South African resort hotel chain Sun International revealed new plans to expand into Peru and Brazil after completing a merger with Dreams SA of Chile.
The expansion is a result of high competition and limited casino licenses on offer in South Africa, which has gaming companies looking elsewhere, leading them to Latin America. Sun International is no different, and now holds 55 percent of Dreams SA after completing a merger in June. Sun sees Latin America as an outlet to boost its gambling and casino revenue, where is struggled at home.
“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,” Graeme Stephens, CEO of Sun International, said in a statement.
Stephens is leaving his post at Sun next April, but the company has big plans to bid for more casino licenses in Chile during 2017 after its merger with Dreams SA fully closes. Dreams already owns a portfolio of hotels, casinos and restaurants that Sun will use to leverage its growth potential.
South Africa and Latin America are very clearly the prime targets for Sun moving forward; the company spent 2016 selling assets in multiple African countries and recently announced plans to cease operations in Nigeria, despite the country representing the largest economy on the continent. After the merger, the new company will be known as “Sun Dreams,” and will have assets in Chile, Columbia, Panama and Peru, a total of 13 properties equipped with 6,500 slot machines, 33 table games, six hotels and 25 restaurants.
Furthermore, Stephens said Sun is positioned well to expand into Latin America due to its low level of debt in the market. The company currently earns roughly 69 percent of its revenue and 73 percent of its profit in South Africa. Sun also expressed interest in online gaming, and owns a small online sports betting company, “Sunbet,” which it purchased in 2014. Stephens is waiting for online gaming to be legalized in South Africa before moving forward.
“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,” Stephens said in a statement.