One of South Africa's leading casino executives has warned that government proposals to introduce a 15 per cent withholding tax on gambling winnings over ZAR25,000 could have wide-reaching consequences for the industry.
The tax, which was put forward during Finance Minister Pravin Gordhan’s Budget speech in February, is due to come into effect in April next year.
The announcement has been met by criticism from across the gambling industry, with the horse racing industry expected to be the hardest hit. However, Marcel von Aulock, chief financial officer of the Tsogo Sun Group, believes that the country’s casinos will also suffer.
"We are very concerned about this tax," he told InterGaming. "It has the potential to be far more detrimental to casinos than people imagine.
"The main issue is that it has the same impact as changing the win hold percentage and consumers are very sensitive to changes in hold percentage. If the consumer no longer feels they are getting value for money from their gaming experience they will move their spend to other forms of leisure."
For more on the South African casino market, read next month’s issue of InterGaming.
