Durban - Punters looking for a high-risk gamble can, from yesterday, do spread betting in rands through SportsSpread SA, a joint venture between locally listed horse-racing and betting group Phumelela Gaming & Leisure and Ireland-based Worldspreads.
Spread betting is a form of gambling on the outcome of an event where the more accurate the gamble, the more money is won. A bet is made against a spread or index and on whether the outcome will be above or below the spread. However, unlike fixed-odds betting, there is no single stake to limit maximum losses.
Chief operating officer David Attenborough said it was a niche market, 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 1 percent by Worldspreads, but the profit split will be a 50/50 partnership.
Attenborough said the company had spotted a gap in the market with South African customers accessing spread betting through offshore companies such as Global Spreads.
Attenborough said offshore companies were "sucking money out of the country tax-free" but SportsSpread SA, which was licensed by the Gauteng Gambling Board, would keep money in the country and contribute to the tax base.
"This is not our core business, hence the choice of an international partner. The start-up capital was under R500 000 and not a material investment in terms of launching a new product," he said.
SportsSpread SA will offer live and "in-running" prices on major sports events, including horse racing, rugby, soccer, tennis, cricket, golf and Formula 1. It has taken Phumelela two years to develop the product in conjunction with Worldspreads and every new account opened through SportsSpread SA will have to go through the requirements of the Financial Intelligence Centre Act.
The company also plans to introduce financial spread betting where punters can bet on financial indices. While the new National Gambling Act allows for this, provincial legislation needs to be changed to accommodate financial spread betting. Attenborough said some provinces had already initiated the process.
Phumelela closed unchanged at R9.10 on the JSE yesterday, while the leisure and hotels sector gained 0.14 percent.