Holland Casino, a state-controlled gambling operator in the Netherlands, is facing an economic hurdle with the newly enacted smoking ban, as a spokesman for the company told Interactive Gaming News the puffing prohibition will "cost us millions."
The ban, which took effect yesterday, puts Holland Casino between a rock and a hard place after the Dutch Senate, in April, defeated a proposal that would have given the company a three-year exclusive license to offer Internet gambling services to Dutch residents.
With no online offering to buoy potential losses, the company has erected special areas where its smoking clientele may play, Flip Dötsch, media relations manager at Holland Casino, told IGN in an e-mail Wednesday.
"In Europe the smoking ban in general has had a negative result on the financial numbers," he said. "We know that the smoking ban will have an effect in the Netherlands. The future will tell."
If the past is any indication, Holland Casino is destined for dour days.
Perhaps the most salient smoking-ban victim in recent years is Rank Group, the United Kingdom land-based and Internet gambling operator.
Its bingo and casino arms, Mecca and Grosvenor, have suffered beneath the weight of the smoking bans, which took effect in Scotland in 2006, followed by England and Wales in 2007.
(Notably, however, tighter Section 21 machine regulations under the Gambling Act 2005, which took effect in September 2007, and higher casino duties proposed in the 2007 Budget have also conspired against Rank.)
In the 2007 fiscal year, Rank closed 11 of 102 bingo clubs. In the seventeen weeks between September 2007 and fiscal yearend, bingo revenue fell 17.3 percent, with admissions down 15 percent and spend-per-head down 2.8 percent.
Casino revenue, still touched by the smoking bans, was not as badly affected. Across fiscal 2007, revenue for Grosvenor was down 3.7 percent to £209.5 million.
Prior to Rank's troubles, the Gala Coral Group, also a two-medium gambling company in the United Kingdom, put the brakes on its £5.5 billion I.P.O.
In September 2006, one of Gala's three private-equity backers, Candover Investments, told the Financial Times it would hold off on the float to gauge effects of the coming Welsh and English smoking bans.
While Mr. Dötsch did not specify what percentage of Holland Casino's clientele does smoke, it is conceivable the estimated 400,000 Dutch online gamblers may be joined by a contingent of casino patrons looking for an online home.
Without an online offering, and with a second proposal granting Holland Casino an online license slow in the making, the company faces a considerable challenge.
On the one hand, the company is under government control, and with the smoking ban -- a reduced clientele thereby -- the government effectively pays itself less.
However, on a loss of land-based revenue, the government may look to breathe new life into its slow-in-coming online initiative (and invite a second infringement proceeding from the European Commission).
"It (going online) would have definitely sparked the attention of the commission, as we could see in Sweden, where the commission has a similar issue with Svenska Spel, who established an online monopoly for poker in March 2006," Justin Franssen, a lawyer with Van Mens & Wisselink in Amsterdam, told IGN in April.
Currently, the company, which launched its first casino in 1976, operates 14 casinos across the Netherlands.