Can the Casino Industry Help Revive the Greek Economy?

The Greek city of Athens is witnessing an investor boom, with the construction of hip new hotels from leading names dotting the skyline. After plunging more than 40% in 2010, property prices are gradually trending upward, and stability is returning. This has revived confidence in the economy and given a boost to tourism, with Greece hosting 33 million foreign visitors in 2018, as per an article by The New York Times.

Greece’s bailout of over €360 billion from the International Monetary Fund ended in 2018, and the country’s new leader Kyriakos Mitsotakis is on a quest to revive the economy through efforts that will boost tourism and generate revenues. The tourism drive is different this time. After all, it is a beautiful country that entices foreign visitors with its history, culture and local landscapes. However, for the first time, the government is focusing on increasing the competitiveness of its casino industry in order to attract foreign investments.

On one hand, big players like Airbnb and Wyndham Hotels are pouring billions into the country’s tourism sector. On the other hand, big casino players like Hard Rock International are paving the way for integrated casino resorts, which are expected to spur development.

Connecting the Gaming Sector with Tourism  

Tourism is the driver of the Greek economy and is expected to account for one-fourth of the country’s GDP by 2028, according to a report by the World Travel and Tourism Council. Leveraging this, Greek lawmakers took a page out of the playbooks of countries like Macau and Singapore, by passing a revised casino bill in 2018.

Key highlights of this bill:

• Release of new renewable casino licenses with up to 30 years definite term
• “Wide range type” licenses, creation of integrated casino resorts that offer hospitality, leisure and retail activities along with gambling
• Introduction of an Integrated Resort Casino (IRC) license in the Hellinikon area to be treated as a priority
• Introduction of new licenses in the Greek islands of Crete, Myconos and Santorini, all of which are prominent tourist hubs
• Friendlier duty rates and simplified approval process

The €8 Billion Hellinikon Resort Project

In February 2018, Greece’s top administrative court approved the plan for a major IRC at Athens’ former Hellinikon airport. This €8 billion resort was to include a casino, luxury residences, high-rise hotels and a marina where high-profile visitors could park their yachts. According to its developers, the resort once developed could boost the country’s GDP by 2.4%.  However, there were various roadblocks to this project right from the start. The previous government failed to launch the project on different grounds, most of which were attributed to arbitrary government delays. The last date to submit bids for the legal tender was stretched to September 30, after many such shifts in deadlines.

Can the New Government Deliver on Its Promises?

As of October 3, there are two bids for the project. One from Hard Rock International and other by US casino operator Mohegan Gaming & Entertainment, together with Greek contractor GEK Terna. The winner of the tender will be announced in November.

The new government seems to be focused on speeding up the process. Only time will tell how successful they are in achieving that. Casinos have historically helped in reviving economies, with its positive impact on job creation and a boost to spending by tourists. The Greek economy too can benefit from a flourishing casino industry.