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Sun Retains Casino License

Posted on October 7th, 2010

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The Boardwalk of the South African city of Port Elizabeth is the subject of an investment package said to amount to 1 billion Rand for the area’s upgrading and extension. With the rehabilitation of the area, available employment opportunities is expected to reach 8,000 in the next decade or so; That is according to a spokesperson for Emfuleni Resorts. The resort will also be committed to inject more capital amounting to 30 million Rand to the Fish River Sun Hotel and Country Club of Sun International and the extension of a subsidy for that project. The Sun’s Fish River facility has been touted to bring new jobs and a new lease on life for many businesses in an area that has been economically depressed for what has been already a long time.

The partners of this venture, Emfuleni Resorts, Sun International and Zonwabise Investment Holdings finally got a new license, which they need in ordder to continue operating the casino in the Boardwalk for another 15 years. The casino was first operated by Sun International, but after its license expired, the government required that in order for the company to secure the renewal of their license, conditions for enlargement and improvement of the property must be ensured, as the area is the biggest tourist draw of the city aside from its beaches. Sun International thus enlisted more companies to be its partners for the expansion project to push through. Aside from the casino, the Boardwalk also has hotels, cinemas, shops, areas for children’s entertainment and restaurants, which since opening, has welcomed more or less 30 million visitors.

A statement by Emfuleni Resorts revealed that the sectors that will most benefit from the new development will be Eastern Cape and the national government. It explains, “By 2025 an estimated R600 million will be contributed to the government by way of taxes, levies and fees and the Boardwalk is expected to have contributed as much as a cumulative R26 billion to indirect household incomes in the area. By 2025 the cumulative contribution to gross domestic product could amount to as much as R50 billion.” The statement also gave projections about the jobs to be generated by the expansion.

A factor that definitely works for Emfuleni is that it has an effective black economic empowerment shareholding totaling to 52 percent. 35.6 percent of its shareholding is based this based in the Eastern Cape area alone. Dividends amounting to R1.6 billion will be distributd to empowerment shareholders to be spread through the 15 years that the casino license will be in effect. The Boardwalk’s commitment is that at least 55 percent of its goods and services will be acquired from local suppliers, and 65 percent of this should come from black economic empowerment suppliers both in the province and throughout the country. Moreover, Emfuleni will also give 1 percent of the net profit it will get from the casino and facility development to projects involving social investment, targeted for the benefit of the area’s black residents and an additional 3 percent to the improvement of businesses in the area, which is estimated to reach R120 million over the 15 years the casino license will run.

The general manager of Boardwalk, Clifford Ngakane was one of those excited by the development. He said, “We’re particularly excited for what this wonderful development will do, not only for Port Elizabeth, but for the wider Eastern Cape province.” He also divulged more details regarding the expansion, “Construction is due to start in January. We will now be finalising our detailed planning.” Emfuleni had to battle the 15-year license renewal with Embo Consortium who expressed its intention of taking over the license. Embo included in its bid that if it will be successful, it will apply for a temporary license for a casino in the 3rd floor conference area of the Radisson SAS Hotel while the existing casino will be renovated. It also promised to retain as many of the current staff of the Boardwalk as possible.