Rural tourism scholarship has greatly expanded over the past two decades. One aspect of rural tourism that is undeveloped in literature is the historical evolution of rural tourism destinations. This paper uses an historical approach and archival documentary sources to examine the evolution of rural tourism under apartheid in one of the former Bantustans of South Africa, namely Transkei. It is shown tourism became a sector of policy interest because of disappointments associated with national government programmes for industrial decentralization. Early tourism promotion centred on leisure tourism around the natural beauty and attractions of Transkei’s coastal areas. With the grant of ‘independence’, however, a new institutional environment emerged which resulted in the Transkei becoming a focus for casino tourism at a time when casino gambling was prohibited in South Africa. The growth of casino tourism was, however, linked to corruption which occurred between South African tourism capital and the leadership of this Bantustan.