South Africans gripped by new gambling craze

South Africa is bankrolling its new democracy with a multi-million pound gambling craze in which this week the latest phase of Caesar's Palace, modelled on its Las Vegas namesake, opened in Johannesburg. But with new 24-hour casinos opening every month, analysts are warning that "easy money" promises are harmful in a country that has the world's biggest wealth gap.

South Africa is bankrolling its new democracy with a multi-million pound gambling craze in which this week the latest phase of Caesar's Palace, modelled on its Las Vegas namesake, opened in Johannesburg. But with new 24-hour casinos opening every month, analysts are warning that "easy money" promises are harmful in a country that has the world's biggest wealth gap.

Ntombi Zulu, 39, a black woman of Soweto, looked dazed as she emptied the last of her tub of tokens into a pinging, blinking slot machine - one of 1,600 at Gold Reef City. "I've lost 20 rands [£2] but I'll be back," the unemployed woman said.

"Go on then," she said out loud to herself, as she decided to dispatch into dreamland her last four rands - her transport money. This sparked a conversation with Alroy Plaatjes, a 35-year-old teacher, at the next machine who is a regular at Gold Reef City, a palace of kitsch built on a defunct gold mine near Soweto.

"I came in with 250 rands an hour and a half ago and I am leaving with 350 rands. That's my petrol money for the week. Gambling is fine as long as you stay in control. I come here whenever I am feeling depressed," said Mr Plaatjes, who is mixed-race. In South Africa's casinos, people of all races win and lose money together.

In the mind of Ernie Joubert, managing director of Global Resorts which built Caesar's near the airport, multi-racial gambling is one of the "positive" legacies of the apartheid years. Then, rigid Calvinism allowed casinos only in artificial countries called homelands. "Under the previous dispensation, people of all races went to Sun City to gamble. In that respect Sun City helped prepare people for the new South Africa," he said.

Mr Joubert got his casino licence - one of five in Gauteng (Greater Johannesburg) - by seeking out "black empowerment" capital for his 1.3bn rand development. This week, he invited the American model Tyra Banks and the boxer Sugar Ray Leonard to make guest appearances.

Caesar's in Gauteng employs 1,500 people, mostly from the townships. With its 1,500 slot machines, 50 gambling tables and an average 13,000 to 15,000 visitors per day, it is typical of the 18 casinos which have opened or been approved since February 1998.

According to the weekly Financial Mail newspaper, punters in Gauteng wagered more than 28bn rands - close to 4 per cent of South Africa's gross domestic product - in the first year of legal casinos. Other figures say 80 per cent of South Africans' leisure expenditure goes on three things: casinos, lotteries (legal since the beginning of this year) and mobile phones.

In an obsessively materialistic country which also has growing poverty and a health system collapsing under the pressures of Aids, the industry is an ideal way to balance government books. Provinces charge casinos one-off fees on each slot machine, a 9 per cent gambling tax and 14 per cent VAT.

In fact, as its cities, theatres and museums die - due to crime, it is said - South Africa seems to be keeping its own history alive at the casino. Caesar's has been built where the Codesa talks, which laid the foundations for the "new" South Africa, took place. The casino is to open a small museum in recognition of the fact. Other casinos are replica-land: Gold Reef City has the once-legendary Globe Theatre and the facade of the Central Hotel.

Now, some South African commentators are warning that it is all a racket and the Trade and Industry Ministry has promised to investigate cases of parents locking their children in cars for five or six hours while they gamble. Last week, Rich Mkhondo, a columnist, wrote in The Citizen that increased legalised gambling would lead to "a massive transfer of money from the poor to the well-off, a good work ethic giving way to a pursuit of easy money".

But Peter Collins, director of the Centre for the Study of Gambling at Salford University, says it is wrong to be sniffy. "The South African government did not legalise casinos to be reckless or because it thought they would be a cultural embellishment," he said. There was "an epidemic of illegal gambling which had to be stopped".

However, Professor Collins warned: "Gambling addiction does not seem to respect class, race or nationality. But there are reasons to be cautious in developing countries where there is ignorance, lack of education, higher numbers of poor people, no welfare state and where breadwinners typically have 10 dependants," he said.