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ECONOMIC IMPACT OF LEGALISED GAMBLING IN SOUTH AFRICA, SINCE 1994 NATIONAL GAMBLING BOARD

ECONOMIC IMPACT OF LEGALISED GAMBLING IN SOUTH AFRICA, SINCE 1994 NATIONAL GAMBLING BOARD. OBJECTIVES. COMMUNITY ATTITUDES AND PARTICIPATION IN GAMBLING IMPACT OF GAMBLING ON H/H WELFARE LEVELS GAMBLING’S CONTRIBUTION TO SA’S ECONOMY INTERNATIONAL COMPARISONS.

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ECONOMIC IMPACT OF LEGALISED GAMBLING IN SOUTH AFRICA, SINCE 1994 NATIONAL GAMBLING BOARD

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  1. ECONOMIC IMPACT OF LEGALISED GAMBLING IN SOUTH AFRICA, SINCE 1994NATIONAL GAMBLING BOARD

  2. OBJECTIVES • COMMUNITY ATTITUDES AND PARTICIPATION IN GAMBLING • IMPACT OF GAMBLING ON H/H WELFARE LEVELS • GAMBLING’S CONTRIBUTION TO SA’S ECONOMY • INTERNATIONAL COMPARISONS

  3. METHODOLOGY:SURVEY SAMPLE • Telephone interviews : 1 000 • Personal interviews : 1 050 • Total : 2 050

  4. PERSONAL VIEWS ON GAMBLING

  5. REASONS FOR NON -PARTICIPATION

  6. PARTICIPATION IN GAMBLING BY MODE

  7. GAMBLING FREQUENCY BY MODE

  8. GAMBLING AS A LEISURE ACTIVITY FOR SOUTH AFRICANS

  9. PARTICIPATION RATES OF LESS AFFLUENT • % Share in: Lottery Casinos •  Unemployed 27,2 22,1 • <R6 000 income per annum 23,3 21,2  No formal schooling 3,5 3,0

  10. EXPENDITURE ON GAMBLING

  11. IMPACT OF GAMBLING ON HOUSEHOLD WELFARE LEVELS OBJECTIVE: • Propensity to gamble • Expenditure displacement • Impact on retail sales

  12. PROPENSITY TO GAMBLE(Def: % of h/h expenditure allocated to gambling = total spend - prizes) Propensity 2001 = 1,30 % = R6,8 billion Propensity 2002 = 1,90 % (Estimate) = R10,6 billion Growth 2001 – 2002 = 46 %

  13. PROPENSITY BY MODE: 2001 Propensity Per R100 gambled Casino 0,91 % R70 Bingo 0,002 % 15c Horse betting 0,20 % R15 Lottery 0,19 %R15 Total 1,30 %R100

  14. EXPENDITURE DISPLACEMENT CHANGES IN H/H EXPENDITURE CPI WEIGHTS: SERVICES GOODS INCREASE (1975 – 2000): • Education + 324 % • Health + 244 % • Communication + 201 % DECREASE: • Reading matter -65 % • Clothing & Footwear -63 % • Furniture -58 % • Cigarettes & tobacco -33 %

  15. EXPENDITURE DISPLACEMENT SUBSTITUTION CAN BE EFFECTED FROM: • Retail spending on goods • Expenditure on services • Other forms of gambling • Savings

  16. IMPORTANT DISPLACEMENT ITEMS • Household necessities • Dissavings • Postponement in procuring luxury items • Other entertainment

  17. IMPACT ON RETAIL OUTLETS GAMBLING EXPENDITURE IS SOURCED FROM: • Decline in savings • Increase in household income • Displacement from other items Only latter will impact on existing retailers

  18. GAMBLING SECTOR’S CONTRIBUTION TO SA’S ECONOMY TOTAL ECONOMIC IMPACT IS: Initial or direct impact + indirect impact + induced impact

  19. GDP CONTRIBUTION: 2000 • Initial impact = R3,0 billion • Indirect and induced = R6,1 billion • Total impact = R9,1 billion

  20. GDP CONTRIBUTION OF GAMBLING SECTOR: 2000 • INITIAL IMPACT = 0,38 % OF GDP • TOTAL IMPACT = 1,13 % OF GDP • PROVINCES: - High population concentrations : 0,5% - 0,75% - Rural-oriented provinces : 0,25% - 0,5%

  21. CONTRIBUTION TO CAPITAL INVESTMENT • 1997-2000 = R10,1 billion • Contribution to SA fixed investment = 2,1 % • DISTRIBUTION BY PROVINCE: • Gauteng 53,5 % • Free State 0,3 % • Western Cape 18,0 % • Limpopo <0,1 % • KwaZulu-Natal 11,4 % • Eastern Cape 5,9 % • North West 5,5 % • Mpumalanga 5,0 % • Northern Cape 0,4 %

  22. DIRECT EMPLOYMENT DISTRIBUTION BY PROVINCE, 2000 • Gauteng 40,5 % • North West 20,6 % • Western Cape 10,9 % • KwaZulu-Natal 9,8 % • Eastern Cape 8,5 % • Mpumalanga 4,2 % • Free State 2,9 % • Limpopo 1,8 % • Northern Cape 0,9 %

  23. CONTRIBUTION TO EMPLOYMENT, 2000 • Direct employment 16 103 • Indirect and induced 34 570 • Total 50 673 • REPRESENTS 1,1 % OF FORMAL SA JOBS (2000)

  24. EMPLOYMENT BY RACE (INITIAL)

  25. COMPARISONS WITH INTERNATIONAL JURISDICTIONS SA IN SADC: GROSS GAMING TURNOVER (GGT) SA contribution • Gross casino turnover 84,4 % • Lottery 88,6 % • All modes : GGT 78,5 %

  26. SA IN SADC : GROSS GAMING YIELD (GGY) SA contribution • Gross casino yield 73,9 % • Lottery 89,1 % • All modes : GGY 76,0 %

  27. RATINGS OF SOUTH AFRICA’S GAMBLING POSITION World Ranking (2000) GNI/capita 91 GGT/capita 28 GGY/capita 38 GCY/capita 17 Lottery sales/capita 46

  28. PROPENSITY TO GAMBLE SOUTH AFRICA 2001 : 1,30 % (GNI = $3 020) 2002 : +1,90 % N/A USA 0,6 % (GNI = $34 100) NEW ZEALAND 1,04 % (GNI = $12 990) AUSTRALIA 3,10 % (GNI = $20 240)

  29. GAMBLING ATTITUDES USA VS. SA

  30. CONCLUSION It is probably safe to conclude that SA portrays a relatively vibrant gambling sector making it one of the countries with the highest propensities to gamble. This becomes more problematic in view of SA’s relatively low income per capita: USA 11 x SA Australia 7 x SA New Zealand 4 x SA

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