Alternative gaming group Phumelela – which still holds a strong position in the tote betting industry – has bought a strategic stake in Cape Town-based online fixed-odds operator Interbet. Phumelela disclosed no value for this strategic investment, which is valued at R1.3bn on the JSE.
In a nutshell, Interbet is an online betting exchange for licensed bookmakers, which allows punters to take fixed-odds on horses to win or place, but cannot lay bets. The deal with Interbet should enable Phumelela to access TAB (Totalisator Agency Board) pools from the Interbet site, which should boost tote turnovers.
Interbet offers a wide range of betting opportunities, including horse racing, soccer, tennis, cricket, golf, boxing, rugby, motorsport, American football, basketball and cycling.
The deal forms part of Phumelela’s strategy to innovate and diversify its gaming income streams as it battles with waning profits in its traditional horse racing business.
The company has already notched up notable successes in retail fixed odds and tote betting shops – recently reporting a hefty 114% rise in fixed odds operating profit to R15m in the six months to end January this year.
CEO Rian du Plessis said the company had stepped up efforts to diversify into complementary betting offerings and grow income from non-traditional sources. He said net tote betting income on soccer alone increased by 24% to R116m, while net fixed odds betting income on sports (other than horseracing) increased by 206% to R17m and fixed odds net betting income on numbers increased by 37% to R31m. Net betting income from fixed odds overall grew strongly by 39% to R75m.
Du Plessis said these growth percentages illustrated the degree to which Phumelela’s complementary soccer, numbers and other sport betting offerings were finding favour with customers.
Phumelela’s Interbet investment follows similar diversification moves by gaming groups. Sun International only recently took control at Cape Town-based Voltbet, which is now trading as Sunbet.
Western Cape empowerment icon Hosken Consolidated Investments has seen its alternative gaming subsidiary Niveus (which mainly revolves around Limited Payout Machines and electronic bingo terminals) acquiring a strategic stake in the new Kuruman casino as well as announced a move into sports betting.