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Cape Town - Black-owned gaming investment company Grand Parade Investments (GPI) has bolstered its presence in the limited payout machine (LPM) market.
On Monday morning GPI confirmed buying out Australian-based gaming giant Tatts Group's majority stake in Thuo Gaming in a R170m deal.
Thuo Gaming operates under the Grandslots brand in the Western Cape and KwaZulu-Natal. LPM machines are mostly positioned in bars or restaurants, and offer punters a maximum win of R500.
GPI, which already held a strategic stake in Thuo, has long coveted Tatt's stake in the LPM business - an obvious deal in the absence of any new casino investment opportunities in SA.
The deal gives GPI another gaming leg, adding to the group's core investments in SunWest (the operator of the GrandWest casino) and a 30% stake in gaming investment company Real Africa Holdings (which holds stakes in four Sun International casinos in Durban, Cape Town, Port Elizabeth and Gauteng).
GPI chairperson Hassen Adams suggested that a controlling stake in Thuo would make the company more operationally orientated.
Casino stable poor relation
"The deal represents an important milestone in achieving our vision of becoming a respected and major force in the African gaming and leisure sector."
He said the Thuo transaction represented a natural progression towards GPI's long-held ambition of being a black empowerment company with more direct control of its destiny.
While LPMs are mostly regarded as a poor cousin of urban casinos, GPI CEO Adrian Funkey pointed out that Thuo Western Cape was already a strongly cash generative business.
"We are confident that Thuo KwaZulu-Natal will follow suit once its site rollout program reaches critical mass."
Thuo Western Cape and Thuo KZN are licensed to run 1 000 LPMs in the respective provinces.
While LPMs cannot match urban casinos in terms of revenue generation or number of footfalls, the sector has an advantage in not being burdened with the capital expenditure requirements of urban casinos.
- Fin24.com