European News Round-Up

Building of EuroVegas to Take 10 Years
In 2011, American casino and hotel magnate Sheldon Adelson announced plans to build a EuroVegas in Spain. Both the local governments of Barcelona and Madrid battled it out regarding ways to make the necessary concessions over labor laws and taxation, which would make their city the more attractive venue for gaming company Las Vegas Sands. In September, Adelson announced that it was Madrid that had ultimately won the race to host the €18 billion EuroVegas project. Hours before the announcement, Barcelona announced plans of its own to offer gambling on a grand scale in “Barcelona World,” a large-scale resort that will be made of six casinos and six new hotels.

Since then, more details have emerged regarding the upcoming construction of the new resort in Madrid. The new complex, which will be around half the size of the Las Vegas Strip, will, according to the Minister of Economy and Finance of the Community of Madrid Enrique Ossorio, take 10 years to build and will be completed in 2024. Beginning in December 2013, construction will be undertaken in a three-stage process to create 12 scale hotels with a total of 36,000 rooms, six casinos, golf courses and other entertainment facilities, and will generate more than 250,000 jobs through 2025.

According to Ossorio, the new complex will also make Madrid one of the leading conference centers in Europe and will attract an additional 4.7 million tourists in 2025. It is estimated that tourists visiting Madrid will also double the amount they spend while visiting the city once the new resort is up and running.

In addition, the tax that the casinos will have to pay has been dramatically cut and the government could also lift a smoking ban on casinos in the resort. Spanish tax rates for casinos are higher than in other countries in Europe. However, Mayor of Madrid Ignacio Gonzalez has announced that the gaming tax on casinos will be reduced in Madrid from 45 percent to 10 percent, making it the lowest tax rate on casinos in Spain.

The Netherlands
Government Seeks to End State Monopoly on Casinos
The Dutch government has announced plans to legalize online gambling and sell off the government-run monopoly of casino gambling. The government has previously been adverse to offshore operators offering their services locally. But since early 2010, when a powerful parliamentary committee first recommended the legalization of online poker, there has been a marked change in government policy. Later in the same year, local media announced that the government was looking at ways to liberalize the market. This was confirmed in March 2011 when the state secretary of security and justice outlined proposals to parliament, in which not only the online market would be opened up to offshore operators, but the land-based monopoly on casino gaming would end.

Holland Casino remits its profit to the state, and also pays gaming tax at 29 percent once a month on table games and slot machines revenue. Under current plans announced by the newly elected coalition government, a tax of 29 percent will now be imposed on offshore operators’ gross profits. While the 14 Holland casinos are popular both amongst locals and tourists due to the generally adverse economic conditions in Europe, the casinos reported few visitors numbers in 2011 and only reported modest profits according to Holland Casino’s 2011 Annual Report. While it is yet unclear under what conditions land-based or offshore new licenses will be offered, any new legislation will, in all likelihood, adhere to the principles of Dutch gaming legislation, which is designed to guarantee consumer protection, prevent problem gambling and combat illegal gambling and crime.

Illegal Gambling on the Rise amidst Calls for Reform
Illegal gambling continues to be an issue for Serbia’s growing gaming market. According to a recent report in the Southeast European Times, illegal gambling could amount to €50 million a year. In 2004, the Serbian government passed a gambling act to more closely regulate the market and help eliminate illegal gambling. The law sets stiffer penalties for those found to be operating illegal gambling establishments and created a new gaming board called the Games of Chance Board. However, this new board has proved ineffective as illegal gambling is still on the rise. Today there are an estimated 60,000 illegal slot machines and 1,500 illegal betting parlors in Serbia.

In the face of continued illegal gambling, the government is now seeking ways to more closely regulate the industry. The newly elected government has already put gaming under the control of the tax department and abolished the gambling control board. In addition, government members are now meeting with the Serbian Association of Gaming Operators, Authorized Technicians and Producers of Gaming Equipment (JAKTA) to look at ways to more closely regulate the industry.

While this is not the first time in Serbia that new gaming law has looked likely (similar announcements were made in 2010), for now it looks increasingly possible that gaming could soon face stronger regulation and that the government will initiate a long-awaited crackdown on illegal gaming. According to local industry insiders, should Serbia enact tough new gaming laws, industry revenue could increase by as much as tenfold over the next 10 years.

Offshore Operators Move to Expand into Online Casino Games
Significant developments are on the way in Italy’s gaming market. The casino market in Italy remains underdeveloped with only four licensed casinos located in the country, all of which are located in tourist hotspots. In 2011, the Italian government passed a decree legalizing online casino and poker cash games throughout Italy but banned online slots. In June 2012, the Italian gambling board (Amministrazione Autonoma dei Monopoli di Stato) reversed this decision and announced that online casino games would be permitted from December 2012, allowing offshore operators to enter the market, while those companies already operating in Italy could apply for a license.

A number of operators look set to enter the newly opened online slot market. In November 2012, developer and operator of direct-to-mobile gambling services, Probability, announced that it had been granted a remote gambling license by the Italian gambling board. The company plans to expand its mobile gaming platform into the Italian online slot market, where about 20 million Italians own smartphones. In addition, e-gaming company 32Red, a British company incorporated and based in Gibraltar, also announced plans to launch in the Italian market in 2013. According to the announcement, the company will offer casino, poker and bingo to Italian customers.

In common with online poker, online casino games must adhere to strict rules when it comes to advertising their products, as in October 2012 the Italian Senate passed the Balduzzi Decree, which will introduce restrictions on gambling advertising across all media platforms from Jan. 1, 2013 in order to safeguard minors and the vulnerable. The award of online slot machine licenses looks set to bring growth to the Italian gaming industry, especially with more gaming options available to Italians including cash poker and sports exchange betting, which were approved by ministerial decree in 2012.

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