Casinos Austria Expands to Italy
Loss-making Casinos Austria hopes for a new and lucrative market in Italy.
The sales of Casinos Austria on the domestic market have declined in recent years. Owing to an ECJ ruling, the casino monopoly was abolished in Austria. In addition, gambling is made increasingly via the Internet. The year 2010 should therefore bring losses, although the last quarter, "stabilized" again. In the first half year, the group suffered a loss of € 14.4m. The position is therefore unfavorable for Casinos Austria from the very beginning.
Casinos Austria hopes to find a new, profitable growth market in Italy, because this country is probably the "most dynamic market in Europe," according to Paul Herzfeld, CEO of Casinos Austria International. In Italy, the focus will be on the operation of slot machines. The automatic operation promises lower personnel costs than the conventional casino operation, allowing margins of about 5% instead of the usual 2.5%.
The first "mini-casino" has already been opened last week. Ten other locations will follow in 2011, with an investment estimated at about € 40m. Herzfeld believes that real operation will not start until mid-year because government regulations follow a very "tough" course. Further expansion potentials are not currently in sight, according to Herzfeld.