UK cellphone gambling firm makes bet on local market
October 31, 2008
By Thabiso Mochiko
Johannesburg - UK-based Probability, a provider of cellphone gambling, plans to offer its services in South Africa by March, following the promulgation of the bill a few months ago that permits online gambling in the country.
Charles Cohen, the company's chief executive, said yesterday that South Africa "is a really exciting market with one of the highest cellphone internet [penetrations] in the world, which is why we are looking at the market". South Africa has more than 34 million cellphone subscribers.
Cohen said the company had had "initial contacts with several networks", but would not provide details.
Probability has identified Sweden and Italy as other expansion targets.
These countries had similar sized cellphone markets as South Africa, as well as receptive regulatory standards, he said.
He said the company was still studying the legislation. The bill paved the way for new online or interactive gambling services, but companies would have to apply for licences to offer the services.
Probability would look for local partnerships, depending on regulations.
"We have an open mind on this," Cohen said. "It will depend a lot on the regulatory environment."
Probability would provide a similar range of games to the South African market to those it offered in the UK - all the casino classics, such as roulette, bingo and blackjack, with regular new game launches.
Probability provides its services to The Sun newspaper in the UK, and has agreements with companies such as Orange, part of France Telecom.
Probability was launched in 2004 and listed on London's alternative investment exchange in 2006. It now has more than 400 000 customers subscribed to its LadyLuck cellphone gaming service.
Cohen said the company was uniquely positioned to "take advantage of consumer fatigue with online gaming, boredom with the lottery, and the often uninspiring and overpriced traditional cellphone games on offer today".
Yesterday the company reported a maiden half-year pretax profit of £166 000 (R2.7 million). Net gaming revenue increased by 117 percent to £2.6 million.
Probability's plan to enter the local market follows those of Vienna-based Bwin Interactive Entertainment and British sports betting group Victor Chandler International, which earlier this year indicated their interest in expanding into South Africa.
The local gambling industry had gross revenue of R15.6 billion in the year to March.
The move by international companies comes as the government is considering a commission to establish if any gambling activities should be curtailed.
The government thinks controls on the industry might have been too liberal in the 12 years since gambling was legalised in South Africa.
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