Gold Circle awaits critical KZNERA decision on acquisition by Hollywood Racing
Deal News | Jan 31, 2025 | EIN
In the complex landscape of South African horse racing and gambling, a significant pending merger is on the horizon as Hollywood Racing Enterprises (HRE) is set to acquire Gold Circle, pending a crucial decision from the KwaZulu-Natal Economic Regulatory Authority (KZNERA). This transaction, having previously garnered conditional approval from the Competition Commission of South Africa, positions HRE, a totalisator and racecourse operator based in the Western Cape, to merge with Gold Circle, which operates racecourses in KwaZulu-Natal. Amidst this progression, the public participation process outlined by KZNERA is a mandatory step, with any financial acquisition above a 5% threshold requiring regulatory approval per the KwaZulu-Natal Gaming and Betting Act. The merger alleviates significant competition concerns and encompasses commitments from HRE to avoid employee retrenchments for at least two years, apart from its other assurances towards capital expenditure, skills development, and empowering historically disadvantaged persons. Concurrently, the eThekwini Municipality assures continuity in the leasehold arrangements for the Greyville Racecourse, a vital tourism and economic hub. While the final approval from KZNERA remains pending, stakeholders and communities anticipate enhanced prospects for the local economy and racing industry.
Sectors
- Gambling and Horse Racing
- Regulatory Affairs
Geography
- South Africa – The geographic focus of this article is South Africa, where both the acquiring and target companies are based, and where the regulatory decisions are being made.
- KwaZulu-Natal – This province in South Africa is specifically significant as it houses Gold Circle's operations and is where the KZNERA, the regulatory authority involved, is based.
- Western Cape – HRE is based in the Western Cape, and this province is also mentioned as part of HRE’s operational geography.
Industry
- Gambling and Horse Racing – The article involves an acquisition in the horse racing and gambling sector, specifically focusing on racecourse operators and totalisators in South Africa.
- Regulatory Affairs – This industry is relevant as the pending acquisition requires approval from the KwaZulu-Natal Economic Regulatory Authority, a significant regulatory body overseeing legal gambling activities.
Financials
- 5% – Involvement threshold for acquisitions as outlined by the KZNERA in the approval process.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Gold Circle (Pty) Ltd | Target Company | Company | A racecourse operator in KwaZulu-Natal, owning leases of Greyville and Scottsville Racecourses. |
| Hollywood Racing Enterprises (Pty) Ltd | Bidding Company | Company | A racecourse operator and totalisator based in the Western Cape, wholly owned by Hollywood Sportsbook Holdings. |
| KwaZulu-Natal Economic Regulatory Authority (KZNERA) | Regulatory Body | Government | Regulator overseeing gambling in KwaZulu-Natal, responsible for approving the acquisition. |
| Competition Commission of South Africa (CCSA) | Approving Body | Government | Government agency that has provided conditional approval for the acquisition pending regulatory processes. |
| eThekwini Municipality | Property Lessor | Government | Maintains leasehold rights of Gold Circle at Greyville Racecourse, supporting the transaction with continuous lease arrangement. |
| Hollywood Sportsbook Holdings Proprietary Limited | Parent Company | Company | Parent company of Hollywood Racing Enterprises. |