July 5, 2022 3 min read


Hollywoodbets Bails out Kenilworth Racing from Financial Disaster

The board of directors of Kenilworth Racing (KR), a South African horse racing organizer, declared that the company would receive an approximately $12 million investment by sportsbook Hollywoodbets. The purchase will alleviate KR’s dire financial situation and allow the company to stabilize and maintain its operations.

Kenilworth Racing owns three major horse racing facilities in Cape Town’s metropolitan area. The company recently reported over $1.5 million in losses during the 2022 financial year and warned that they were facing “severe liquidity and cash flow constraints.” The KR board of directors warned that the race tracks would cease operations without an immediate liquidity injection.

The Investment Deals Effectively Mark a Change in Ownership

In response to the company’s dire financial situation, the Board of Kenilworth Racing and its sole shareholder, the Thoroughbred Horseracing Trust, reported several measures to acquire the necessary liquidity to continue operations.

The first is a counter-signed expression of interest (EOI) with private equity, real estate, and equine investor GMB Investments. Upon approval by the regulator, GMB will provide KR with approximately $8 million in working capacity and debt repayments. 

In addition to the normal and customary terms typical of such financing arrangements, GMB will receive an option from KR to subscribe for an equity stake in KR.

KR board of directors

The second cash injection is a counter-signed Memorandum of Understanding with South African sportsbook Hollywoodbets. The operator will purchase all the Thoroughbred Horseracing Trust’s shares for a minimum of $12 million. KR’s management expressed hope that the Hollywoodbets acquisition would secure the future and sustainability of horse racing in the Western Cape:

Hollywoodbets has already shown its commitment to horseracing in South Africa… and remains steadfastly focused on continuing to promote and give back to the sport.

KR board of directors

New Shareholders Will Need to Address KR’s Underlying Problems

The deal with Hollywoodbets could take a significant time to complete, as it needs to be approved by three regulatory bodies. These are The National Horseracing Authority of Southern Africa, The Western Cape Gambling and Racing Board, and The Competition Authorities. If both agreements are successful, Kenilworth Racing will have two shareholders – GMB and Hollywoodbets. Gregory Bortz, GMB’s representative, will likely assume the position of Executive Chairman at KR.

Although the investments will keep the company operating in the short term, it is evident that long-term profitability would require strict reforms. The company’s poor performance was attributed to the unfavorable economic climate and the pandemic. However, employees have also highlighted issues such as poor operational management, a lack of direction, and inefficient communication, which the two new shareholders will need to resolve.

Deyan is an experienced writer, analyst, and seeker of forbidden lore. He has approximate knowledge about many things, which he is always willing to apply when researching and preparing his articles. With a degree in Copy-editing and Proofreading, Deyan is able to ensure that his work writing for GamblingNews is always up to scratch.

Leave a Reply

Your email address will not be published. Required fields are marked *