Gold Circle upbeat on R1.6bn betting turnover
January 13, 2006
By Neesa Moodley
Durban - Racing and gaming group Gold Circle, which is based in KwaZulu-Natal, predicts a positive year ahead after bringing in betting turnover of R1.6 billion for the year to July.
Gold Circle chief executive Michel Nairac said the growth in betting had been phenomenal and was due in part to the upswing in the economy as well as an increased inclination among the public to gamble.
Gold Circle reinvests all profits into the racing industry and has been able to increase its returns to stakeholders, including jockeys, trainers and breeders, by an average of 13.3 percent in the past three years.
With 200 betting outlets and five racecourses across KwaZulu-Natal and the Western Cape, Gold Circle sees an average of 8 000 punters daily, according to Nairac.
One of the group's largest events, the Durban July at Greyville racecourse, is hailed as a fashion extravaganza and draws crowds of more than 5 000. The group has a 44 percent market share nationally, while competitor Phumelela holds licences in the seven remaining provinces and has a market share of 56 percent.
For the year to July, Phumelela pushed revenue up 12 percent to R1.9 billion, while net profit increased 15 percent to R46 million. The two groups have entered into a joint venture called Phumelela Gold Enterprises, which has obtained exclusive broadcast rights for 29 racetracks in the UK.
The industry brings in an estimated R50 million each year from the international sale of South African racehorses alone, over and above the R400 million to R500 million local expenditure on buying and training of racehorses.
Peter Gibson, the head of the SA Equine Trade Council, said demand for local horses was growing and was being met by 416 registered horse breeders.
Nairac said there was a huge surge in international demand about four years ago, when trainer Mike de Kok took a string of racehorses to Dubai, putting South Africa on the international circuit.
"We are also seeing a growing demand from Mauritius, where an average of 100 South African racehorses are purchased each year," he said.
Although there are about 16 stud farms in KwaZulu-Natal alone, most of the breeding of racehorses takes place in the Karoo and Western Cape.
"In fact, the first stud farm in the country was in the Karoo some 300 years ago, and horse racing officially started in Port Elizabeth in 1866," said Nairac.
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