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DATELINE EUROPE october2014
Tough Sell
Crimea casinos may not be as popular as Putin wants
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ussian President Vladimir Crimea,” he said, noting that the Putin has asked the country’s peninsula has “no road connection at parliament to designate the newly all” to the Russian mainland and is far annexed Black Sea peninsula as a from any major city. “gaming zone” where casinos The Kremlin has discussed plans could operate legally. to build a bridge between its new It’s an about-face for Putin, peninsula and the mainland, but that who crusaded against gambling, could take several years—and even calling it a social evil, and who then Crimea remains almost 900 backed legislation that shut down miles from Moscow. What’s more, most of Russia’s casinos and slotGellatly says, prospective investors in machine parlors back in 2009. casinos “are not interested in any The new policy is designed to place that doesn’t have political Russian President make Crimea less reliant on subsi- Vladimir Putin stability.” dies from Moscow. The region is The 2009 ban has restricted casiexpected to run a 55 billion ruble (US$1.5 bilnos to four designated border zones—in Kalinlion) budget deficit this year and may receive ingrad, the Don-Rostov region near the Black Sea some $2.8 billion of emergency subsidies, an ex(site of the sole legal casino in the country, in Azov pense the Russian economy can ill afford. City, about 200 miles northeast of Crimea), the Crimean gambling isn’t likely to produce a Altai region of Central Asia and near Vladivostok on revenue windfall, however. Large-scale casino dethe Pacific coast. velopments need “large, nearby pools of players Russians are avid gamblers, but “Russian high who can travel there,” said Andrew Gellatly, the rollers are more likely to gamble in London or London-based head of global research for GamMonaco than in one of the former Soviet republics,” blingCompliance. “You have nothing like that in Gellatly said.
BARCELONA BOUND
Macau casino tycoon Lawrence Ho
Ho bidding for Spanish casino
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company controlled by Macau casino tycoon Lawrence Ho is bidding for a license to operate a casino near Barcelona as part of Catalonia’s planned BCN World resort complex. MelcoLot, a lottery supplier to mainland China controlled by Ho’s Hong Kong-listed Melco International Development, said a wholly owned subsidiary, Instant Glory Holdings, is a shareholder in a company called BCN Integrated Resorts 2, a 50-50 joint venture with Veremonte España, the investment group promoting BCN World. MelcoLot added that it is now engaged with Veremonte in “the preparation and assessment of detailed development proposals and granting of authorizations.” News reports say at least two other major operators, Hard Rock Cafe International and Caesars Entertainment, have submitted bids for casinos in BCN World in partnership with Veremonte, which is proposing.
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Global Gaming Business OCTOBER 2014
Media reports said both also are partnering with Veremonte, whose plans for BCN World include casinos, hotels, convention facilities, residential housing and entertainment and leisure attractions with a minimum investment from prospective gaming licensees of €300 million (US$403 million).
Bingo Bargain Gala’s 135 clubs for sale ritain’s Gala Coral Group has hired investment banker Lazard to find a buyer for its 135 bingo clubs as the company looks to clear the decks for a £2 billion-plus IPO of its remaining betting and gaming businesses. Gala, the biggest bingo operator in the country, said it has “commenced a process to explore the possibility of a disposal” of the venues. Analysts expect the sale of Gala Bingo, estimated to be worth more than £250 million, will eventually lead to an initial public offering of the company’s dominant bookmaking business. Gala Coral has more than 1,800 betting shops in Britain, although it said it may close some in response to government plans to raise the tax on electronic table game revenue, the mainstay of betting shop revenues nationwide, to 25 percent. Gala Coral became the latest bookmaker to warn that it will be forced to close shops this year. Both William Hill and Ladbrokes have been closing outlets, blaming it on the increase in tax, which will include a 15 percent point-of-consumption levy on online gambling come December. Racing is another weakness. Gala Coral, which is owned by a consortium of U.S. investors and hedge funds, said the profitability of racing in its betting shops “has halved over the last five years and shows no sign of abating.” The group called for a reduction in the horse racing betting levy, which bookmakers pay to help fund the industry. Gala Coral posted an 18 percent jump in total group pre-tax earnings, to £67.2 million in the latest quarter, which the company attributed to the World Cup and a strong online performance. Earnings at the bingo division improved from £6.6 million to £8.2 million.
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