With the possibility of a second casino license in Cape Town inching closer, rivals Sun International and Tsago Sun have both initiated court action in what promises to be an epic battle over the city’s casino market.

Tsago Sun, the largest listed tourism and hotel company in South Africa, suggested on Wednesday that the potential relocation of one of its smaller casinos in the Western Cape to Cape Town was possible. Currently, the Cape Town casino market belongs to Sun International, with its cash-spinning GrandWest Casino in Goodwood, which boasts close to R2.2bn in annual revenues.

Although provincial authorities have yet to make an official decision, the much talked about proposal would involve a casino license already in place in the Western Cape to be relocated to the Cape metropole. Three Western Cape licenses are owned by Tsago Sun, including Caledon, the Garden Route, and Mykonos, while the Golden Valley casino in Worcester is owned by Sun International.

Confirmation of court action was confirmed at an investment presentation by Tsogo CEO Marcel von Aulock. The move is an effort to compel the Western Cape government to permit one of the smaller casino licenses in the Western Caper to be relocated to Cape Town, according to Business Day Live. Meanwhile, court action had also been launched by Sun International in its attempt to prevent the Western Cape government from allowing an outlying casino to be relocated to the metropole, Aulock said. For at least five years the second casino license for Cape Town has been shuffled around as it would help to strengthen the provincial government’s coffers, but progress on a decision by provincial authorities has been slow-moving.

A second casino license for an establishment similar in size to GrandWest has been resisted by Sun International. The South African resort hotel chain and casino destination warns that another casino in Cape Town doesn’t guarantee the increase of commensurate tax flows because rather than additional revenue being generated by new gamblers, there would be a relocation of the existing client base.

News of the legal developments regarding the second casino license comes on the heels of Tsago Sun’s proposed acquisition of a 20 percent strategic minority stake in GrandWest and Golden Valley, Sun International’s casino properties. The initial thought was that the cross-ownership of GrandWest, in one of South Africa’s most profitable casinos, would curb Tsago Sun’s enthusiasm in its pursuit of the relocation of one of its existing licenses in the Western Cape to Cape Town. If the relocation is successful, it might be difficult to prevent the erosion of the value of Tsago’s 20 percent stake in GrandWest.

It was stressed by Von Aulock that Tsago’s pursuit of the second casino license was not influenced by the deal struck at Golden Valley and GrandWest. He said there are still a lot of considerations that remain unknown, but that a regulatory movement is expected soon. He went on to say that he doesn’t think the provincial authorities want to eradicate the tax base of GrandWest, but that Tsago strongly believes there is a casino market in Cape Town that remains untapped.

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