Conduct a Feasibility Study - Mpumalanga -

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3.1 BACKGROUND Regulated gambling in South Africa was extended in 1994, from horse racing to include casinos, bingo and the national lottery. Since the allocation of the first casino license in March 1997 and the launching of the national lottery in 2000, much debate has been generated on the impact of legalised gambling in South Africa. Four casino licences were allocated to the Mpumalanga Province for possible issuing to casino companies. Three of these licences were issued to Graceland Hotel, Casino and Country Club (Secunda); Emnotweni Casino (Mbombela) and The Ridge Casino (Emalahleni). One licence has not yet been issued by the Mpumalanga Economic Regulator (MER). Given the evolving economic environment, changing punter preferences, and technological advancements (including the growth of online betting), the Mpumalanga Economic Regulator (MER) seeks to commission a feasibility study to assess the viability, desirability, and potential socio-economic impact of granting the fourth casino licence. A similar study was last conducted in 2014. However, significant shifts since then, such as population growth, disposable income trends, the rise of online betting warrant a new evidence-based review. 3.2 PURPOSE OF THE STUDY The study aims to provide an objective, evidence-based assessment of the economic, social, and regulatory feasibility of issuing the fourth casino licence within the province. The intention is to determine whether or not it would be feasible to issue a Request for Proposals (“RFP”) for the fourth casino licence, in terms of the Mpumalanga Gambling Act, 1995 (Act No. ). 3.3 RESEARCH OBJECTIVES The study should: • Assess current and projected population demographics and household income patterns. • Determine levels of participation in gambling activities, by district and gambling mode. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 • Evaluate the propensity to gamble and potential market saturation levels. • Estimate the size and potential growth of the provincial and district-level casino market. • Identify potential revenue leakage to casinos in neighbouring provinces and the extent of cross-border spending inflows. • Examine potential economic, employment, and fiscal impacts of introducing an additional casino. • Assess social implications, including risks of gambling addiction and community impact, proposing mitigation strategies. The above calculations should provide an estimate of the gambling (casino) expenditure by district municipality. Specific districts can then be aggregated to estimate the potential size of the casino market in areas without resident casinos. Notes should also be included in the report on Mpumalanga districts adjacent to casinos in other provinces. The latter may result in leakages of casino expenditure from Mpumalanga. The counter argument must also be highlighted, namely casino expenditure from non-Mpumalanga residents. No detailed calculations will be made on the leakage or ‘importation’ of casino expenditure from or to Mpumalanga. 3.4 SCOPE The scope should include: • Market Analysis • Economic Impact Assessment: • Financial Feasibility • Regulatory and Legal Considerations • Social and Community Impact • Operational Feasibility • Risk Assessment The above calculations should provide an estimate of the gambling (casino) expenditure by district municipality. Specific districts can then be aggregated to estimate the potential size of the casino market in areas without resident casinos. Notes should also be included in the report on Mpumalanga districts adjacent to casinos in other provinces. The latter may result in leakages of casino expenditure from Mpumalanga. The counter argument must also be highlighted, namely casino expenditure from non-Mpumalanga residents. No detailed calculations will be made on the leakage or ‘importation’ of casino expenditure from or to Mpumalanga. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 3.5 METHODOLOGY Due to the wide spectrum of socio-economic impact calculations and quantifications to be conducted, various methodologies would have to be applied. This section highlights the research methodologies that would generate the desired output to achieve the objectives as stated above. A large volume of data will have to be collected from stakeholders in the gambling industry in Mpumalanga.. This information will include, inter alia: Gross Gambling Revenue, gambling levies, employment and number of gamblers. The Researcher, must determine a suitable data sources and methodology required for the feasibility assessment Some of the data needs could, however, be met by the database maintained by the MER. The determination of the sample size must take into account cost and time, and include the following: (a) Degree of variability of the survey population. The more heterogeneous the population, the larger the sample size should be. (b) Degree of precision. The greater the precision required, the larger the sample size that is needed. (c) Degree of confidence. (d) The extent of disaggregated analysis. The Researcher shall be required to submit a proposal on how the study will be commissioned, as well as, to submit a price proposal to carry out the study. A pre-engagement session may be held with the Researcher, prior to commencement of the research study. 