Limited Payout Machines

As defined in the National Gambling Act, 7 of 2004, a ‘‘limited pay-out machine’’ means a gambling machine with a restricted bet and prize.

There are three main categories of players in the Limited Payout Machine (LPM industry), namely route operators, site operators and the operator of the National Central Electronic Monitoring System (NCEMS). Route operators are companies that are licensed to own, manage and operate LPMs in conjunction with a site operator. Licences are typically given to operate a maximum number LPMs in a province.  Six operators are operational in KwaZulu-Natal; five in Gauteng; four in North West; three in Mpumalanga; two in Northern Cape, Eastern Cape, Western Cape and Limpopo; and one in Free State. NCEMS is a centralised LPM monitoring and evaluation system operated on a contract basis by Zonke Monitoring Systems, located in Johannesburg.

The regulations on LPMs anticipated a roll-out of 50 000 LPMs in South Africa. This was to occur over two phases, the first being 25 000 machines. On 20 June 2003, the first LPM site was established and operated in Mpumalanga. Similar to the rapid development of the casino industry in its early years, growth in GGR in the LPM industry is largely a function of the roll-out of machines, as shown in the graph below.

Compared to FY15, the growth in GGR generated in the LPM industry for FY16 has dropped. An increase by 17.8% from FY13 to FY14 and by 19.6% from FY14 to FY15 was recorded, however followed by only a 13.7% increase from FY15 to FY16. The number of active LPMs increased by 10.7% from FY14 to FY15, and by 6.4% from FY15 to FY16, Quarter 4. This is mainly as a result of increases in the roll out of active LPMs from FY15 (10 279) to FY16, Quarter 4 (10 934) in all provinces, except Gauteng and Limpopo. GGR generated in the LPM sector represents 9.0% of the total amount of GGR generated by all licensed gambling modes in FY16.




       

Variable

Quarter 1

1 Apr – 30 Jun 2015

Quarter 2

1 Jul – 30 Sep 2015

Quarter 3

1 Oct – 31 Dec 2015

Quarter 4

1 Jan – 31 Mar 2016

Operational LPM site operators

2 018

2 037

2 083

2 072

Installed LPMs

10 304

10 409

11 102

10 934


 











   




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