BUSINESS

Illegal casinos depriving Greek state of considerable revenues

By Stathis Kousounis

The Greek police launched a campaign at the start of the year aimed at shutting down establishments operating as illegal casinos around the capital, with seizures of video lottery terminals (VLTs) and computers running electronic betting programs accounting for a turnover near equal to that of VLTs and roulette tables at the casinos of Parnitha (Mont Parnes) and Loutraki.

According to market experts, the amount of “unregistered” money generated by illegal casinos is believed to be as high as 150 million euros per year, while the loss of potential revenues for the state is almost twice as high when taking into account staff salaries, revenue tax, social security contributions and all other taxes and levies, such as VAT or contributions toward the Greek National Tourism Organization, which are paid by legitimate casinos.

According to figures released recently by the police, in the first six months of the year officers confiscated 81 roulette wheels and 1,280 electronic betting stations from illegal casinos around Attica. To put this number into perspective, the casinos of Loutraki and Parnitha together have around 70 roulette wheels and 1,500 VLTs.

According to the data, raids across Greece in the January-May period led to the closure of 363 illegal casinos, the seizure of 4,014 VLTs and 1,889 arrests. In 2012, over 1,000 establishments running games of chance were closed down, some 11,000 machines were confiscated and around 5,000 people – owners and patrons – were arrested.

Sources in the casino industry suspect that there are organized crime rings behind the operation of illegal casinos and the supply of unregistered betting machines and games. They suggest that the speed with which confiscated equipment is often replaced and new establishments keep appearing shows that there are close links between the owners of these establishments and the suppliers of betting equipment. They add that equipment such as VLTs also require a certain amount of maintenance and technical support, suggesting an organized supply network.

The effects of the boom in the illegal betting trade on legitimate businesses are seen not just in the drop in profits, but also in employment. It is worth noting that the casinos of Loutraki and Parnitha together employ some 2,600 people.

Meanwhile, in combination with the crisis, the growth of illegal gambling has reduced turnover at the country’s nine casinos by 70 percent between 2007 and the present, and 15 percent in the first six months of this year compared to the same period in 2012.

In contrast to Greece, in Spain, where casinos are seen as major profit-makers, investments of over 25 billion euros are in the pipeline that will combine accommodation, entertainment and casinos, which are expected to bring billions into that country’s cash-dry coffers as well as attract millions of visitors.

The first major investment to this end will be developed on a 150-hectare plot that will host six casinos and hotels with a total of 18,000 rooms on the outskirts of Barcelona. The second unit, dubbed EuroVegas, will be built near Madrid and will encompass 12 resorts with 4- and 5-star hotels, casinos, a conference center, golf courses, shopping malls, theaters etc. Its budget has been estimated at around 9.6 billion euros.

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