3.6 TIMEFRAMES The project shall commence immediately after signing of a service level agreement between the MER and the Researcher. The final report must be submitted to the MER within 3 months after commencement of the study, subject to these terms and conditions. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 3.7 NATURE AND FORM OF THE RESULTS 3.7.1 Deliverables The Researcher shall be required to submit a written report in a descriptive manner with supporting statistical analysis. The data in the report shall be capable for graphic exposition and presentation. The report shall be available in hard copy and electronically (MS Word). A data set of the survey results shall also be supplied in SPSS or any statistical package preferred by the MER. A comprehensive PowerPoint presentation of the research results shall also be submitted. The project deliverables would be a full report elaborating on, inter alia, the following aspects: a) Background and objective of the study. b) Methodology applied in the estimates. c) Databases for analysis. d) Gambling and casino expenditure in Mpumalanga. e) Propensity to gamble. f) Size of the Mpumalanga gambling and casino market by selected areas. g) Impact of adjacent non-Mpumalanga casinos. h) Impact of the other modes of gambling on casinos. i) Can Mpumalanga sustain a fourth casino? If so, • provide the parameters of the intended 4th casino in terms of an investment amount (inclusive of the casino itself, ancillary facilities and back-up infrastructure for water and electricity); • provide the parameters of the intended 4th casino in terms of size (for example: would the viability calculations support the development of a stand-alone resort or an addition to an existing development in support of tourism. ); and • provide the business model, including number of sustainable jobs and land-based / online presence (with inter-dependency, if applicable) 3.7.2 Presentations The survey findings and statistical analysis shall be presented to the MER Board. 3.7.3 Progress Reports Progress reports shall be submitted to the MER at regular intervals as agreed upon, indicating the progress with the project as well as any constraints that might be experienced. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 3.7.4 Research Ethics and Intellectual Property The ownership of any intellectual property resulting and relating to this research project shall vest in the MER. 3.7.5 Progress Reports Progress reports shall be submitted to the MER at regular intervals as agreed upon, indicating the progress with the project, as well as any constraints that might be experienced. 3.7.6 Intellectual Property The ownership of any intellectual property resulting and relating to this research project shall vest in the MER. 3.8 Competency and expertise requirements It is essential that the service provider is experienced, suitably qualified and competent to conduct professional research. The service provider may be requested to provide evidence of qualifications and experience in similar research projects. 3.9 Validity of proposal The proposal must be valid for a period of at least ninety (90) days from the due date for submission of all bids. 3.10 Number of proposals Proposals must be submitted as one original tender document with one copy of the entire proposal, including all documents referred to below, as well as a soft copy of the proposal. All submitted proposals will become the property of the MER, and will not be returned. 3.11 Evaluation Criteria 3.11.1 Mandatory Administrative Criteria Bids that do not meet the following criteria will be disqualified and will not be evaluated further (i.e. following documentation required): • Proposal to conduct the research feasibility study for a fourth casino licence in Mpumalanga Province. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 o methodology used by the firm including, but not limited, the approach that will be adopted o Professional affiliation where applicable; o qualifications of team members (Curricula Vitae and certified copies of qualification certificates must be attached); • Certified copy of company registration/close cooperation; • Certified copy of identities documents of directors/ members /partners • A copy of Joint Venture agreement if applicable • Certified copy /Original B-BBEE certificate • Proof of banking details • Complete and signed SBD (Standard bidding document) forms: • SBD 1: Invitation to Bid • SBD 3.3: Pricing Schedule • SBD 4: Bidder’s Disclosure • SBD 6.1: Preference Points Claim Form Bidders must satisfy the mandatory administration criterion in order for them to be evaluated further. Refer to Annexure A • Details of contracts for similar/related work and contact details (Appointment letter, reference letter or contract for each project must be attached); Refer to Annexure B. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 3.12 This tender will be evaluated using a two-stage bidding process. 3.12.1 Functionality; and 3.12.2 The preference point system as prescribed in the Preferential Procurement Policy Framework Act., 2000 (PPPFA). 