How can casinos boost Africa’s economy?

Even at a time when the future of the global economy is looking decidedly uncertain, there is one sector that seems to be on a constant upward trajectory. This sector is gambling, and it has shown a consistent growth rate of around 4% for the last few years. In 2018 it was valued at nearly $450 billion in terms of revenue and by 2022 it will be worth an estimated $559 billion.

Casino

Much of this money is generated from casinos with the worldwide hotspots being places like Las Vegas, Macau and Singapore. To look at the first of these as an example, Las Vegas took almost $6.6 billion in revenue in 2019 and welcomed over 42 million visitors drawn by the chance to gamble in one of the most glamorous places on Earth.

Africa’s tourist boom

So, with Africa coming to rely more and more on tourism while also seeing phenomenal growth in the sector, many are starting to question how casinos could help to boost this still further.

Of course, Africa is a huge continent with 54 separate countries, not all of which are open to gambling. But the ones that also tend to be the countries that are most attractive to tourists.

Leading the way in these is South Africa which has indisputably the number one hotspot for visitors to the country. Its combination of major cities like Cape Town and Johannesburg, incredible scenery and strong European influences create the full package for visitors, over 16 million of which head there each year.

Kenya is another country that is a big favourite with tourists, mainly drawn by the prospect of beautiful beaches as well as the chance to go on safari in any of the country’s many wildlife reserves.

In both these examples, tourists are well served with casinos, predominantly in the large population centres like Nairobi and Mombasa but also, in the case of South Africa, in purpose-built resorts like Sun City.

Other African countries that have appreciable visitor number and which also have licensed casinos include the island of Mauritius and, over in West Africa, Nigeria and Ghana. There are also some surprises including Morocco and Egypt. Despite being predominantly Muslim countries, both boast luxurious casinos that are firmly aimed at tourists, often being located in five-star hotels.

However, there are a number of countries where gambling in all forms is banned and these include Somalia and Sudan. The strict religious leadership of these means that not even a lottery is permitted, so casinos are definitely not going to be introduced as tourist attractions any time soon, but many other countries do show potential for developing them and these include Malawi, Tanzania and Uganda.

The online competition

One limiting factor that may hold back some countries from fully exploiting the potential of casinos to attract visitors has been the emergence of online casinos. Online gambling is a popular industry, with online casinos in the UK alone earning £3.2 billion in revenue between October 2018 and September 2019 compared with £1.1 billion for land-based casinos.

Online casinos have become so popular due to their convenience and accessibility, meaning many players can now access their favourite games online without actually having to find time to visit a land-based casino. The availability of casino games online is also much larger than those offered at physical venues, many sites now offer a variety of games including the favourite classics slots, poker, blackjack and roulette.

With many African countries yet to introduce specific legislation governing online casinos, it means that this is competition that also faces their “bricks and mortar” alternatives and may need to be resolved more comprehensively in the future.

But, assuming that this ceases to be an issue, the more widespread introduction of land-based casinos could have many advantages.

The South African example

Perhaps the blueprint that many other countries could follow would be South Africa where casinos represented 66% of total gambling revenue for 2016. It is worth noting, though, that this was down by 4% on the previous year’s figure, perhaps due to the increasing popularity of online gambling.

Nevertheless, it still managed to contribute nearly 17 million rand to the economy, a good proportion of which was paid in taxes and other fees to the government. At a time when the economy in general in the country has been week, this may have proved to be invaluable.

As well as providing a major draw for tourists, the casinos of South Africa also have an important role to play in creating employment opportunities in the hospitality sector. While figures gathered by the South African Government in their research into the casino industry found that around 50,000 are directly employed, another factor has to be taken into account. This is that, for every job, another 4.6 roles are created either directly or indirectly. This so-called job multiplier of 5.6 means that a total of 262,000 people are employed as a result of the industry, a significant proportion of the working-age population.

Nigeria on the rise?

As the casino industry in South Africa is mature, when looking at the potential for other countries on the continent, it may be more relevant to look at somewhere like Nigeria where the casino industry is still in its infancy. The government has a stated aim of boosting tourism and it’s believed that so-called “integrated resort casinos” could play an important role in increasing the $60 million revenue reported in 2018.

These are being developed to attract primarily the millennial market (people born between the 1980s and 2000) who look for all-encompassing experiences when they travel. This means creating resorts that might also include theme parks, shopping centres and luxury hotels as well as a casino to encourage longer stays. With many of this target group already enjoying the advances that have been made in online slots and other games in recent times, it should be quite a simple sell to get them to include trips to the casino in their travel plans.

The way ahead

If other countries also start to follow suit, then this could be the start of a whole new age of tourism in Africa and one which might gradually catch up on places like Las Vegas and Macau. No-one can deny that this will be a challenge, but with the potential to boost economies and generate more employment, it’s certainly one that it going to be well worth taking on. For some countries, it may even be essential for their continued prosperity and success.

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