The operator of Tigre de Cristal has had to cut the number of gaming tables by half and do away with its poker rooms due to competition with illegal gambling rooms and lower than expected revenues, Betting Business Russia reports.
G1 Entertainment director Craig Ballantyne in an interview said that when the casino opened in 2015 it comprised 67 gaming tables and 651 slot machines. "It soon became clear that the attendance and revenue indicators did not meet initial expectations. As a result, the number of slot machines was reduced from 651 to 477. The significant investment in our marketing activities, made in 2016, did not help improve the situation. Amid the increased number of visits (mainly due to our entertainment activities, not related to gambling), the volume of sales on the local market and revenues have decreased," he said.
Consequently, the company took measures to reduce operating expenses "to ensure the profitability of the enterprise and its self-sufficient development". The number of slot machines was cut to 319 unit, and the tables, to 55 units. "At the same time, especially recently, the number of gaming tables for our foreign VIP clients is increasing, despite the existing administrative and legal barriers," he stressed.
All this happens amid the thriving illegal gambling business in Russia, with gaming rooms being organized in private apartments or at commercial enterprises, while rooms with slot machines are often disguised as internet cafes. "Illegal gambling is widespread in Primorsky Krai. Such institutions, especially poker clubs, create a negative impact on legal business, despite all the marketing efforts undertaken by us. I note that the presence of approximately 8-9 illegal poker clubs in Vladivostok confirms the overall demand for these services," he carried on.
"The open advertising of such facilities on social networks is something that should be of great concern to local law enforcement and tax authorities, especially taking into account the plans of the Russian government to develop Russia's Far East by attracting foreign investment, stimulating and supporting business, including through construction and development of the resort in the Primorye gambling zone"
"To reduce the company's operating expenses (staff salaries, tax deductions) and prevent losses, Tigre de Cristal was forced to temporarily remove all Texas Holdem game tables from the gaming halls. It should be noted that at the time of opening 10 such tables were installed in the casino. In April 2016, we decided to reduce their number to six. Four tables remained in the hall until February 2017. The number of players eager to support a single legal poker club has become insufficient. Therefore, the decision to remove poker tables did not cause much impact on the attendance."
"In order for any business to bring income to its shareholders, including the state, they need to respond attentively and quickly to market factors. But in conditions when the legal business is compelled to compete with underground gambling establishments, the state as the main shareholder should share the burden of care with the licensed operators."
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