Gold Circle acquisition by Hollywood Racing: decision pending from KZNERA
Anticipation is growing on the pending decision by the KwaZulu-Natal Economic Regulatory Authority (KZNERA) regarding the acquisition of Gold Circle (Pty) Ltd (Gold Circle) by Hollywood Racing Enterprises (Pty) Ltd (HRE).
The KZNERA Interim Chief Executive Officer, Portia Baloyi, said all applications made in terms of Section 43A of the said Act undergo a public participation process contemplated in sections 34 and 37 of the Act.
Baloyi said that KZNERA will not be issuing a statement on the matter at this stage.
The KZNERA is a regulator of legalised gambling in the province. Baloyi said that in terms of Section 43A of the KwaZulu-Natal Gaming and Betting Act, any acquisition of financial interest of 5% or more in any entity licensed under this Act must be approved by KZNERA.
She explained that any acquirer of financial interests of 5% or more must apply to KZNERA for approval.
In July 2024, the Competition Commission of South Africa (CCSA) recommended that the Tribunal approve the proposed transaction of Gold Circle by HRE, with conditions. The commission reported that the primary acquiring firm, HRE, is wholly owned by Hollywood Sportsbook Holdings Proprietary Limited (Hollywood).
The HRE is a licensed racecourse operator and totalisator based in the Western Cape Province. As a totalisator, the HRE offers tote bets on a horse race, sporting event, and other contingency in the Western Cape.
As a racecourse operator, the HRE holds thoroughbred horse racing meetings in the Western Cape. Gold Circle, wholly owned by the Gold Circle Racing Club (GCRC), is a racecourse operator in KwaZulu-Natal - leasing the Greyville and Scottsville Racecourses.
The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market. To address public interest concerns, the merged entity agreed to a condition that they shall not retrench employees as a result of the merger, for a period of two years following the merger implementation date.
In addition, HRE made commitments towards capital expenditure, skills development, and procurement from businesses owned by historically disadvantaged persons (HDPs).
National Horseracing Authority CEO Vee Moodley said South Africa currently had three operators in the horse-racing industry: Cape Racing owned by Hollywoodbets and Greg Bortz; 4Racing, and Gold Circle. If the current deal went through, the country would have two operators.
Hollywoodbets already sponsors and has naming rights to a number of events and venues in KZN, such as Africa’s premier horse racing event, the Hollywoodbets Durban July. It also has naming rights at the Greyville and Scottsville racecourses.
Devin Heffer, brand and communications manager for Hollywoodbets, clarified that Gold Circle does not own the Greyville Racecourse or the Royal Durban Golf Club (RDGC). Both have lease agreements with the eThekwini Municipality.
“The good news is that the leasehold rights will be unaffected by the transaction and the continued tenancy of the property is assured. Apart from continued co-operation with the Royal Durban Golf Club, Hollywoodbets has no plans for the RDGC, nor is it entitled to exert any management control over either the property or the Club,” Heffer said.
Heffer said the transaction awaits the final approval of the KZNERA. He added that regardless of the ownership of Gold Circle on July 5, the Hollywoodbets Durban July will be the same glorious spectacle that the city and the venue have always hosted.
eThekwini Municipality’s spokesperson, Gugu Sisilana, said the leasehold rights of Gold Circle at Greyville Racecourse will not be affected by this transaction. The lessee, Gold Circle (Pty) Ltd, will remain the same, with only a change in its shareholding.
This represents a change of control in the lessee's shareholder, not a change of the lessee itself.
“This transaction is specific to Gold Circle and does not involve the Royal Durban Golf Club. Greyville Racecourse is a key economic and tourism asset within eThekwini. The city recognises the significance of such establishments in boosting our local economy and enhancing our tourism profile. We remain supportive of developments that promise to augment its appeal and benefit our community,” Sisilana said.
zainul.dawood@inl.co.za