Losses exceed gains market-wide
Just three of Bavaria’s nine casinos—Feuchtwangen, Garmisch-Partenkirchen and Bad Wiessee—are profitable, according to data from the Bavaria Lottery Corp., parent company of the unit that operates the gaming halls.
According to results published by CDC Gaming Reports, the total profit market-wide came to about €8.3 million (US$9.68 million) for 2017. Bad Wiessee accounted for most of that, with profits of €6.2 million. But profits did not keep pace with the losses incurred at the casinos at Bad Füssing, Bad Kissingen, Bad Kötzting, Bad Reichenhall, Bad Steben and Lindau. The red ink at those properties amounted to €11.3 million (US$13.1 million).
Bavaria’s casinos have historically been money-losers. Though the group collectively turned a small profit of €150,000 in 2016, it returned to the loss column the next year; moreover, that blip occurred because of a court-ordered repayment by the government of €4.7 million in fees paid over the previous eight years.
Since 2006, German casino revenues have been in free fall, thanks largely to competition from slot machine arcades, CDC contributor Andrew Tottenham of UK-based gaming consultancy Tottenham & Co. reported. In 2006, gross gaming revenues for casinos across Germany peaked at €960 million. Ten years later, that figure had dropped to €597 million, as revenues from gaming machines in arcades and bars soared from €3.4 billion to €6.9 billion. There’s also plenty of competition from casinos on the Czech side of the border.
But according to Tottenham, the biggest problem is that Bayerische Spielbanken is “state-owned and operated,” and therefore “managed not as a commercial enterprise, but on a political basis.” For one thing, that means patronage jobs are protected, even as revenues plummet.
“The politicians who have responsibility for the casino, to use a Dutch expression, do not want to saw the legs off their own chair,” he wrote. “Employees are voters, as are their mothers, fathers, brothers, sisters, aunts and uncles. But by not reducing operating costs, they are doing their constituents and their employees a disservice in the long run,” and have become “enmired in debt.”
