Is a Big Casino Footprint in a Tiny Principality a Good or a Bad Bet?

Is a Big Casino Footprint in a Tiny Principality a Good or a Bad Bet?
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Is a Big Casino Footprint in a Tiny Principality a Good or a Bad Bet?

Is a Big Casino Footprint in a Tiny Principality a Good or a Bad Bet?

VADUZ, Liechtenstein – It was a dull Tuesday night in an industrial district in northern Liechtenstein, but that didn’t stop a steady stream of car drivers carrying a series of international plaques.

Their destination: a squat gray building with a sober blue and red neon sign reading “Grand Casino”.

Ronald Grimm, a 59-year-old Austrian who wears a silver ring on his left ear and lives in Switzerland, says he visits the Grand Casino, one of the many mostly nondescript gambling establishments along the borders from Liechtenstein whenever he can to play slots.

“I’m too old for nightclubs, I’m not used to bars, so where do I go?” At the casino, ”he said. The Grand Casino, which opened in 2019 and has 292 slot machines and 29 table games spread over three floors, is his favorite, a place he says he feels more likely to win. “I like the atmosphere,” he says.

Covering approximately 62 square miles, Liechtenstein is one of the smallest countries in the world. Not even 40,000 people live there.

But just four years after opening its first casino, Liechtenstein – a tiny principality wedged between Switzerland and Austria that’s best known for its private banking and former tax haven status – now has more casinos per capita. as Monaco, Macau or Clark County, Nevada, which is home to Las Vegas.

In recent years, Liechtenstein has opened five casinos – aimed primarily at attracting players from neighboring countries – and there are plans to open five more. Proliferation worries some in a country where gambling was largely illegal until 2010.

Christian Frommelt, director of the Liechtenstein Institute, an independent research organization, said casinos would likely remain a divisive issue. “It is rare to have a debate of this magnitude in Liechtenstein and for an issue to be so politicized,” he said.

He said the casinos pitted the rural country’s conservative values, rooted in Catholicism, against its liberal economic values, which have made Liechtenstein one of the world’s major financial centers.

“Casinos create a conflict between these two worlds,” he said.

Unlike their glitzy cousins ​​in Las Vegas or Macau, Liechtenstein casinos are small businesses. There are no sprawling gaming complexes with fireworks or a reputation for never sleeping – no, these casinos are more focused on slots and tables. And because players are allowed to light up while playing, they are also smoky.

The gambling boom in Liechtenstein dates back to 2017, with the opening of two casinos that year. Three more followed soon after, with two more expected to open by the end of this year.

The casinos are mainly run by foreign operators: two by Casinos Austria International and two by Novomatic, an Austrian gambling company and slot machine maker that has been implicated in a corruption scandal in its home country. . The fifth casino, and the majority of the others planned, will also be managed by foreigners.

Thomas Gstöhl, who heads a gambling oversight division at the Bureau of Economic Affairs, said the rush to casinos surprised everyone. “No one would have thought that in Liechtenstein five or more casinos could open,” he said.

Mr Gstöhl, whose casino licensing division, said experts estimated the country’s market to be relatively small, with no more than two applications expected.

One of the reasons the gaming industry took root in little Liechtenstein is its free market ethic. (Neighboring Switzerland and Austria, on the other hand, limit the number of casinos they allow.)

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The tax system is another: Liechtenstein levies rates of 17.5% to 40% on gambling income, depending on the income of a casino. In Austria the rate is 30 percent, and in Switzerland it starts at 40 percent and goes up to 80 percent.

Much of the income of Lichtenstein casinos comes from foreign players. Official statistics show that last year, not even a third of the estimated 400,000 visits were made by people living in the country.

Thomas Pirron, the manager of Casino Schaanwald, near the Austrian border, said the majority of visitors to his casino are from Austria. Many, he said, are drawn to the range of slots on offer, but others to the relative privacy that cross-border travel allows.

“People are moving further away from their homes because they don’t want their neighbor to see their car in front of the casino,” said Pirron. “In the minds of people, the casino is always lousy.”

Opposition to the Liechtenstein casino industry has grown with each opening. And the increased attention has made the industry nervous. He says the market will eventually self-regulate and the number of casinos will most likely decrease to four.

But for some government officials, it might not happen soon enough. Liechtenstein’s Deputy Prime Minister Sabine Monauni told a local newspaper that now is the time for policymakers to take action “so that we don’t become Las Vegas”.

Indeed, the government recently announced adjustments to the operating conditions of the gaming industry – which will come into effect in 2022 – making the operation of casinos more expensive and hitting smaller ones harder.

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Many in Liechtenstein are also concerned that the casino boom will negatively affect the country’s reputation.

Dr Frommelt, of the Liechtenstein Institute, said the country has transformed its financial industry in recent years in an attempt to distance itself from its past as a tax haven, which has been marred by a series of scandals. Many opponents of casinos fear they may be used for money laundering, he said, even though government officials say gambling is Liechtenstein’s most regulated industry.

Critics have also pointed to Liechtenstein’s willingness to welcome players who have been banned from casinos in neighboring countries as a possible ethical issue.

Take, for example, Josef Uenes, who recently drove about 40 minutes from his home near the city of St. Gallen, Switzerland, to play the slots at the Grand Casino. He said he went to Liechtenstein for a very simple reason: “I am banned from casinos in Switzerland,” he said.

Swiss casinos, like their Liechtenstein counterparts, are required to ban casinos deemed to be gambling dependent or which regularly play beyond their means. But lists of banned players are not currently traded across borders.

Mr Uenes, a seller of household appliances, said he had actually blacklisted his own name in Switzerland, noting that Swiss casinos were “too close to home”.

So every now and then he makes the trip to Liechtenstein to play. Once, he said, he won about 32,000 Swiss francs, or about $ 35,000, at one of the principality’s casinos. “I love the adrenaline rush,” he said.

But, this time, things did not go as planned, and he released 1,800 francs in 90 minutes.

“The evening was not a success,” Mr. Uenes said with a laugh.

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