Observations on the EU Casino Gambling Sector

Casino industries in the EU Member States operate under tax regimes, ownership structures, and regulatory constraints that affect the industries’ size, market power, ability to service customers, and ability to attract financial capital. In many Member States, casinos are granted regional monopoly status with geographic exclusivity granted for particular cities, towns, or thermal areas (i.e. France, Italy, Germany, Portugal, Spain.) In other Member States, there are only a limited number of authorized licenses (Slovenia.) In some Member States, only a single entity is permitted to operate casinos, and that entity is wholly or largely owned by the Member State (i.e. Austria, the Netherlands, Finland, Sweden.) In other Member States, ownership of the casinos is a mix of public sector and private sector entities (i.e. Slovenia, parts of Germany, Italy.) Private sector ownership of casinos can be found in the United Kingdom, Portugal, Spain, France, Malta, Hungary, Estonia, Luxembourg, Belgium, Latvia, Lithuania, the Czech Republic and Slovakia. There are at present no permitted casinos in Ireland, and casinos operate only in that portion of Cyprus not controlled by EU law (Northern Cyprus.)

In those jurisdictions where private ownership of casinos prevail, and even in jurisdictions which have partial or complete ownership by the State, there are typically very high tax rates applied to Gross Gaming Revenues. These high tax rates have the effect of making the Member State effectively a partner as they become the dominant revenue benefactor of such operations. But this financial model also makes it difficult for casino companies to justify significant capital investment at levels that have become common in casino industries elsewhere in the world. Capital investments in such diverse international jurisdictions as Las Vegas, Atlantic City, Connecticut, South Africa, Australia, New Zealand, and Macau, as well as the newly authorized but not-yet-operating industry in Singapore, typically run into the hundreds of millions, if not billions, of Euros. There is nothing yet in the EU that even comes close to this international phenomenon.

MAXIMUM PERCENTAGE TAX RATE ON CASINO GGRs:

• MEMBER STATE: HIGHEST PERCENTAGE TAX RATE ON GGRs (2004)
• AUSTRIA 80% for tables; 48% for EGMs*
• BELGIUM 44% for tables; 50% for EGMs*
• CYPRUS N/A
• CZECH REPUBLIC 31% for tables; 20% for EGMs*
• DENMARK 75%
• ESTONIA 60%
• FINLAND All profits accrue to State
• FRANCE 80%
• GERMANY 92%
• GREECE 33%
• HUNGARY 34.5%
• IRELAND N/A
• ITALY 72%
• LATVIA 25%
• LITHUANIA Unit tax on tables and machines
• LUXEMBOURG
• MALTA 40%
• NETHERLANDS 33.3%
• POLAND 50%
• PORTUGAL 50%
• SLOVAKIA 27%
• SLOVENIA 50%
• SPAIN 61%
• SWEDEN All profits accrue to State
• UNITED KINGDOM 40%

* The acronym EGMs stands for electronic gaming machines, which could be the equivalent of gaming machines, video lottery terminals, or amusement with prize machines.