lympic Entertainment Group has acquired 80% of shares of Casino Polonia for 9 million euros. The rest stays in the hands of Ryszard Sobiesiak - one of the previous owners. The two other owners have left the company. “We have been waiting for a long time to sell the shares to a branch investor”, Sobiesiak reveals in interview for “Rzeczpospolita”.
Casino Polonia owns 5 casinos and 3 amusement arcades in Warsaw, Wroclaw, Szczecin and Gorzow Wielkopolski. Two years ago, the company was on a brink of bankruptcy. It did not have enough means to upgrade its establishments and attract new gamblers. Then talks with OEG started, which quickly were concluded with a preliminary agreement. But the transaction needed the Ministry of Finance permission, which was issued last week.
The ministry's agreement is especially important for OEG because of the regulations on casinos' opening procedures. The gambling act says that one casino can occur for at least 250 thousand citizens, so no more casinos can be opened in Warsaw. But OEG has invested 7 million euros in the biggest Polish casino, that is being built in the Warsaw Hilton Hotel.
To open it, the company will have to close a casino, owned by Casino Polonia, in Metropol Hotel. The Hilton casino is to be launched in the beginning of June. It will cover 1600 square meters, on 3 floors, with 20 gaming tables and 100 machines. 200 employees will be employed there.
OEG wants to modernize the other casinos, purchase state-of-the-art equipment and gear up its establishments with the newest technologies and machines. The company plans to invest about 30 million euros in Polonia casinos within 2 years.
OEG has entered Polish market in a very favourable moment. Last year gambling market was visibly brightened up. Prizes solvency in casinos is very high, the highest from all gambling games. About 80% of money paid by players returns to their pockets. So in companies' purse stays about 1/5 from turnover. In 2005, it was almost us$ 72 million. From these figures, casinos have to pay 45% of tax.
So it is no wonder that as much as 11 out 27 casinos in Poland did not break even. Profitability amounted 1,2% then. In comparison, in 2004 it was 2,5 %. The problems troubling previous Casino Polonia owners are known to the entire branch. The company had even to close two establishments in Gdynia and Karpacz. “They were insolvent”, Ryszard Sobiesiak recalls.
After overtaking the other eight Polonia establishments, OEG has 103 casinos in 7 central-eastern European countries. The company is growing rapidly. Last year it had 106,7 million euros of income, about 90% more than in 2005 year. In the end of 2006, the network amounted 79 establishments compared to 33 in the end of 2005.
Five companies currently operate casinos in Poland: Casino Centrum, Casinos Poland, Casino Polonia Wrocław, Orbis Casino and Zjednoczone Przedsiębiorstwa Rozrywkowe. The bigger ones - Casinos Poland, Orbis Casino and Casino Polonia -own about 90% of the market.