With glam, glitter and go-go girls, the fast paced, all-or-nothing world of casinos fits remarkably well with the Balts' increasingly consumerist take on life. And Baltic casinos have now become a force to be reckoned with. One of the strongest service based industries in the region, the casino business has seen huge growth in the past few years 's growth which shows no signs of slowing down. In this week's Industry Insider, The Baltic Times looks into the casino business, examines the controversial advertising laws surrounding it, explores the growing phenomenon of online gambling and scopes out the Baltics' biggest casino company.
RIGA - In many areas the Baltics still have a long, hard road to travel before they catch up with the West. When it comes to casinos, however, the region has gone far beyond even some of its most developed Western neighbors. The industry has skyrocketed and is still experiencing stable growth rates of nearly 50 percent per year.
One wildly successful company has taken a powerful command of the Baltic casino market 's the Olympic Entertainment Group. Olympic has become so powerful in the industry that when The Baltic Times tried to get in touch with the Latvian association of gaming businesses, they directed our questions to Olympic.
"In most cases we can proudly say that we are a step ahead of our colleagues as several new games and technical solutions arrived in Europe for the first time through Olympic Casinos," Katre Kaarenperk, chief marketing officer for the Olympic Entertainment Group, told The Baltic Times.
"I think that everyone who has in recent years visited casinos in various countries agrees: Olympic Casinos' service quality, modern venues and games, and advanced technological solutions can be compared to any world casino," she said.
Olympic Casinos have absorbed most of the major competition over the past few years, and are now only rivaled in the three Baltic countries by a Russian owned company 's the Ritzio Group.
Not only has the Olympic group been absorbing the competition to grow, it has also been spurred on by a rapid rise in the entire industry. According to Latvian gambling watchdog data, for example, the casino industry's turnover in the first nine months of 2007 grew by 41.9 percent.
In Lithuania the growth has been even more drastic, where annual revenues increased by 49.7 percent in the first half of 2007. Casinos arrived late to the Baltic state 's legislation only made in possible to run a casino in 2001. Since then, the casino business has grown so quickly that even industry moguls have called for tighter restrictions on gaming.
"The supply should be insufficient and the demand should be excessive. All civilized countries apply this approach since gambling poses certain risks, including money-wasting and risks to family welfare," Samuilas Kacas, head of Teteatete Kazino, told the Laikinoji Sostine supplement to the Lietuvos Rytas daily in mid-October.
"The activities of casinos and slot machine halls are subject to regular scrutiny by auditors in the developed world. Their conclusions include economic, social and even criminal aspects," the leader of the largest slot machines network in Kaunas, Lithuania's second largest city, said.
The Olympic Group has not been fazed by calls for a slowdown in the market, however, and plans to maintain its high-growth policies well into the future. "We have chosen our road, the road toward rapid growth," Kaarenperk said.
With the Baltic market well under its thumb, the Olympic Group has now turned its sights to the rest of Eastern Europe.
"The funds that we raised in our IPO a year ago are invested in Ukraine, Belarus, Poland, Romania, Slovakia and, last but not least, in the Baltic states. We believe that the concept which was so successful for us in the Baltic states will also become the flagship of modern entertainment in many other countries," Kaarenperk said.
While this strategy has helped the company see consistently high growth rates, the risky rapid expansion into other Eastern European countries threatens to damage the Olympic group.
The Olympic Group has invested millions of euros into Kiev, where they now possibly face a total ban on business in the city. Ukrainian President Viktor Yushchenko recently submitted a plan to Kiev Mayor Leonid Chernovetsky to ban all casinos in a 30 kilometer radius of the city's downtown area 's a plan for which the mayor has voiced strong support.
The new legislation could force Olympic to close the doors of a 1 million euro slot hall it opened in November. Ukrainian operations accounted for 6.4 percent of the Olympic Group's revenues in the first nine months of 2007.
The Olympic Group is far from fazed by restrictive legislation, however, and representatives said that it was unlikely the ban would force them to close entirely. Kaarenperk said that Olympic is even looking forward to some upcoming Estonian legislation which would ease the group's operations in their home country.
"We have been waiting for a new gambling law in Estonia for several years now. This would arrange the market in a better way and give the operators more confidence to plan major investments," she said.
While Baltic casinos may never be able to rival those in Vegas, which saw more than six times the entire Baltic population in business last year, the industry is experiencing strong growth and Olympic is well on its way to becoming a world leader.
Olympic winners - Record winnings for Olympic Casinos in the Baltics:
* Local jackpot in one Olympic Casino: 140,575 euros (Sept. 2006)
* "Mystery Jackpot," (can be won in any Olympic casino in one country): 100,000 euros (Aug. 2007)
* Oasis-poker jackpot: 114,600 euros (Oct. 2004)
* Single take at slot machines: 127,800 euros (March 2007)
