|
 |
|
||
|
ICEi 2007 promises to be ‘biggest yet’ US Bill seeks to ban online gambling ICIT Cheers new trinity installation Show me the money and the tickets Merkur opens first Bratislava casino IGT launches Asia-Themed Range Holland Casino Starts Party with WMS World of Games ‘UNKONWN’ Claims Unicum
|
Revisiting Poland… Industry veteran Jim Wrethman looks at how Poland’s attitude to the casino industry has changed over the last 20 years and finds that despite much political activity, it is no further forward than when he first set foot there.
In a desperate search for hard currency to bolster their failing economics in the late 1980s, the Communist governments of eastern europe began to flirt with economic activities previously thought to be ideologically unsound. One such activity was gambling. In those years, I was managing director company Cherry foretagen AB and having already extensive operations in Yugoslavia until then a benign regime compared to the Soviet Bloc – we used that as a base to explore possibilities behind the rusting ‘Iron Curtain.’  Negotiations were already taking place in Russia, Romania, Czechoslovakia and the Baltic countries, but the peoples’ Republic of Poland was our first major breakthrough. The communist government had given permission for state entities to dip their toes in the capitalist waters and Orbis, a major hotel operator in Poland, invited us to discuss the possibility of operating casinos in its establishments. Both foreign companies were obliged to agree, in different ways, not to repatriate the full proportion of their profits. In Cherry’s case, it took a 44 per cent stake but agreed that 50 per cent of its distributable profits during the first three years would be re-invested in the form of a loan to Orbis and this money would be used for the much needed renovation of the state company’s badly maintained hotels. This renovation would be done by another Swedish company, Skanska AB, which would take a five per cent share in this new casino venture.  Amid the euphoria, the Victoria Casino opened in September 1989 after receive ed assurances that all joint venture agreements and operating permits would be honored by the new government. The casino was an instant success, as was the competing Casinos Poland operation at the Marriott Hotel.
But the first treacherous moves were already taking place, by that enemy of all enterprise the tax office. Their initial demand that casinos should pay a ‘turnover’ tax on gross revenues was bad enough, but hot on the heels of that came another wheeze. ‘Gross revenue,’ in their official interpretation, was to mean all cash or financial instruments exchanged for chips – in effect, the ‘drop’.  Under the terms of our agreement, that hotel would have stood to benefit, not only from rental for the area used by the casino, but also have access to 51 per cent of the profits of the Polish partner and 50 per cent of Cherry’s profit for a renovations programme. Curiously, the hotel management decided instead to accept an undisclosed offer from king's online casino. Facing further investigation after protests from various quarters, Kings Casino formed a new company with SOS, an organization connected with a prominent member of Solidarity during the Communist era. The new company had in effect been through a sex change, having become Queen’s Casino. While in Warsaw it had moved to a new prestigious location in the Palace of Culture. We made frequent representations to government ministers until it was announced that the General Prosecutor would investigate the case. On October 1991, we learnt that a court decision had been made which found Queen’s Casino to be illegal. Amazingly, the justification for the verdict did not even touch on failure to comply with the joint venture terms. Instead a moribund law, enacted by the discredited Communists, was resurrected to throw into doubt the validity of all existing casino companies. This gave impetus to the Ministry to produce a new law, which was enacted with haste by Parliament.This new legislation excluded foreign companies from participating in the gambling industry and gave the existing companies the right to sell their share to Polish operators before the determined deadline. Thus, the new government was, in effect, able to expropriate foreign company assets and put them in the hands of their own chosen few. Interestingly, with their habitual double standards, the Western press and political community chose not to see this as policy, instead more typical of a totalitarian regime than the new democrats they had all welcomed. So, for a number of years, the inheritors of this xenophobic legislation have enjoyed a protected life, but is that now threatened? Probably not. In an official report by the european Community on Poland's commitments and requirements for accession to the Union, it said that in the gambling sector, an amendment to the law adopted in April 2003 removed the elements of discrimination against foreign investors, but introduced a discriminatory language requirement for members of the management boards of companies in those activities: it went on to say that this ‘had to be addressed.’ So the protectionism or is it chauvinism? seems to live on. But here they are not alone. Many of the older members of the so-called ‘European family’ already infringe all the principles of free trade in their policies on gambling. Ironically, the biggest danger to the profits of the incumbent license holders in Poland could well be their own newly elected right wing, religious leaning government. On the other hand, the new administration will probably make investment in online poker gaming so unattractive to foreign companies that they’ll still give them a big ‘thank you’. Jim Wrethman is chairman of Solna Leisure, a gaming management consultancy.
|
 |
|
--------------- copyright 2005-06 all rights reserved www.poker.tj -------------- |
