The limited payout machine market in South Africa has been hitting the headlines recently – for all the right reasons.
SOUTH Africa’s limited payout machine market has been receiving a great deal of attention in recent years. With the country’s casino market experiencing little growth, opportunities in the street market are proving attractive, particularly as it continues to post impressive numbers.
The LPM market, which opened with the establishment of the first location in Mpumalanga in 2003, comprises route operators and site operators, the former licensed to own, manage and operate LPMs in conjunction with the latter. These include Vukani Gaming, Grand Parade Investments and Goldrush Gaming. The machines tend to be located in sports clubs, bars, pubs and restaurants and the regulations envisaged the eventual roll-out of 50,000 machines. The first games to be introduced were dominated by steppers and low-line video games; however, this has increasingly shifted towards multi-line games with bonus features.
What is driving interest in this particular market, both within South Africa and abroad, is its potential for growth. According to a 2012 PricewaterhouseCoopers report on the South African gaming industry, the country’s casino market is expected to see gross gaming revenue increase by an annual rate of five per cent over the next few years. By contrast, GGR for LPMs rose by over 30 per cent in 2011 and PwC predicted it would increase by a compound annual growth rate of 17.6 per cent in the years to 2016. To date, only around 20 per cent of the permitted machines are actually in operation, meaning there is huge scope for further expansion.
“The LPM market has grown steadily since sites were opened in Mpumalanga, the first province to roll out LPMs,” explained Tina Bodill of equipment supplier Atomic Gaming. Her company first identified opportunities in the LPM market in 2007 and, following careful consideration and selection of suppliers, it began working with Merkur Gaming and Casino Technology and entered the market with new games in 2012.
Read the full article in the April issue of InterGame
