Sun Boardwalk applies to cut staff as bingo terminals, weak economy bite into revenue
More than a third of the employees at Port Elizabeth’s once-thriving flagship casino offering could face retrenchment due to dwindling revenue and the impact of mushrooming bingo terminals on the city’s gambling industry.
This has emerged following an application by the Sun Boardwalk Casino in Summerstrand that would allow it to axe 252 workers.
A notice of the application, submitted to the Eastern Cape Gambling and Betting Board by Emfuleni Resorts, was published in The Herald on Monday.
According to the notice, Emfuleni’s proposed amendments to various clauses in its casino licence agreement include a clause that would lower the required staff complement from 652 permanent workers to 400 full- and part-time employees.
Thabo Mosololi, chief operating officer of Sun International – of which Emfuleni Resorts is a part – attributed the application to dwindling revenue at the casino.
“The casino complex has, since 2014, continuously lost revenue, which has impacted [on] profitability and ability to service its debt obligations,” Mosololi said yesterday.
“The intention [of the application] is to reduce operating costs in light of the reduced revenue and profitability.”
The Herald reported in October that the Boardwalk Casino had shown disappointing revenue during the first half of the year, while the Sun International group showed a decline of 9% in casino revenue overall.
At the time that the Sun International financial results were released, chief executive Anthony Leeming said the declining profits in the Bay could be attributed to a combination of a weak economy and the competitive threat from bingo terminals.
“The company [was affected] by the EBT [electronic bingo terminals] in Port Elizabeth and expects a further loss in revenue now that one has opened in Uitenhage as well,” he said.
“We definitely saw a loss when the Uitenhage one opened in September.”
Leeming had also indicated that the closure of the Fish River Sun Hotel and Resort last month – due to declining profits – would save the company about R25-million in cash flow, but it would have to go back to basics and reduce costs.
Despite this outlook, Mosololi gave the assurance that the Boardwalk Casino would not close its doors.
“Closure is not being considered,” he said. “We believe that with appropriate restructuring there is still much opportunity to operate a successful business.
“All posts across the property are being reviewed.
“[Possible retrenchments are] subject to the approval of our proposed amendments, after which we will start engagement with the relevant stakeholders.”
However, employees had not been informed of the possibility of job losses by early yesterday afternoon. Asked about job security at the casino, an employee said that no official notice of retrenchments had been given by the company.
“There are rumours, but nothing has been confirmed and we haven’t received anything,” the employee said.
According to gambling board chief executive Mabutho Zwane, any decision regarding the future of the Boardwalk’s employees is still far off, as the application will be subject to extensive public participation processes.
“The application was published for objections and comments,” Zwane said.
“Public display copies of the application can be found at the ECGBB offices in Beacon Bay [in East London], the ECGBB website, the Boardwalk Casino and at the Nelson Mandela Bay municipal offices.”
The closing date for comments and objections is January 3.
“The board will [then] conduct its own investigation on the matter and consider any comments or objections received,” Zwane said.
“Public hearings will be held around March or April.”
The Nelson Mandela Bay Business Chamber expressed concern about the possible effects of job losses.
“We are saddened to hear of the potential job losses,” chamber chief executive Nomkhita Mona said.
“Job losses do have an impact on the economy of the city – not only on the affected families, but also in terms of the knock-on effect on businesses in the region.
“The Boardwalk complex has changed the face of the Nelson Mandela Bay beachfront and has become a popular venue for international, national and local visitors,” she said.
“It remains an asset for the city as a popular tourism destination.”
A Bay representative of the SA Commercial, Catering and Allied Workers Union could not be reached for comment.