Sun International's Morula casino licence relocation to Menlyn gets go ahead

Posted On Wednesday, 16 September 2015 16:08 Published by
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Gaming company Sun International confirms clearing the last obstacle in its bid to relocate its struggling Morula casino licence to an entertainment centre at Menlyn in Tshwane.

Jan_van_Niekerk_RECM_CEO

Gaming company Sun International yesterday confirmed clearing the last obstacle in its bid to relocate its struggling Morula casino licence to a more vibrant entertainment centre at Menlyn in Tshwane.

This follows a trade-off with alternative gaming group Goldrush,which operates limited payout machines (LPMs) and electronic bingo terminals (EBTs) throughout SA.

According to a Sun International statement, Goldrush had withdrawn its High Court application opposing the transfer of the Morula licence to Menlyn.

Full details of the settlement were not disclosed, but Business Day understands there was a financial incentive for Goldrush to capitulate. The Sun International statement did disclose that as part of the settlement Goldrush, which is part owned by listed investment company RECM & Calibre, would apply to relocate one of its EBT licences to the Morula site. Goldrush would commence operations on the Morula site once the casino licence has been relocated to Menlyn.

A gaming industry source believed the settlement would be an enormous relief for Sun International — saying that in the past few years Morula’s revenues had been hard hit by an increase in noncasino gaming activities (mainly EBTs and LPMs) in the area. Goldrush owns seven EBT licences in Gauteng as well as 1,000 LPM sites.

In the year to end-June, Morula managed revenues of R217m, but only posted ebitda (earnings before interest, tax, depreciation and amortisation) of R33m. The ebitda margin of 15.5% is roughly half of Sun’s average casino margin.

The Gauteng licence transfer allows Sun International to develop a R3bn casino and leisure development at entertainment precinct Menlyn Maine. A Sun International spokesman said the detailed plans and costing for the development at Menlyn Maine were close to being finalised. “Sun is confident that without any further impediments to the development and construction, the target opening date of September 2017 will be achieved.”

RECM & Calibre director Jan van Niekerk said the settlement was a good deal for Goldrush. He said the Morula site was custom-built to accommodate gaming operations, and that existing clientele would still need to be serviced when Sun International moved its casino operations to the Menlyn site.

RECM & Calibre’s annual report disclosed that Goldrush saw revenue increasing by over 30% and operating profits more than doubling in its past financial year.

Source Business Day

Last modified on Wednesday, 16 September 2015 16:47

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