Inside Asian Gaming

43 International Briefs EC Against Gambling Protectionism The European Commission, the executive body of the EU, called on the governments of Denmark, Finland and Hungary to change laws that barred foreign gambling firms fromdoing business in their coun- tries.The call came after a number of gambling companies, including Britain’s Ladbrokes, filed complaints with the commission. The panel said the three countries could not claim to be protect- ing consumers from gambling if they also encouraged them to play state lotteries that paid proceeds to their governments. The trio of nations had effectively been restricting foreign gambling companies by imposing requirements for state concession and making it difficult to obtain licenses. According to the commission, the rules set by Denmark, Finland and Hungary in particular“have not been shown to be necessary,pro- portionate and non-discriminatory.” Those countries now have two months to respond to the charges or they will be taken to court The European Commission had put Italy, Germany, Hungary, the Netherlands, Sweden, Denmark and Finland on notice in April 2006 for allowing state lotteries to offer online sports betting,while barring rivals from the business. Turkey Bans Web Gambling The Turkish government has passed a law forbidding unlicensed do- mestic or foreign companies from offering online gambling to the country’s citizens. As a strengthening of existing law, which already has established that only government-sponsored Spor Toto is allowed to offer sports betting, the new law represents a two-pronged attack aimed specifi- cally at e-gambling and imposes fines and imprisonment up to five years on anyone operating, enabling access to or even promoting their Web sites. The law follows legislation titled the “Draft Law on Preventing Crimes Committed on the Internet,” which when passed will complete a fencing-off of the predominantly Muslim nation from Web gambling. The Turkish government has grown increasingly alarmed by the growth of unlicensed betting sites, mainly in the southeast of the country,which reportedly have partnered with land-based bookmak- ers and bookmakers’agents in a vast network of distributors and sub- distributors. Reports that surfaced in January of a young man who committed suicide as a result of his gambling losses turned up the pressure on government to crack down. Web gambling in Turkey is estimated at US$1 billion annually.Race betting alone accounts for about $400mil- lion. It is believed that some 400,000 Turks gamble on foreign sites. Austria-based Bwin was one of the first operators to announce it was withdrawing from the Turkish market as a result of the new law. Turkish bettors contributed upwards of €20 million euros to the company’s gross revenues, or about 6 percent of its business. Camelot’s Proposes Global Lottery National Lottery operator Camelot has unveiled plans for a worldwide draw that would outstrip EuroMillions in scope and create more than 100 millionaires a month. Camelot’s proposal envisions individual 42 numbered balls drawn in different countries and a final winning ball picked during a live global television broadcast.The plan is part of the consortium’s bid to retain the National Lottery license, which it has held since the lottery’s inception 13 years ago. The new license, which will commence in 2009 and run 10 years, has drawn only one other bidder, Indian conglomerate Sugal & Dam- ani, which operates the subcontinent’s largest lottery. Several high- profile groups, including BSkyB, Richard Branson, Ladbrokes and Greek lottery giant Intralot, had expressed interest but declined to challenge Camelot with formal bids. Camelot, a joint venture of the Royal Mail, De La Rue, Cadbury Schweppes,Thales and Japan’s Fujitsu, has two partners in its £19 mil- lion bid: IBM and GTECH, the U.S.-based lottery giant now owned by Italy’s Lottomatica. The preferred bidder will be announced in June and the license awarded in August. Stardust a Memory The Stardust casino-hotel on the Las Vegas Strip was imploded in mid-March in a hail of fireworks to make way for Boyd Gaming Corp’s US$4.4 billion Echelon mega resort. The casino opened July 2, 1958, billing itself as the world’s largest resort hotel with 1,032 rooms. It was credited with being Las Vegas’ first mass-market casino, thanks to cheap rates and loss-leading food and drinks. Bob Boughner, Echelon Resorts’ chief executive, said while the Stardust was a favourite of the nostalgia crowd, it was missing out on younger patrons and those who come to Las Vegas for conventions. The Echelon is to open in late 2010 with more than 5,000 hotel rooms, a production theatre, concert venue, shopping mall and more than 1 million sq ft of meeting space. UK Budget Disappointments During his budget speech on March 21, UK Finance Minister Gordon Brown announced higher taxes on large casinos and failed to offer measures to entice Internet gambling firms to the country. Casino operators were dealt a blow after Mr Brown scrapped the lowest