The casino king and his expanding empire

  • 2004-01-22
As chairman of the executive board of the Olympic Casino Group, Armin Karu is the undisputed casino king of the Baltics. Recently he sat down with Aleksei Gunter in Tallinn to share his views on some of the idiosyncrasies of Baltic casinos and where the gaming market is headed.

What is it about the Olympic Casino Group that makes it unique?
We have used the American concept that combines tables, slot machines and live entertainment in Estonia, and we are trying to do the same in Latvia and Lithuania. We were the first to offer casinos of that kind. The largest casino in the Baltics is now in Lithuania - it is our Olympic Casino at the Reval Hotel Lietuva. It's an enormous complex with 20 tables, 120 slots, a bar, shows and a VIP room for big players.
This American concept works everywhere in the world. We cannot say it works here because we are a postsocialist country, and people have less money. The common European concept of a casino as a place for the elite, with tables only - the classical Russian novel theme - probably comes from our historic experience because we are in Europe. Many people are not ready to risk large sums at the table but would gladly try slot machines.

What are the urgent issues in the Baltic gambling industry?
Markets are never divided permanently. The question is if anyone can offer something unique. I can say the potential of the casino business is very big. Maybe in Estonia it is smaller than in Latvia. In Latvia slot machines have been allowed everywhere, in bars and supermarkets. It was considered a side business and stimulated a really negative image of the gambling industry. It was impossible to provide quality when slot machines were scattered everywhere. No smiling personnel to teach how to play, no security workers. The new tax regulations in Latvia will probably wipe out those improvised casinos. Most of the work on improving the image of gambling in the Baltics is to be done in Latvia, but also elsewhere.
In Estonia, since 1995 casinos have had to be set in separate rooms. [They] have had to have qualified personnel and restrict the entrance of people under 21. As a result, the image of casinos here is not that negative.

Are the gambling markets of Estonia, Latvia and Lithuania different in any other way?
The annual volume of the gaming market amounts to roughly 400 million kroons [25 million euros] in Lithuania, 900 million kroons in Estonia and in Latvia, according to the official data, it tops off at 1 billion kroons. I hope that the volume of the market in Lithuania will eventually become three times that of Estonia, just as Lithuania's population is three times bigger, in the next five years. It took Estonia almost 10 years to reach the present market volume, so I guess it will take certain time in Lithuania, too.
Turnoverwise, Olympic Casino holds a 35 percent market share in Estonia, about 60 percent in Lithuania and 4 - 5 percent in Latvia.

What does the immediate future look for the Olympic Casino Group?
We will definitely be growing more in Lithuania and Latvia than in Estonia. In Lithuania there are towns where there are no casinos, such as Klaipeda, Kaunas, Panevezis and so on. We are also looking forward to entering other markets, like Ukraine, Poland, Belarus and northwestern Russia. We hope to offer clients of those markets something better compared to what they have now. Unfortunately we will not be able to go to Finland because they will have monopoly on gambling for at least 10 years. The same is in Sweden.

Why do local people visit casinos?
When the whole thing started in 1992 casinos were usually located in basements and were run by mob-like people and laymen did not dare to enter. Later the casino-business approach became more professional, and people consider it an alternative to a restaurant. Adults come to casinos to feel the joy of playing they were otherwise deprived of. Today fewer people come to us with a clear purpose to make money, to win, like it was in the early years.
There is no casino culture in the Baltics, because casinos were banned in the Soviet times. However, while in other countries lottery and casinos belong to the same class of entertainment, we take lottery as something natural.

What is the most popular game in your casinos?
As far as tables are concerned, roulette and poker are definitely the most popular. As to the slot machines, we have over 100 different games, and it is difficult to name the most played. In Estonia slot machines are more popular, and their share in the overall turnover exceeds that of the tables.

What about the online gambling development?
Online gambling projects have been developing here independently, parallel to the regular gambling. Online casinos will never be able to replace the atmosphere of a real casino ... [In a real casino] there are performers, drinks, other people to communicate with, a club-like atmosphere - all that will never be available online. Internet casino merely offers an option to try your luck.
We participate in the project that does not allow players to bet real money, and it has some 10,000 registered users. In Estonia online gambling is not possible according to the present legislation. But it is allowed in Latvia from January 2004. We are planning to offer online casino services in Latvia this year.