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Two Bidders Nearing Finish Line for Buffalo City Casino License

Posted on September 21st, 2010

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A casino license is up for grabs, and so far, the players involved in the bidding are trying to outshine each other. Millions are used to impress decision-makers, and the stakes have been raised between the two bidders, which happen to be high-profile players, out to grab the casino operating license in Buffalo City of Eastern Cape. One bidder still in the running is the proprietor of an already operating gambling facility, Hemingways Casino. The other bidder is involved with the development of converting a rundown East London property on the beachfront to real estate gold. The owners of the Hemingways Casino, Tsogo Sun Gaming, only has until September 25 of next year to operate Hemingways as its 10 year gaming license is coming to an end. This would mean that if Toso loses, Hemingways closes as well. However, if the company wins the license, it will get to keep the property that it has been running for nine years, and it will infuse an additional R400 million into Hemingways. The new license will be effective this coming November 1.

Rob Collins, the director of Tsongo Sun Gaming, said that his company is positive, “bullish and upbeat” that they will retain the license. However, Collin’s rival is also positive that he will get the license. Tsongo Sun’s rival is Ubukhosi Leisure, a company with Avril Kaschula, hotel linchpin of Eastern Cape, as its lead bidder. Ubukhosi’s company promises it will invest at least R500 million in the casino it will build on the beachfront. In the Kaschula team are other partners and key players well-known in the hotel industry such as San Nassimov, owner of Premier Hotels and the King Sandile Trust, a BEE partner, which has 42 rural villages in Eastern Cape under its representation. This bid by Ubukhosi is backed up by its plan to rejuvenate the beachfront of Buffalo City, which has been widely losing value. The company is campaigning for its bid to get the license as the last chance of the East London area to see improvement. The company currently describes the area as “dirty and unsafe, a shameful disaster” where only crime happens after 10 in the evening. Ubukhosi also argues the fact that his company’s bid is 100 percent local. This is compared to Tsogo Sun Gaming, in which 65 percent of its profits from Hemingways is wired from East London to Johannesburg, where the company is headquartered.

Collins easily points out that the license that Hemingways would lose should be given back to it because according to him, there is no sense to “cannibalize and break down a node that is working to activate a beachfront that is not working”. He also adds that the license will not only to extend the life of Hemingways, as the company also has plans to turn an area along N2 and construct a hotel, cinemas and a mall to adjoin the casino, making the whole area revitalized. Collins said that the plan, tagged at R400 million as earlier mentioned, will incude renovations to the current Hemingways Hotel, a refurbishment of the casino, and a multi-purpose recreational hall with a “World At Play” concept that would feature different lifestyle events such as exhibitions, musical shows, banquets and the like.

Meanwhile, the Ubukhosi bid has other ingredients such as additional structures in the Esplanade such as a convention center, Premier Cascades Hotel and the Kennaway Hotel, which will benefit from a R33 million face lift. Ubukhosi’s groups prides its casino plan to have a complex that will be a “one-stop shop,” with two cinemas, a sports bar, a franchised coffee shop, a seafood restaurant, a 10-pin bowling center and a food court. Undercover parking of three levels is also planned. The plan for the Kennaway Hotel building will not be pushed should the license be given to Tsongo Sun. Collins assures, though, that even if Tsongo Sun Gaming does not get the license, there will be no job cuts for the company. The firm owns 96 other hotels and seven other casinos which will absorb displaced workers should Hemingways be forced to close because of a lack of license. The Eastern Cape Gambling and Betting Board will reveal its decision within three weeks.