Eastern European casino operator Olympic Entertainment Group (OEG) may have to close seven slots halls in its number one market after Latvian officials voted to ban gambling in certain areas.
On Tuesday, the Riga City Council in Latvia’s capital voted to ban all gambling halls in Riga’s historic center district, except those located in four- and five-star hotels. The vote followed a Supreme Court ruling supporting the council’s objections to a gambling operator’s desire to open a new venue in Riga’s old district.
The ban affects 41 gaming venues, each of which will require the council to prepare separate draft resolutions of closure. Once such orders are issued, the affected gambling halls will have five years to wrap up their affairs and cease operations.
Latvian Gaming Business Association advisor Arnis Verzemnieks claimed the city’s business district would suffer as a result of the closures due to reduced visitor traffic. Verzemnieks also complained that gaming operators were increasingly unable to make any long-term plans due to the unpredictable regulatory environment.
OEG operates seven of the affected 41 gaming halls, and Latvia represents OEG’s biggest market in terms of revenue. The company currently operates 54 venues across the country, which generated revenue of €66.2m and operating profit of €24m last year. The Latvian revenue figure is roughly 50% bigger than OEG’s second-biggest market, Estonia. The Latvian operations, which have been bolstered in recent years through acquisitions, employ over 900 individuals.
On Wednesday, OEG issued a statement alerting investors that the earliest it would have to begin closing its Riga halls would be June 2022. However, OEG stressed that its flagship Riga property, Olympic Voodoo Casino, doesn’t face closure and OEG even suggested that the new gambling ban could have “a positive impact” on Voodoo’s revenue in the long run.
This type of notice is becoming a pattern for OEG. In April, the city council in Slovakia’s capital Bratislava announced an absolute ban on gambling within city limits. Operators can continue to operate their venues for the time being, but will have to close when their current licenses expire. OEG operates four gaming venues in Bratislava.
Last September, OEG announced that its flagship Warsaw casino’s application for license renewal had been rejected, and OEG’s Polish subsidiary filed for bankruptcy protection in January. The casino operations in the Warsaw Hilton have since been taken over by Century Casinos subsidiary Casinos Poland.