“Howzat!,” “Leg before Wicket” and “Loose-Head Prop” are terms that will seem foreign to most United States-based readers, but for any avid sports fan in South Africa and any other former British colony, they are the lingua franca of a fanatical way of life when watching cricket or rugby.

The names of the some of the sports may even sound strange to American ears, but these games have a massive following worldwide. Rugby, which originated in England when a young gentleman named William Webb-Ellis became bored with kicking a soccer ball and picked it up and ran with it instead, is similar to American football without the helmets and has a huge following in Britain, France, Australia, New Zealand and even Argentina. Cricket, which can only be likened to baseball with a square bat and where the pitcher throws the ball onto the ground before the batter attempts to strike it, has an even bigger following in far-flung parts of the former British Empire, such as the West Indies and the Indian sub-continent where the sport is akin to religion and millions of dollars are staked on each game. In South Africa the fanaticism of sports fans is no less fervent and it is said the strength of the local currency can fluctuate on the outcome of a big rugby match. With the country’s rugby side having recently won the International Rugby Board World Cup and South Africa’s cricket team coming off a rare test series victory in Pakistan, sporting sentiment is at a high last seen when South Africa won the 1995 Rugby World Cup. It is against this backdrop that international sports betting operators are tapping into a potentially lucrative market, while their South African counterparts are resting on their laurels, content to cater to what they perceive is a very small market.

While the country has a gambling culture that is evidenced by the success and number of land-based casinos, and with a relatively high degree of disposable income, sports betting—apart from horseracing—is an activity that has, strangely enough, not been fully exploited.

Fixed-odds sports betting, and its variations like spread betting, are not new to South Africa, but have met with varying degrees of success and a number of bookmakers do offer odds on all manner of sports. Even Phumelela, one of the country’s major horseracing operators, has tried its hand at sports betting, but only to a limited degree as seen by its co-opting an international bookmaking partner. In late 2006, Phumelela entered into a venture called SportsSpread SA with Irish company Worldspreads in an effort to tap into the spread betting market. Even then, Phumelela conceded that the market was a niche one, and that start-up costs for the venture were minimal.

At the launch of the venture, Phumelela’s COO David Attenborough said that SportsSpread SA’s product was geared towards the more sophisticated end of the market. “Spread betting is account-driven, where the total in the account can cover the maximum risk. Punters can place a ‘stop loss,’ which closes the bet if the value of the spread moves against the punter’s bet by a specified amount.” SportsSpread SA is 99 percent-owned by Phumelela and one percent by Worldspreads, but the profit split will be 50/50, according to Attenborough. He added the company had spotted a gap in the market with South African customers accessing spread betting through offshore companies, a trend SportsSpread hoped to reverse. Start-up costs from Phumelela’s side only amounted to R500,000 (US$74,000), possibly reflecting the size of the market or Phumelela’s caution in entering a market that may or may not be as big as some experts believe.

Other ventures into the local sports betting world have also been equally cautious, and it is possible that this caution may have brought about the mixed successes experienced. Advertising of sports betting facilities in the past has usually been limited to a few adverts on television, some Web site advertising and a general perception that punters will find the operators. What these operators may have failed to realize is that, while gambling and even sports betting is not a new phenomenon to South Africa, its prevalence has been limited and only since 1996, with the advent of new gambling legislation, have South Africans begun to consider gambling as legal. It may be this historic perception that has curbed sports betting somewhat, and as time passes, as has been seen with casinos, sports betting on events other than horseracing will become more widespread.

What sports-betting operators will also need to realize is that the South African sports market is fertile ground and that in order to grow a sustainable sports betting industry, they will have to enter into the venture with a long-term investment attitude and look to create a sports betting culture through education and sustained marketing.

It is difficult to determine the exact size of the local sports betting market, as provincial and national regulators tend to lump sports betting statistics along with those of horseracing as many bookmakers and off-course totalizator agencies that have historically offered pure horserace betting, now also offer sports betting as part of their service. A great many South African sports punters also place their bets online with reputable international bookmakers which make those bets difficult to monitor. From what it can monitor through bookmakers and sports betting sites that are licensed locally, the National Gambling Board puts national sports betting gross gaming revenue (turnover less taxes) at just over R15 million (US$2.2 million) for the past financial year.

When viewed in the greater context of gaming and the gigantic turnover for sports books on the Indian subcontinent, this is not a huge amount, and one can understand Phumelela’s cautionary approach when viewing the numbers, but with a number of high-profile sporting events due to be held in South Africa, including the 2010 FIFA World Cup, possibly sports betting operators need to begin looking at promoting long-term growth.

The means to reach greater numbers of sports viewers who can potentially be converted to punters has been handed to bookmakers with the ready accessibility of satellite television in the form of African satellite operator DSTV, which beams a plethora of sporting events into South African and African homes. DSTV has recently begun offering a more affordable satellite bouquet in an effort to reach a broader subscriber base, namely the millions of soccer fans throughout Africa. A number of international sports channels such as ESPN and Sky News Sports are also available and with a dedicated horseracing channel, called Teletrack, as a ready base for sports betting. The next step would be to run sports betting educational and ‘how-to’ programs in an effort to breed smarter betting fans, as they already have the inherent sporting knowledge of most fans and would certainly like to pit their wits against the experts with the added bonus of winning some money.

In short, I think that South African bookmakers have been guilty of a lack of vision. Given hordes of fanatical fans, the potential willingness to gamble and the means to reach millions of possible sports bettors, they have fallen short of tapping a market that could be vast. Given events such as the pan-African Cup of Nations soccer tournament in the run up to the FIFA World Cup and other sports such as American Basketball which is gaining a massive following in Africa, the learning-ground for sports bettors has been created; it only requires the wherewithal of a savvy operator to make the most of it.

Roy Bannister is the publisher and editor of Gaming for Africa magazine, Southern Africa’s leading casino industry publication. He may be reached by e-mail at afrogame@mweb.co.za