Negotiations are still swirling in the wind for the world’s oldest land-based casino. It’s located in the city of Venice, Italy, and it’s in a state of panic.
Why? No one wants to take over the management. The city council of Venice wants investors to commit roughly half a billion Euros over the course of 30 years.
This is a beautiful casino with a very rich history. The Ca’Vendramin Calergi casino was built in 1638, and is still in operation to this day.
Some close to the deal are realizing the big mistake here: asking for too much money in a very uncertain economy. Gambling is an activity that people tend to do year round, no matter what the economy does. However, it’s wise to be conservative in a period where credit markets are still cold, so say the least.
The council has two choices: go for another public tender or go completely private. Venice’s major indicated that there were no other options available.
The terms of the old public tender that got shot down were heavy: investors would trade a down payment of 140 million Euros and then 308 million Euros to be paid over 30 years. A year 16 million Euro gambling tax would also have to be paid to the state.
The bureaucracy of Italy comes into play on this deal heavily as well. They added a lot of mess to the deal by requiring the new management have to pay a 5% tax on gross revenue exceeding 140 million Euros. These high levels of taxation are driving offers away from the casino.
In our opinion, it’s going to take private investment to keep up with not only the regulations involved with taking care of such an old casino, but also making sure that the tax obligations are met every year.
What do you think? Sound off in the comments.