80 Points representing price and 20 points as per specific goals. Refer to SBD 6.1. Only bidders who meet the minimum requirement in the functionality criterion will be considered for this phase. Functionality Criterion: Technical / Functional Criteria Weightings Technical Proficiency 15 points Company profile to be submitted (in case of a Joint Venture, all companies must submit separate profiles) Bidders Relevant Experience 40 points Provide MER with portfolio of similar research work done • 0 projects – 0 points • 1 project – 5 points • 2 projects – 10 points • 3 projects – 20 points • 4 projects – 30 points • 5 or more projects – 40 points Research approach and methodology 30 points Detailed approach, methodology and process to be adopted. Work plan to be linked to deliverables and outputs. • Approach – 10 points • Methodology – 10 points • Work plan – 10 points Resources Experience 15 points The service provider must submit the CV’s of the project team that will be used in the project and indicate where they will be utilized. The minimum qualifying score for functionality will be 80, Bids scoring less than 80 points on functionality will be set aside and not be evaluated further. Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 FORMULAE FOR PROCUREMENT OF GOODS AND SERVICES POINTS AWARDED FOR PRICE A maximum of 80 or 90 points is allocated for price on the following basis: 80/20 or 90/10 Pt−Pmax Pt−Pmax Ps= 80(1+ ) or Ps= 90(1+ ) Pmax Pmax Where Ps = Points scored for price of tender under consideration Pt = Price of tender under consideration Pmax = Price of highest acceptable tender POINTS AWARDED FOR SPECIFIC GOALS In terms of Regulation 4(2); 5(2); 6(2) and 7(2) of the Preferential Procurement Regulations, preference points must be awarded for specific goals stated in the tender. For the purposes of this tender the tenderer will be allocated points based on the goals stated in table 1 below as may be supported by proof/ documentation stated in the conditions of this tender: Table 1: Specific goals for the tender and points claimed are indicated per the table below. Note to tenderers: The tenderer must indicate how they claim points for each preference point system.) Number of points Number of points claimed (80/20 system) allocated The specific goals allocated points in (To be completed by (80/20 system) terms of this tender the tenderer) (To be completed by the organ of state) 51% owned by black people 3 51% owned by black people who are women 5 51% owned by black people who are youth 8 51% owned by black people with disabilities 4 Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 3.13 Submission details The submission of proposals should be forwarded to the MER’s Office as follows • Closing Date: 30 January 2026 • Closing Time :11H00 • The time and location for opening of the tender offers is 30 January 2026 at 11H00 AM; MER Boardroom. • The physical address for the submission of tender documents is: Mpumalanga Economic Regulator, First Avenue, White River ,1240. • Documents may be obtained from the MER’s website and National Treasury’s e-tender portal. • Proposals must be enclosed in a sealed envelope. • Tenders may only be submitted on the tender documentation that is issued. Bidders must initial each page of the tender document. Emailed and late tenders will not be accepted. Failure to company with these conditions will invalidate your offer. The MER does not bind itself to accept the lowest or any tender, and reserves the right to accept any tender or any part thereof, or not to make an appointment. Any queries regarding this matter can be directed in writing to the Chief Financial Officer, at scm@mer.org.za Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 SBD 1 PART A- INVITATION TO BID YOU ARE HEREBY INVITED TO BID FOR REQUIREMENTS OF THE MPUMALANGA ECONOMIC REGULATOR CLOSING 30 January CLOSING BID NUMBER: MER/T02/2026 DATE: 2026 TIME: 11h00 REQUEST FOR PROPOSAL TO CONDUCT A FEASIBILITY STUDY DESCRIPTION FOR A FOURTH CASINO LICENCE IN MPUMALANGA BID RESPONSE DOCUMENTSPROVINCEMAY BE DEPOSITED IN THE BID BOX SITUATED AT (STREET ADDRESS) MER BUILDING FIRST AVENUE WHITE RIVER 1240 BIDDING PROCEDURE ENQUIRIES MAY BE TECHNICAL ENQUIRIES MAY BE DIRECTED TO DIRECTED TO: CONTACT PERSON Makhosazane Mthethwa CONTACT PERSON Nivard Lubisi TELEPHONE TELEPHONE NUMBER 013 750 8000 NUMBER 013 750 8000 FACSIMILE FACSIMILE NUMBER NUMBER E-MAIL ADDRESS scm@mer.org.za E-MAIL ADDRESS scm@mer.org.za SUPPLIER INFORMATION NAME OF BIDDER POSTAL ADDRESS STREET ADDRESS TELEPHONE NUMBER CODE NUMBER CELLPHONE NUMBER FACSIMILE NUMBER CODE NUMBER E-MAIL ADDRESS VAT REGISTRATION NUMBER SUPPLIER TAX CENTRAL COMPLIANCE STATUS COMPLIANCE SUPPLIER OR SYSTEM PIN: DATABASE No: MAAA 3.13.1.2 ARE YOU A 3.13.1.1 ARE YOU THE FOREIGN ACCREDITED BASED REPRESENTATIVE Yes No SUPPLIER IN SOUTH FOR THE [IF YES, ANSWER AFRICA FOR THE Yes No GOODS THE GOODS /SERVICES QUESTIONNAIRE /SERVICES [IF YES ENCLOSE PROOF] OFFERED? BELOW] OFFERED? Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59 MER/T02/2026 ARE YOU A FOREIGN BASED ARE YOU THE SUPPLIER ACCREDITED FOR THE REPRESENTATIVE IN Yes No GOODS Yes No SOUTH AFRICA FOR /SERVICES THE GOODS /SERVICES /WORKS [IF YES ANSWER PART /WORKS OFFERED? [IF YES ENCLOSE PROOF] OFFERED? B:3 BELOW ] SIGNATURE OF BIDDER .................................... DATE CAPACITY UNDER WHICH THIS BID IS SIGNED (Attach proof of authority to sign this bid; e.g. resolution of directors, etc.) TOTAL BID TOTAL NUMBER OF PRICE (ALL ITEMS OFFERED INCLUSIVE) R................................. BIDDING PROCEDURE ENQUIRIES MAY BE DIRECTED TO: PUBLIC ENTITY MPUMALANGA ECONOMIC REGULATOR CONTACT PERSON REINETH MAMPANE TELEPHONE NUMBER 013 750 8000 E-MAIL ADDRESS scm@mer.org.za Bidder Proposal to conduct a Feasibility Study For A Fourth Casino Licence of 59

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