$6B+ windfall expected

Greece: Concession to develop multi-billion Elliniko resort now signed; Hard Rock allegedly to enter as majority partner

A rendering of the Ellinikon casino and resort.
2022-06-13
Reading time 1:53 min

Greece might see a EUR 6 billion ($6.2 billion) windfall from the proposed Elliniko resort casino now that the concession agreement for the license to operate the property has been finalized. The deal was signed on Thursday, marking the beginning of greenfield investments in the Greek gaming market, with a consortium backed by Greek construction giant GEK TERNA winning the permit.

The investment will start from scratch, reports Business Daily, and will create a premium tourist spot, expected to offer employment to thousands of people, yield significant revenues to the public sector, and add value to Greece’s brand. 

Mohegan Gaming & Entertainment won the bid to build the complex in November 2019 but then pulled out of the deal. The IRC Athens consortium, with GEK TERNA as its main shareholder, has secured the license for the next 30 years at a price of EUR 150 million ($156 million).

The consortium will spend at least another EUR 950 million ($991 million) on the construction of a casino, a hotel, a conference center and a sports facility. GEK TERNA will proceed immediately with the submission of a request to the Gaming Supervision and Control Committee for the expansion of the consortium. 

Hard Rock would also be a part of the investment, as it has been reported it will acquire 51% of the joint venture, according to the aforementioned source and news outlet ypodomes.com, while GEK TERNA will keep 49%. The construction sector of the Greek company will undertake the building of 100% of the new facilities. 

The four criteria of the technical evaluation for the tender of the casino license requirements included a five-star hotel; covering at least 60,000 sq.m with 200 beds; a conference center of at least 12,000 square meters; a sports center hosting at least 3,000 spectators; and a casino that should be larger than 12,000 square meters and up to 15,000 square meters, with 120 tables and 1,200 gaming machines. 

The budgetary benefit is expected to exceed EUR 200 million ($208 million) every year, and a total of EUR 6 billion ($6.2 billion) for 30 years; 3 billion ($3.1 billion) of which will come from the casino’s gross revenue tax, 800 million ($835 million) from income tax, 500 million ($522 million) from VAT, 600 million ($626 million) from fees to municipalities, and 1.1 billion ($1.14 billion)  from social security contributions.

The revenues of Lamda Development as the concessionaire of the land will not be negligible. The contract between the two sides provides for the consortium to pay EUR 15 million ($15.6 million) as a minimum annual fee or 5% of the annual turnover, whichever is higher. 

The next step is the ratification of the contract by Parliament and the issuance of building permits by early 2023. The construction work is set to take at least three years.

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