News | Sunday, 22 November 2009

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Tumas vying for €20m casino dominance

Matthew Vella
George Fenech’s Tumas Group is set for an aggressive takeover of the casino industry, if and when it secures the 10-year concession for the Dragonara casino to become the owner of 90% of the island’s casino business.
Figures being published by MaltaToday for the first time paint a clear picture of the lucrative €20 million-a-year industry, at present divided between three players.
The Tumas Group’s casino company, Tomino, is already in a dominant position with 49% of the casino business in hand, namely through the Oracle and Portomaso casinos which are governed by a single licence.
The Dragonara, managed by the French-based Accor-Barrière, accounts for 40.7% of market share, while the Venice municipality’s Casinò di Venezia, in Vittoriosa, takes just 10.4% of the market.
Both Tomino and Accor are in the running for the Dragonara concession. The other bidder is the Novomatic Peninsula consortium. The winning bidder will retain the casino’s 225 employees and take over in January 2010.Four months since bidders presented their offers for the concession, delays in the adjudication process now risk making the wait even more tortuous for investors. The new concession was scheduled to be signed earlier this week (on 16 November), but not even the preferred bidders have been announced. “Given so many recent developments having to do with gaming legislation and interests, any delay in the tendering process is frustrating for anybody in the industry,” a gaming expert told MaltaToday.
In 2006, Tomino bolstered its dominance of the market with the Portomaso casino. Tomino was granted a special concession through a split-licence – a two-for-one licence that covers both the Portomaso and Oracle casinos.
The idea for the split-licence was first mooted in a letter of intent signed by John Dalli as finance minister back in 2004. The licence was formally issued in 2006, with Lawrence Gonzi as finance minister.
An additional change in policy allowed all casinos to increase their ratio of 10 gaming machines for each gaming table to 15, which allowed Tomino to spread out its gaming assets across both casinos. In its first year of operation, Portomaso gave Tomino a 43% market share, surpassing the Dragonara and generating a massive 48% increase in net winnings.
As things stand, the government’s investment arm – MIMCOL – which is responsible for the concession, has already missed two deadlines: announcing the preferred bidders in September, and signing the concession in November.
The other bidder, Novomatic Peninsula, is made up of the gaming multinational Novomatic and the Maltese firm Pinnacle Gaming, which operates the Fairplay gaming halls in Malta.
Pinnacle suffered the brunt of the shutdown of the gaming halls, which took place a week before bidders presented their offers for the Dragonara concession in August 2009.
Industry sources have again confirmed with MaltaToday that the shutdown shifted some 30% of business back into the casinos.
While MIMCOL has so far not yet announced the preferred bidders, in October this newspaper broke the news that finance minister Tonio Fenech had travelled on the private jet of Tumas chairman George Fenech back in April to watch Arsenal play in Spain.
The news fuelled the negative reaction of gaming hall operators, who are still enduring the shutdown of their halls. Finance Minister Tonio Fenech claims the shutdown was justified by the fact that gaming halls were not yet licensed. After new broke of his Arsenal freebie, the minister went on record claiming he is a “committed Christian” who believes that “gaming is wrong”.
While not covered by a gaming licence, the gambling halls were officially scheduled to be fully licensed by the Lotteries and Gaming Authority back in June 2009, until the process was stalled. New rules are now being drawn up, which gaming hall operators say will make their licensing even more onerous and expensive than originally expected. The legal amendments to the gaming law are being debated in parliament, but the rules will only be issued by legal notice, after the amended gaming law is passed.

mvella@mediatoday.com.mt

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