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Despite achieving encouraging growth across select markets in eastern Europe and the UK, the European casino industry still faces numerous hurdles as it seeks to return to pre-recession levels, writes James Walker.
Challenges and opportunities: ECA report sets the scene for gaming in 2015
A EUROPE
lthough gaming markets across Europe continue to readjust in the wake of the biggest economic downturn since the end of the Second World War, the industry still has a long way to go on its journey to recovery, new data from the European Casino Association (ECA) indicates. Released in time for this year’s ICE exhibition in London, when the spotlight shines brightly on Europe’s casino, gaming and wider out-of-home leisure industries, the ECA’s 2014 European Casino Industry Report points to stuttering growth across the region’s major markets. “When we compare the 2013 revenues of the 25 ECA member countries on a year-by-year basis, we see
that only eight countries have shown an increase,” said Ron Goudsmit, chairman of the trade association, in the report’s keynote. “These increases vary from a modest 1.9 per cent in Estonia to a leap of 75.9 per cent in Hungary, and are often explained by structural changes in the respective markets.” The other six countries that saw improvements in their results were Latvia, Romania, Lithuania, Slovakia, the UK and Poland, with a rise of 4.8 per cent, 5.1 per cent, 7.4 per cent, 10 per cent, 10.2 per cent and 18.2 per cent, respectively. Like Hungary, Poland has been benefiting from the reduction in street machines, which should be banned altogether by the end of 2015, the report stated. In the UK, the growth
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of 10.2 per cent was mostly realised by one new casino and the table games in London casinos, especially American roulette followed by blackjack. In Latvia, Romania, Lithuania and Slovakia the rise in overall results was mainly due to slot machines. “Unfortunately, with 17 countries showing a decrease in revenues, the European casino industry is not out of the woods, yet,” Goudsmit added. “The largest drop in revenues happened in Greece with another -9.7 per cent, causing a total drop in revenues of -52 per cent compared to 2009. Other countries that were severely hit include Italy, Romania, Slovenia and the Netherlands, with results falling between -7.1 per cent in Italy, to -6.4 per cent in the Netherlands.
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“Compared to previous years, the decrease in Italy was less severe thanks to improved results in table games. The smallest decreases happened in Spain with -1 per cent, and Switzerland with -1.7 per cent.” According to the report, common factors for the decline in revenues in the European casino industry since 2008 include the recession, stricter regulations, the introduction of smoking bans, ongoing competition from illegal online operators and from street machines, arcades and video lottery terminals. “Last but not least, bottom lines of land-based casino operators throughout Europe are burdened by heavy gaming taxes, the levels of which date back to the days when the gambling landscape looked entirely different,” Goudsmit said. With the global gaming industry set to descend upon London for ICE Totally Gaming in the first week of February, the ECA report is likely to be a key talking point among delegates at the show. And although stakeholders would certainly have welcomed more positive industry data as they prepare to head to the sprawling ExCeL centre this year, the opportunities for manufacturers and suppliers of casino equipment are brought into focus, as operators look to refine their current offering in the face of increased cross-sector competition. “On the upside, we see a growing interest among European operators to attract Asian customers who come to Europe for business or tourism,” Goudsmit added. “It is an opportunity to make use of all of the wonderful locations spanning Europe, which are rich with beautiful, historic sites and which make this continent unique; to experience the local hospitality and the many different cultures; to get a taste of the original local flavour, something that cannot be found anywhere else.”