Tsogo Sun Blames Regulatory Delays for Stalled Casino Expansion in Western Cape

Frustration Over Administrative Gridlock

Tsogo Sun, one of South Africa’s largest casino operators, has publicly criticised provincial authorities in the Western Cape for more than a decade of inaction over a proposed new casino development. According to the company, its long-standing plans to expand into Somerset West and Strand have been effectively blocked by unresolved regulatory processes.

“The significant delay in finalising the application by the regulatory authorities and provincial government has been disappointing, given that land-based casinos invest substantially in infrastructure and create significant direct and indirect jobs,” the operator stated.

The group added that its proposed developments would have enhanced the appeal of the Helderberg and Overberg regions for tourism, while also addressing a lack of accessible, high-quality casino and hotel infrastructure in the area.

Lack of Market Access

Tsogo Sun noted that Somerset West and Strand have lacked their own casino presence since the exclusivity period for a single operator in Cape Town expired over ten years ago. However, no progress has been made to open the market or approve new projects.

“The Somerset West and Strand areas have been unserved and deprived of their own convenient, appropriate quality and secure casino and hotel development for over a decade following the expiry of the exclusivity period for a single casino in the Cape Metropole. The other casino operator having a complete monopoly of the Western Cape, currently has a market share of approximately 81 per cent of the province’s casino revenue”, the company said.

The group’s comments also referenced a pending merger in the market. “With regards to the pending application for a 3-to-2 merger by other casino operators, the Competition Commission has recommended to the Competition Tribunal not to approve the acquisition of the mega-casino strategically located adjacent to OR Tambo International Airport.”

Casino Revenues Under Pressure

The criticism came as part of Tsogo Sun’s full-year results announcement for the financial year ending 31 March 2025. The group reported income of R11.16 billion, with adjusted EBITDA of R3.47 billion.

Despite the topline numbers, the group acknowledged a difficult year for its casino segment. “In general, the casino division experienced pressure on revenue and adjusted EBITDA. The adjusted EBITDA for the Gauteng casinos (including all precinct activities), was particularly impacted with Gold Reef City experiencing a tough year. KwaZulu-Natal delivered a relatively stable performance, while the Western Cape outlying casinos were down”, it said.

Properties in Mpumalanga (Emalahleni and Mbombela), Free State (Welkom), and Eastern Cape (East London) saw a combined 27 per cent drop in adjusted EBITDA, prompting the group to re-evaluate business models for those venues.

Green Energy and Infrastructure Projects Ongoing

Despite regulatory frustrations and underperformance in some regions, Tsogo Sun has continued to invest in operational upgrades. Key casinos are advancing their green energy initiatives, with expanded solar installations completed at Montecasino, Gold Reef City, Emnotweni, The Ridge, and Blackrock in early 2025. These systems currently cover daytime power usage only.

Montecasino is also undergoing an upgrade of its main and privé floors, with plans to offer direct access to the gaming area for guests of the Palazzo Hotel.

At Emerald Resort and Casino, renovations are continuing and have affected short-term operations. The group said: “Refurbishment of the hotel, the surrounding pool and dining area, minor further upgrades to the chalets, the spa and the main casino floor will all be completed during 2025.”

Further improvements are planned for the Fun Dome entertainment area and Piazza, with new restaurant tenants expected before the end of the 2026 financial year. Only the event space and some external works will remain after that.

“With only the events space and some external upgrades remaining by the 2026 financial year end, the group is optimistic regarding the potential improved financial results of Emerald from the 2027 financial year,” Tsogo Sun said.