TAB and Betting World’s owner says the internet isn’t killing old-fashioned betting shops – and it is looking for franchisees to open more
- Horse racing company Phumelela believes old-fashioned betting shops will continue to be important.
- It opened two Supabets mega-stores in December, will open another in April, and plans at least eight more of its own stores.
- It is also rolling out a franchise initiative under its Betting World and TAB brands – and looking for more partners, even if they have no gaming or bookmaking experience.
Online betting is fine and well, horse racing company Phumelela said on Wednesday, but there is still a place for old-fashioned betting shops.
And it is looking to set up more of those in the near future.
"Retail stores remain popular with our customers and they are a place to congregate and enjoy a convivial time with fellow punters," Phumelela said in commentary on its half-year results to the end of January. "OTC [over-the-counter betting] will continue to contribute an important share of betting income for the foreseeable future."
In the six month period the company booked R627 million in gross betting revenue, an increase of 5.3% despite what it described as tough economic times for its gamblers.
Phumelela was set up to corporatise horse racing in Gauteng, and now operates horse-racing tracks and betting operations across much of the country. Its biggest shareholder is the Thoroughbred Horseracing Trust.
The company's Betting World and TAB outlets are already a familiar sight, but it told shareholders it is rolling out more stores under both those brands, as well as under its Supabets joint venture.
In December it opened Supabet mega stores in Kempton Park and Pretoria, and a third in the Johannesburg CBD will open in April, it promised.
"A further eight stores have been identified and will be opened in due course."
It also plans to go big on franchising – with partners that don't necessarily need any experience in betting.
In 2016 Phumelela did its first franchise deal in the North West, investing R20 million and taking a 5% stake in a chain of 10 new retail outlets. This January, it said, it increased its shareholding and put up another R20 million to expand that chain.
"The franchise initiative will be deployed in other provinces where new betting licenses are issued to local previously disadvantaged individuals," it said, without providing details.
Franchisees must be from a previously disadvantaged group to meet licensing and regulatory requirements, but that is the only major requirement.
"Franchisees need no prior bookmaking or betting experience as the group provides a turn-key and fully odds-managed solution in addition to the well-known brands of the group," Phumelela says.
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