: You’re watching a ball bounce around a spinning roulette wheel inside a posh casino. Lights are flashing, slot machines are ringing, cocktail glasses are clinking.

But you’re not in Las Vegas or Monaco. You’re in Maputo, the capital of Mozambique--one of Africa’s poorest countries, devastated by 16 years of civil war.

You win $100--roughly equal to the nation’s per capita gross domestic product.

This scene may be fictional, but something like it could become fact in the not-too-distant future. Foreign casino operators and suppliers of gaming and lottery equipment have recently tapped Africa--the world’s poorest continent--to become an international gambling hot spot.


“Africa represents the best new lottery and gaming market in the world today,” predicts Duane Burke, chairman of the Public Gaming Research Institute, a U.S. company that organizes conferences on the gambling industry.

Later this month, hundreds of potential investors, industry professionals and government officials from the United States, France and other nations are expected to converge on South Africa, make contacts and see new products at a meeting, co-sponsored by Burke’s company, that is being billed as Africa’s biggest international conference on gambling and lotteries.

The event, the other sponsor of which is the South African Chamber of Business, will take place, appropriately, in Sun City, a Las Vegas-style resort in the former black homeland of Bophuthatswana. It’s one of the few areas in South Africa where gambling is officially sanctioned.

The targeting of Africa as a massive gambler’s paradise coincides with a recent move to start a national lottery in South Africa, the region’s fastest-growing economy. Burke and other prognosticators see the nation as a springboard for expanding into other parts of the continent.

With millions of its core constituents unemployed and lacking proper housing, President Nelson Mandela’s year-old government is under extreme pressure to redress the economic woes it inherited from decades of repressive white rule.

And as in other nations that have legalized gambling, many politicians here view legalization as a way of raising revenues while easing the load on taxpayers.


“Legalized gambling on a controlled, regulated basis is good for South Africa,” said Tony Leon, leader of the Democratic Party. “The tax benefits are enormous.”

Leon and others could soon have their way. In March, the nation’s Lottery and Gaming Board recommended that strictly controlled gambling be legalized across the country. That could occur as soon as September, when two national lottery and gambling bills are scheduled to go before Parliament.

One positive sign was last month’s Cabinet approval of a state lottery. If approved by Parliament, some analysts say, it could yield at least $200 million a year in profits, mostly to help finance the government’s national Reconstruction and Development Program.

Meanwhile, South Africa is experiencing a proliferation of illegal gambling dens and gaming operators who are taking advantage of uncertainty in gambling and lottery laws.

Under apartheid, all forms of gambling were prohibited in South Africa except in the nominally independent black homelands created to segregate blacks from whites and preserve Afrikaner sovereignty. These territories financed their keep with the help of casinos--and whites who flocked to them by the thousands.

“Sun City, Thaba Nchu, Bisho, Wild Coast, Thohoyandou--each one a Las Vegas in the bush, a fleshpot of moneyed indulgence in the midst of grinding poverty,” wrote South African journalist Allister Sparks.


Such scenes could occur all over Africa. But the conference organizers argue that South Africa and the continent as a whole would benefit from foreign investment.

“We’re now in a society of free choice,” Leon said. “You have to allow people to make their own choice.”