Casinos, one-arm bandits, coming to cash-strapped French cities

Groupe Partouche SA

22/01/2016 16:08

By Jean-Francois Rosnoblet 
    MARSEILLE, France, Jan 22 (Reuters) - French casino 
operators are seeking to expand beyond their historic hunting 
grounds of chic holiday resorts in search of younger customers. 
    An industry that has thrived despite strict regulation and a 
century-old ban in the capital Paris is now eyeing big urban 
centres where it was once unwelcome.  
    With cash-strapped local governments looking for more 
revenue, the tax jackpots casinos can generate are looking 
increasingly attractive. 
    That is helping them get a foothold outside of the resort 
and health spa towns, such as Deauville on France's northern 
coast, to which they have been largely confined since casino 
gambling was legalised in 1907.   
    In a policy U-turn, the mayor of Marseille, Jean-Claude 
Gaudin, has just opened the way for a casino operation in the 
Mediterranean port city of more than 800,000 people, where one 
in four resident lives below the poverty line. 
    Gaudin announced earlier this week that a public tender was 
to be launched to license a casino operator in a sun-soaked city 
that more often makes the headlines with news of shootouts among 
rival druglords. 
    "I've never in my entire life played in a casino, but I can 
understand people like it," Gaudin conceded. 
    As France, like the rest of Europe, strives to keep a lid on 
public overspending, the drive to cut deficits is putting local 
government funding under increasing pressure and boosting the 
attractiveness of cash-cow casinos. 
    According to the casino industry federation, taxes paid by 
casinos, mostly levies on "one-arm bandits" and other types of 
coin-slot machines, provide 30 percent of the city budget in 
Deauville and up to 80 percent of local funds on other places. 
    Now that the casino business as a whole is back in profit 
for the first time since 2008, the potential tax take for 
stretched local governments is even greater. For the first time 
in seven years, the net revenues of France's 201 casinos rose in 
2015, growing 2.2 percent to 2.2 billion euros. 
    "France is the leading country in Europe for the number of 
casinos and the turnover figure, ahead of England," Laurent 
Lassiaz, chairman of Casino group JOA, told Reuters. 
    More than half of the space at JOA's 22 casinos was now 
devoted to non-gambling activity too, he said, adding that 
diversification was vital. "The goal is to generate turnover and 
profitability from the host of activities with a clientele that 
sees casinos more as leisure centres." 
    Partouche  PARP.PA , the country's largest casino group, has 
started building an open air casino in the historic shipbuilding 
city of La Ciotat, not far from Marseille, where most of a vast 
outdoor space will be filled with slot machines. 
    All of the large casino groups are looking to get in on the 
act in Marseille itself, where mayor Gaudin's change of heart is 
partly inspired by studies showing a new casino could create 500 
jobs and contribute 10 million euros per year to the city's 
public finances. 
    The last bastion is Paris. No casinos are allowed inside the 
capital or anywhere within a radius of 100 km under a law dating 
back to 1907. 
    Unlike many other cities, the capital is less in need of an 
extra revenue stream given the vast sources that already exist 
in the form of local business taxes and the spoils of being one 
of the world's biggest tourist attractions. 
    If Paris authorities shun a 2015 report recommending that 
casinos be legalised, casino groups could enter the capital via 
private gambling clubs, of which there are just three. 
    The idea of expanding that activity along models that have 
thrived in London, is now being actively examined, says JOA's  
Lassiaz.        
 
 (Writing by Brian Love; Editing by Andrew Callus and Tom 
Heneghan) 
 ((brian.love@thomsonreuters.com; +33 1 4949 5363; Reuters 
Messaging: brian.love.thomsonreuters.com@reuters.net)) 
 
Keywords: FRANCE CASINOS/