tax rate for the smallest casinos and created a new,higher,50% band for the most profitable ones. Leisure firm Rank Group warned that the changes would wipe 20% off the annual profits of its casinos. It said profits of its Grosvenor Casinos, which brought in 39.5 million pounds (US$77.31 million) in 2006, would fall by 8 million pounds a year as a result of the higher taxes. The move also means firms hoping to win the right to run any of Britain’s planned new wave of 17 Las Vegas-style casinos, includ- ing one super casino, will have to reconsider their investments.Tobin Prior, of Kerzner International, refused to commit the company to bid- ding to run the super casino, which was expected to be in Manches- ter, after Mr Brown announced plans to impose a 50% tax on profits from the complex. “I’m still assessing the impact,” said Mr Prior.“We were having to make assumptions about what the tax would be, but there was no reason for anyone to believe that it was going to be this high.” The company, which is run by the controversial South African tycoon Sol Kerzner, has been associated with the Manchester bid after being awarded“preferred bidder” status by the council in 2004. Meanwhile, Internet gambling firms looking to locate back to Britain from tax havens such as Gibraltar and Cyprus were dismayed after Mr Brown set the Remote Gaming Duty in line with land-based bookmakers and bingo firms at 15%. Some had predicted it would be as low as 2-3%. “The Remote Gaming Duty has been set breathtakingly high, it will do nothing to attract the existing offshore industry onshore and it may indeed have the contrary effect,” said BDO Stoy Hayward tax principal Martin Dane. “With the additional VAT and corporation tax for most companies, it would be almost impossible for a UK-based operation to compete with offshore businesses, especially those located in other EU juris- dictions,” said Remote Gambling Association chairman John Coates. “This decision means that the UK has effectively turned its back on the industry,”he added. Jackpot Below The Sands Casino Hotel in Atlantic City, New Jersey, was closed last November after 30 years and will be torn down later this year to make way for a new gambling hall. When workers began re- moving the 2,350 slot machines for use at other casinos owned by the Sands’ parent company, they expected to find a bit of cash. However, US$17,193.34 was a bit more than they had expected. The money belongs to Pinnacle Entertainment, the Las Vegas com- pany that purchased the Sands last year. New Jersey gets eight percent of the money in taxes – the same as it would had the money been won from gamblers. The money was coins, casino tokens and even a US$100 bill. Some change had rolled into small spaces between machines, but most of it was found underneath them. The older-style ma- chines contained buckets inside to hold coins that were deposited, and when they overflowed, sometimes coins rolled underneath. The non-gambling contents of the Sands will be sold off in May, and the building is to be demolished, probably with a huge controlled im- plosion, in the fall. Station Breaks Ground on Aliante Project Bulldozers and graders are readying a 40-acre parcel in North Las Ve- gas for construction of Station Casinos’newest project – the $600 mil- lion Aliante Station hotel-casino. The project, an equal partnership between Station Casinos and the Greenspun Corp., is expected to be completed in late 2008 or early 2009.When finished, the hotel-casino will provide 1,700 jobs. The location at I-215 and Aliante Parkway is in the midst of the Aliante master-planned community, part of an exploding area of growth in North Las Vegas. The Aliante master-planned community encompasses 1,905 acres of recreational, public use and residential housing. North Las Vegas Mayor Michael Montandon told the Las Vegas Re- view-Journal that gaming revenue, room taxes and job growth from Aliante Station will help the city keep pace with its growing demand for basic services.Three other parcels are zoned for casinos along the stretch of the Beltway that runs through the city. The growing residential area is underserved in terms of entertain- ment, Station Casinos executives said during a ceremonial ground- breaking in February at the site located off I-215 (also known as the Beltway) and Aliante Parkway. “The population here around Aliante Station is just exploding, and when the Beltway gets more finished and we get some more commercial traffic up here, this is one of the best sites in Las Vegas,” said Glenn Christensen, Station Casinos executive vice president and chief financial officer. The first phase will feature a 202-room hotel, a nearly 14,000- square-foot banquet/meeting space, six restaurants and a food court, up to a 700-seat showroom, 16-scree Regal Cinemas movie theatre, a centre bar and an arcade. A parking garage and surface parking will offer 5,000 parking spaces. A future expansion would allow for an additional 400 rooms, a bingo room, bowling centre and Kids Quest child-care facility.