South African bookmakers take legal action against Phumelela

South African bookmakers are up in arms over the decision by racetrack owner, Phumelela Gaming and Leisure to raise the fees charged to show live horse races at betting shops across the country. The bookies have decided to take legal action against the track owner and have filed a case in court. The lawsuit is being brought against the Johannesburg based Phumelela by 37 bookmakers, the majority of them from the Gauteng region. The bookmakers are particularly concerned with the demands placed on them by the racetrack owner to pay 3% of their monthly revenue to the tracks for the right to show the live races.

According to the Chief Executive Officer of Phumelela, Rian du Plessisis, the racetrack owner has now changed the fee to fixed monthly payment.

The bookmakers are concerned that the increasing fees will affect their revenues and they will not be able to run their businesses in a profitable manner. This point was reiterated by the general manager of Top Bet SA which operates 13 bookmaking stores in Gauteng and Limpopo. “It is a worrying case,” said Prean Naidu. “It will affect our business and the horse racing industry in general. With that system, we will lose at the end of the day.”

Bookmakers are required to pay an extra fee to display the Tellytrack channel (majority owned by Phumelela) which shows domestic and international horse races. The group’s CEO du Plessis said that Tellytrack is “a very valuable product.”

“That’s why we are charging a decent price,” he said. “The increase in fees were long overdue.”.

The horse racing gambling industry in the country is worth R10 billion a year, and Phumelela owns and manages five out of the nine South African racing tracks. The company’s net income for the first six months, ending January, climbed 32% to R51.7 million, while revenue climbed to R587 million – a 19% increase. According to Phumelela’s financial statement published, the “sport of thoroughbred horse racing in South Africa is growing again, with on course betting and attendances growing by more than 10%”..

Last year, around 435 meetings were held, according to the National Horseracing Authority. The most popular annual meet, the Durban July Handicap, offers a prize pool of R3.5 million.