PHUMELELA RACING
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Phumelela CompanyRacing name FEATURE
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Company name Phumelela Racing FEATURE FEATURE
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humelela Racing is one of only two horseracing and tote operators in South Africa. The company was founded in Gauteng in 1998 as part of a corporatization process that saw the three racing clubs in the province transferring their assets to the new company. In the following year’s horseracing in Northern Cape, Free State and Eastern Cape joined Phumelela and it was listed on the Johannesburg Stock Exchange in June 2002. It is now licensed to operate in seven of the nine South African provinces and has a current annual betting handle of about R2.7 billion (€2.8 million). The new business did not have an easy birth, as Marketing Manager Robert Garner explains, “When Phumelela took over horseracing in Gauteng, the industry was experiencing serious difficulties. Most racecourses were operating at a 4
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loss, interest in horseracing was waning and competition had arrived, initially in the form of urban casinos and later the national lottery.” However, the company has, over the past 12 years, managed to achieve a real turnaround in fortunes. Aided by the racing clubs in KwaZuluNatal and Western Cape bringing their operations under the control of Gold Circle, the company was able to create a platform for the long-term sustainability of horseracing in South Africa. As of 2002, all tote bets in South Africa have been commingled into single national pools under the TAB banner, which is carried out through Phumelela’s Amtote computerised betting system. The use of technology is something that has been instrumental in Phumelela’s reinvention of South African horseracing. There are over
A PROVEN TRACK RECORD Green’s Sand
Since 1979
SUPPLIER OF SILICA SAND TO THE EQUESTRIAN MARKET Green’s Sand also specialize in various mixes to the turf industry (Most recently supplied growing medium to most of the soccer stadiums)
Company name Phumelela Racing FEATURE FEATURE
400 off-track tote outlets and two telephone betting centres. In addition, bets can be taken online and through mobile phones utilising WAP technology. “We also established an exclusive television channel for horseracing called Tellytrack, which shows all horseracing in South Africa and selected overseas races. As well as being shown live in all TAB outlets, it is also available on pay TV” says Mr Garner. Several years ago the organisation entered into a joint venture with Gold Circle to form PhumelelaGold Enterprises (PGE). It is managed by Phumelela and owns all media and information rights from the two companies, as well as Tellytrack. Additionally, the company provides betting services to 20 countries overseas via live web streaming.
The organisation’s product offering internationally goes beyond the countries consuming the product being able to show races live on TV in betting outlets or online. In addition horseplayers in the countries consuming the product can also bet directly into South African tote pools because Phumelela’s tote betting system is capable of commingling internationally. Phumelela hosts the global tote pools on the Dubai International Racing Carnival and Dubai World Cup annually and in October 2002; it made history by successfully commingling TAB betting pools on the Breeders’ Cup race meeting at Arlington Park in Chicago with those of the host tote. This enabled South African customers to bet into the huge USA pools and placed Phumelela squarely on the global horseracing and tote betting stage.
One exciting new opportunity is night racing which we launched last year at Turffontein, our flagship racecourse
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Company name FEATURE Your Payroll & HR Solution... Geared for your requirements The company’s client base numbers 1.5 million South Africans, and is divided into two parts, as Mr Garner explains; “our customers are not only people placing bets at our tote outlets, online or by telephone. Other Phumelela customers include racehorse owners and services we provide to them include training centres in Johannesburg, Vaal, Kimberly and Port Elizabeth, that we both own and manage. We are also provide transport for horses from their stables to the racecourse.” Complimenting this diverse range of customers is an equally diverse supply chain, “clearly without breeders, owners, trainers and jockeys there would be no racing. And, of course, the horses are the stars of the show” says Mr Garner, “Away from the turf itself, as a vertically integrated operation; Phumelela is totally responsible for racing and TAB or tote betting in its own regions. We are reliant on Gold Circle to generate racing in the Western Cape and KwaZulu-Natal and on various overseas racing jurisdictions in terms of the supplementary product we import from them.” Racing takes place in South Africa all year round, and Phumelela’s major feature-race seasons are the Phumelela Spring-Summer Feature Season, which runs from, October to November, and the Phumelela SummerAutumn Feature season, which runs from, February through April. All these events, however, are at the mercy of the elements, “this year we have had some real problems with the weather. This has not only affected racing in South Africa, but also UK racing on which we bet,” says Mr Garner, “loss of income through bad weather causing races to be cancelled has had an even greater affect on us than the recession.” As well as being involved in all areas of horse racing, in 2003 the organisation diversified its product range by creating a soccer bet called Soccer 6. The yearly turnover of this new sector has grown steadily & is set to top R300 million (€31 million) in the new soccer season and this will represent 11% of Phumelela’s total annual turnover.
www.praxima.co.za info@praxima.com Tel: +27 (0)87 353 4140
Given all these activities that Phumelela Gaming & Leisure are involved in, what lies ahead for the company? “One exciting new opportunity is night racing which we launched last year at Turffontein, our flagship racecourse. It is already achieving results and is a destination both for corporate functions and for 20-somethings looking for exciting night-time entertainment.” However, Phumelela’s main focus in terms of growing the business is on the international front. “We are expanding aggressively abroad and are constantly seeking new opportunities through PGE. There are some regulatory obstacles but we aim to overcome these as quickly as possible. In the future, we are looking to our international operations for growth as a company, with 50% of profits coming from international dealings. We are positioning ourselves as a major player on the global 24/7 horseracing circuit.”These are ambitious plans but, for a company that has succeeded in turning the sport of kings into something that is interesting, it is nothing short of the odds on favourite. END www.southafricamag.com
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