Charlotte Mathews, Consumer Industries Editor
6 December 2004
Cape Town — Gold Reef Casino Resorts and its partner in Gold Reef City casino near Johannesburg, Akani Leisure, have stepped in to help Silverstar Development secure the western Gauteng casino licence for which Silverstar has been waiting for seven years.
This is the sixth and last casino licence available in Gauteng.
The award of the licence for the R500m casino on the West Rand has been mired in legal action since 2000. Bids were put together in 1997 and the licence was initially awarded to the Rhino Hotel and Resort group, but Silverstar objected to the award on the grounds of irregularities.
Subsequently, Rhino and Silverstar merged to form one bid, that was reexamined by the Gauteng Gambling Board. The board rejected it.
The high court ruled that Silverstar must be awarded the licence but the Gauteng Gambling Board, which opposed Silverstar's application on the basis that its plans had a heavy reliance on cash flows from a temporary casino, has taken the matter on appeal, due to be heard in March.
Gold Reef said yesterday that it and Akani had entered into an option to acquire all Silverstar's shares and its rights to the casino licence for R25m, which would be used to acquire land to develop the casino and finalise the awarding of the licence.
Gold Reef CEO Steven Joffe said a site near Krugersdorp had been bought. It was located on top of a mountain, with extensive views. The land provides security for Gold Reef's funding.
Exercise of the option depends on a number of conditions, including Silverstar being awarded the licence on terms acceptable to Gold Reef Casino Resorts and Akani.
The fulfilment of these conditions was expected to be "a lengthy process", Joffe said. The process involves not only the appeal court hearing but gaming board and competition authority approval as well.
Silverstar's application proposed a casino development costing R450m. The final plans suggest it will cost about R500m.
If the option is exercised and the development goes ahead, there will be payments to Silverstar's shareholders.
Gold Reef also operates the Golden Horse casino near Pietermaritzburg, Casino Mykonos in Western Cape, Garden Route Casino at Mossel Bay and Goldfields Casino near Welkom.
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