Lean times for European casinos
These are hard times to be a casino operator in continental Europe and in the Euro zone in particular. While casinos in Singapore and Macau are experiencing boom times, their counterparts in Europe are in the doldrums.
Regulation of the gambling markets in countries such as Italy and France brought an array of different gambling products into the market, land-based and online, and significantly increased choice for punters.
Casino players do not necessarily need to get into their cars to go to the nearest casino if they wish to have a go at roulette or blackjack; they just need to turn on their laptop or their iPad.
Problems for many casino operators started with the introduction of smoking bans in various European countries from 2005 and continued in latter part of the decade with the worsening economic conditions.
Additionally, casinos are taxed heavily; in some jurisdictions they are taxed to death. In some German Lander, casino taxes can cumulatively go as high as 90% (depending on the casino’ revenue). In France the tax scale ranges from 10% for revenues up to EUR58,000 to 80% for revenues over EUR9.4m.
Casino revenue in key Eurozone casino markets (Austria, Belgium, Finland, France, Germany, Greece, Italy, The Netherlands and Spain) decreased by 8.3% in 2008, 10.3% in 2009 and 6.6% in 2010. In some countries casino revenue in the last two years has been in free-fall. Greek casino revenue declined by 15.9% in 2009 and 18% in 2010; in Germany by 13.8% in 2009 and 10% in 2010; and in The Netherlands 14.9% in 2009 and 8.2% in 2010. According to the European Casino Association casino employees in the aforementioned countries went from 45,235 in 2008 to 42,613 by the end of 2010, a drop of 5.8%.
Not long ago, profits coming from casinos funded services in many municipalities in Germany, France and Italy, but lately it is the casinos that have become a burden on municipalities.
What can be done to change this situation? First of all the casino sector needs more liberalisation so to allow casino operators more flexibility in running their business.
It is time to review policies that keep many players away and start thinking about strategies to lure them back.