Operator News
Switzerland – Chinese and Indian players help to boost Grand Casino Lucerne’s GGR
By Phil - 21 May 2018
Attracting Chinese and Indian players onto its gaming floor has paid off for Swiss casino group Kursaal Casino AG with GGR at its Grand Casino Lucerne bucking the industry trend and increasing by 2.5 per cent.
Revenues at the casino located on the shores of Lake Lucern came in at 36.9m Swiss francs, a fine result given that the average decline for the 21 Swiss casinos was more than two per cent in stakes.
CEO Wolfgang Bliem said: “Our gaming revenue has risen for the second time in a row. On the one hand, it pays to start operating at 9 o’clock in the morning. On the other hand, we have more guests from China and India. Especially the latter are more common in the casino than a few years ago.”
The casino hired an employee from China who uses the social media and personal contacts to attract tourists to the casino.
Mr. Bliem added: “The group business makes it difficult to recruit visitors because of the short stays. But we notice that more and more Asian guests are travelling individually. With them, our efforts have paid off.”
About one fifth of the gaming revenue comes from tourists.
The group also succeeded in reducing operating expenses by half a million francs.
Historically, the operating costs for the casino have been significantly higher than the industry average due to what the casino’s owners term ‘the extensive catering offer as well as the building infrastructure costs.’
Guido Egli, Chairman of Luzaal’s Kursaal Casino AG, added: “We worked well and in contrast to the industry trend. The catering industry also developed well. More visitors tried their luck in 2017, and they also risked higher stakes at the machines and gaming tables. The 215,000 guests spent 36.9m Swiss francs, the gross gaming revenue rose compared to the previous year by 2.5 percent. Compared to the rest of the industry, this is a respectable figure in that the 21 casinos lost on average more than two per cent in stakes.”
However despite the improved results, for the first time since 2005, the casino shareholders receive no dividend. At that time, the introduction of the Grand Jeu made it necessary to invest heavily in gambling machines that made wagers of more than five francs possible.
This time, the Lucerne casino leadership is preparing for the next big leap in the Swiss gaming industry, the introduction of online gambling with the vote on June 10 to see what happens.
Mr. Egli explained that the decision was taken for shareholders to contribute to these expenses by waiving their dividend for 2017. That amounts to around 800,000 francs in total. Kursaal Casino AG has paid CHF 12 per share over the past few years, with a dividend yield of a 3.4 per cent.
“We tested different variants,” he explained. “So an increase in the share capital was also up for debate. But it was questionable whether major shareholders like the city and the canton of Lucerne would follow suit. We came to the conclusion that it would be better not to dilute our proven share structure.”
The city of Lucerne owns 11 per cent of the share capital and the canton 3.7 per cent. The share capital amounts to 6.4mfrancs. With the exception of the city, no shareholder has a stake of more than five per cent.
The vote in June is clearly pivotal to the casino’s future success.
Mr. Egli said: “If we are denied the path to an online business, our sales will gradually shrink along with profits over the medium term. We will be less likely to reach young players, and we will not be able to link online and offline offerings. The latter is the future model of the gaming industry.”
