An attempt was made to determine the relationship between the revenue made in sport betting within South Africa and the country`s gross domestic product. The aim was to determine whether sport betting is a significant contributor gross domestic product comparing to other GDP contributors. Sport betting is deemed to be addictive and not good for public, however, it has been growing dramatically for the past few decades and its involvement in economic activities has been noticeable. The OLS method was used to generate the regression results and autocorrelation and heteroskedasticity were carried out. The analysis and interpretation of results indicated sport betting is not a significant contributor to GDP but has a positive relationship with GDP.



Sport is no longer an activity that people engage in just for the sake of passing time but it has evolved to be a means of living, competitive business and professional career industry. There are different literatures that have confirmed the view. “Sport is no longer only seen as a relaxing way to exert energy and interact with friends and families but it is a universal language that can bring nations together, educate individuals, entertain millions and in the past decade a business that can generate billions. Sport has grown into a multi-dollar industry that has generated millions for players, sponsors and sport partnerships” (Wyk, 2008). A proof that sport has evolved over time into a multi-billion dollar activity, can be seen through an example of the prize money being put in to the game.

An early Wimbledon competition, a prestigious tennis competition, which was played in 1877 and won by Spencer Gore, had prize money of $18 for the men category. In 2010, men and women champions, Roger Federer and Serena Williams, respectively, took home a staggering amount of $2.1 million each. This did not include endorsement deals and television revenues (Gittings, 2010). Another prize evolution in sport is being provided through looking at the 1860 first British Golf Open Championship. The Open as it is fondly known, its first prize was a mere a red leather belt for a champion. However, more than 100 years down the line that had changed for the better, as the red leather belt was replaced by a claret jug accompanied by huge prize money of $1.8 million which was won by Zach Johnson in 2015(Sandritter, 2015). Over the years, more and more people have been getting interested and attracted to sport. This means that more money is being injected into sport. The evolution of sport has been realised throough commercialisation. Commercialisation led to an

increase  or  created  more  opportunities   for  different   stakeholders   such   as   professions

(players), media outlets, merchandisers, and sport venues. Commercialisation assigned a value to sport as it transformed completely from being considered as a past time active into a wealth generating avenue and a multi-billion dollar business. “In the past two decades, sport has moved from being a pastime to a business as a result of the process of commercialisation, which has led sport managers and organisations to become concerned with business principles. This commercialisation process has led sport organisations to be described as ‘business-like’ as they become market oriented, pursue operational strategies that maximise profit or revenue, and become responsive to the needs of customers” (Robinson, 2008).

“Commercialisation is ‘the process of transforming ideas, knowledge and inventions into greater wealth for individuals, businesses and/or society at large’. Commercialisation is a subset of the broader process of innovation. It is driven by market and profit motives, with firms and others seeking to gain a positive return on investment in research, licensing, product development, and marketing, including through the creation of competitive niche markets” (Government, 2003). Indeed, sport has envolved to be one of the most money- spinning entertainment businesses. It has all the possibilities to generate billions dollars on a daily basis for all the state holders involved. Given the above information, one can gather that sport commercialization is a process of generating income through handling the business aspect of sport. Robinson (2008), deduced that there are four fundamental factor drivers of sport commercialization namely sport management, spectating, level of technology, and the rise of competition.

The magnitude of sport commercialization is understood when looking at the Soccer FIFA World Cup competition. This is the biggest sport competition in the globe and since its inception it has been generating billion dollars for the host countries, soccer clubs, FIFA (governing body), players and their clubs. Economies of host countries and their

infrastructures are left enhanced after the tournament which holds every after four years. Sources of the FIFA World Cup are reported to be ranging from television broadcasting rights, licensing rights, marketing rights, hospitality rights, other event-related revenue and other avenues.

(Statistica, 2018)

Figure 1.2 (in $ million)

1. TV Broadcasting Rights$337.81m$717.98m$742.64m
2. Licensing Rights$43.65m$26.10m$54.23m
3. Marketing Rights$163.62m$342.94m$465.08m
4. Hospitality Rights$53.36m$40.0m$110.64m
5. Other event-related revenue$118.83m$52.22m$537.37m

These two above figures are showing the trends of sources of income for Federation Internationale de Football Association (FIFA) from 2003 to 2017. Figure 1.1 shows sources of income measured in US Dollar million for fifteen years (2003 -2017) not considering with competition is taking place. Figure 1.2 has narrowed down the results to focus more on the trends during the world cup competition years. Television broadcasting rights is the leading source as it increased from $337.81 million, in 2016, to $717.98 million, in 2010. Also there was increase in the source between 2010 and 2014, from $717.98 million to $742.64, respectively. The second most contributing avenue is the marketing rights that indicate a constant increase during these three world cup years. The other three sources which are licensing rights, hospitality rights, and other event-related revenue decreased in 2010 when the competition was held in South Africa, Africa for the first time in history. This is evidence that stakeholders involved on these sources did not value the competition as much they did in German in 2006, and these sources contributed much when the competition was held in Brazil in 2014.