South African gaming and hotel operator Sun International is broadening its horizons, focusing on the Latin American market, to offset slow growth at home.
The gaming group’s merger with Dreams SA, which has a portfolio of hotels, casinos and restaurants, in June gave Sun International 55 percent of the merged entity. Now, the casino operator is planning to bid for more casino licenses in Chile next year, Sun International chief executive Graeme Stephen confirmed to Reuters.
“Plans are well advanced to expand in the region. We have plans for expansion in Peru and further down the line Brazil seems to be opening up to licensed casinos,” Stephens told the news outlet.
Why Latin America? According to the Sun executive, his company “has low level of debt on its Latin America balance sheet,” which gives it “enough capacity to finance new deals.”
“Roughly 30 percent of group revenue now comes from Latin America and over the next few years we expect this proportion to increase as we capitalize on the opportunities that are in the pipeline,” said Stephens.
Sun International, which has already divested its assets in several African countries, is sailing out of Nigeria to focus on its casino business in South Africa and Latin America. The gaming group’s “Sun Dreams” entity has a total of 13 properties with 6,500 slot machines, 33, table games, six hotels and 25 restaurants spread out in Chile, Colombia, Panama and Peru.
Despite its Latin American expansion, the casino operator still earns 69 percent of its revenue and 73 percent of its profit in South Africa.
Stephens, who is stepping down from his position in April 2017, has been credited with Sun International’s successful expansion into the Latin American gaming market.
“The merger with Dreams has been achieved, and Sun International now has a controlling interest in the largest gaming group in LatAm (Latin America). The current pipeline of strategic opportunities in that region has been established, with the executive team in LatAm directly responsible for implementation,” said Valli Moosa, chairman of Sun International.