South Africa is one of the planet’s sporting hotspots, with a proud and successful record in football, rugby, cricket, golf and more. Even those who might describe themselves more as “armchair participants” like to get involved, and one of the most popular ways of doing so is to place a small wager. It’s not so much about trying to win money, nice though that might be, it’s more a case of having a personal stake in the outcome and an extra reason to celebrate when your team comes out on top.

As such, sports betting is big business in South Africa, and has become even more so in this age of online sports betting, where you can place a bet without having to leave that armchair. It is a particularly competitive segment in South Africa as it is ostensibly the only permitted form of online gambling. One says “ostensibly” because there are dozens of so-called South African online casinos that are popular with South African players, but these are all based offshore for regulatory reasons. 

So it is that gambling businesses within the nation’s borders must focus on sports betting. It’s a market that is starting to attract the attention of some of the biggest global operators, and the first to show its hand has been UK bookmaker Betfred, which has just agreed to the purchase of South African sports betting provider Betting World.

A R120 million deal

Betting World is the sports betting division of South African horse racing giant Phumelela Gaming and Leisure. The acquisition was agreed earlier this year for a total consideration of ZAR 120 million, although that figure is still subject to final confirmation. 

Betfred, meanwhile, is a classic case study in how mighty oaks can grow from small acorns. The business started life in the 1960s as a solitary bookmaker’s in the English town of Salford, which has now been all but swallowed up by Manchester. It was owned and operated by Fred Done, who at 78 is still the company’s Chairman and plays an active role in the business. 

Betfred now turns over in excess of £10 billion per year, and is one of the most famous names in sports betting. As well as having 1,600 retail operations throughout the UK, it is one of the most popular online sports betting platforms and has also expanded into Spain and, most recently, the USA. Betfred’s expansion into the South African market will make it the nation’s leading sports betting provider.

Only the beginning?

There are still some final regulatory boxes to be checked with regard to the transfer of shareholdings before the ribbon can be officially cut. However, it could be that the acquisition of Betting World is only the beginning. 

Last year, Phumelela was forced to suspend trading on the Johannesburg Stock Exchange, as its core horse racing business was rocked to the core by the lockdown. The business delisted and filed for bankruptcy protection in a desperate bid to stay afloat. Betfred, meanwhile, was not affected so severely, thanks to its online offerings and diverse product lines. The company saw an opportunity and made its first tentative approaches, initially offering a sum just shy of R1 billion to purchase Phumelela lock, stock and barrel. 

That approach was rejected, as Phumelela’s creditors preferred the company’s alternative rescue plan, which was to sell the business to one of its primary stakeholders, operating under the name of Mary Oppenheimer Daughters (MOD). It did, however, lay the foundations for the divestment of Betting World, and Betfred clearly still has the appetite to maximize its footprint in South Africa. As such, further business between Betfred and MOD seems a distinct possibility in the months ahead. 

A global industry

There is some irony in the fact that a business that started out as such a hyperlocal operation, and which is still run by its original founder has been a frontrunner in embracing the globalisation of sports betting. Today, sports enthusiasts place wagers on events and tournaments all across the globe, and sports betting has become a truly international business. Betfred’s foray into the USA speaks volumes for this – it’s a market that is growing and evolving at lightning pace as one state after another legalizes sports betting. 

Now, mergers, acquisitions and partnership agreements between US and UK betting companies are becoming commonplace. However, Betfred got there first, and now it has pulled off the same trick with its entry into the South African market. 

Industry commentators suspect that the arrival of Betfred will cause a stir, and despite Fred Done’s advancing years, the business will be viewed as an upstart and a disruptor. In the UK, Betfred is accustomed to making heavy use of promotions and giveaways to tempt sports fans away from the competition. It seems reasonable to expect similar marketing ploys in South Africa, and local rivals such as Hollywoodbets and World Sports Betting will be forced to fight fire with fire. It all points to an exciting and potentially lucrative time for South African sports bettors, who will be the ones to really benefit. 

Betfred’s arrival is also likely to once again raise questions about whether the time is right to allow other forms of online betting in South Africa. If that happens, there’s one bet you can place with confidence – that a certain 78-year-old from Salford will be first in line for an operator’s license!