Swiss casinos hit by euro crisis

Ticino may not be Las Vegas, but it does have three casinos spread across just 2,800km² (from north to south, Locarno, Lugano and Mendrisio) as well as the largest casino in Europe situated at Campione d’Italia, an Italian enclave within the Swiss canton. The reason for this is Ticino’s proximity to Italy, which only has four similar casinos across the whole of the country. Around 80 to 90 per cent of customers come from just over the border.
 
The situation is to the benefit of the federal government as casinos are obliged to pay part of their profits – on average around 50 per cent – to the state.
 
For example, us$ 934 million in gross gaming revenue (the difference between the total amounts wagered minus the winnings returned to players) was generated by Switzerland’s 19 casinos in 2010, of which us$ 413 million went to the old age and survivors’ insurance and another us$ 67.2 million to the cantons for cultural and social projects. In total, Ticino casinos earned us$ 203.8 million, or more than 20 per cent of the total.

Investments and future

“The worst move would be to cut our services to clients. But we will still have to guarantee the best possible quality, including undergoing an internal reorganisation, to make sure that people don’t stop coming to the Casino of Lugano. And we are hoping for an upswing in the economy,” he said.
 
The casino has made investments aimed at a “medium to high purchasing power profile” such as upgrading the restaurant and slot machines and putting in a new lounge and nightclub.
 
Hellrich says that for now the Admiral Casino is reviewing procedures. But he adds: “if the strong franc doesn’t ease we’ll also have to make staff cuts”. Another measure, says Thonhauser, would be a renegotiation of the “exorbitant” casino revenue share paid to the federal government by category A establishments - that have no limits on jackpots and numbers of machines (56 % for Lugano in 2010).
 
But the government rebuffed a request by a Ticinese parliamentarian earlier this month for a change in the share paid, saying that the proportion took into account the general economic situation and average casino profitability last year, which was around 15 %.
 
As to whether the Ticino casinos should join forces, Thonhauser is not against the idea but says the establishments are all very different: being either in different categories or, in Campione’s case, subject to Italian law. “We can’t predict the situation for everyone but it’s realistic to assume that casinos will have to reduce their costs and investments if the exchange rate stays as it is,” said Hellrich.