Grup Peralada’s Javier Picola tells Simon Liddle why his company is optimistic about its future prospects
Spain’s economy remains in a precarious position, with some analysts claiming the country is on the brink of recession.
The latest round of financial data showed that in the three months to December last year, the country’s economy shrank by 0.3 per cent. It had seen little improvement in the previous quarter but this was the first three-month contraction in two years.
Worryingly, household spending declined 1.1 per cent on the previous quarter, heaping further pressure on Spain’s retail sector. Much of this is attributed to the country’s staggering unemployment rate – the highest in the EU – that passed five million by the end of 2011. And there are state budget cuts and tax increases still to come.
“Obviously we will not look back at 2011 as a good year for our sector,” Javier Picola, general manager of Spanish casino operator Grup Peralada, told InterGaming. “The general situation is a recession, with nearly every sector of the economy touched by it.”
Spain’s gaming market is regulated by its 17 autonomous regions, which presents significant challenges for both operators and equipment suppliers. What is legal in one region may have to be modified in order to be sanctioned in another, while levels of taxation may differ also. For casinos, the inconsistency in regulation across the regions’ various legal frameworks has resulted in greater competition from the street market. Generally speaking, the country’s casinos have seen their revenues squeezed by street operators that in some regions are free to offer virtually all that a casino can, whether it be VLTs or automated table games.
Figures from PricewaterhouseCoopers’ Global Gaming Outlook to 2015 report show that in 2010, Spain’s casinos recorded revenues of around $478m, compared with $510m in 2009 and $654m only four years earlier. 2011 revenues are estimated to have fallen further. By contrast, online gaming grew 20 per cent in 2011, with the sector expected to double in size within three years.
Grup Peralada has three land-based casinos in Catalonia – Barcelona, Peralada and Tarragona. Following the government’s decision to press ahead with the regulation of online gaming last year, the company has also applied for an online gaming licence. Its holdings combine companies in the wine sector, hotels and manufacturing. Unlike others, the company has positioned itself well to overcome the present challenges.
“With our leading position within the Spanish casino sector with Casino Barcelona and the increase of our participation in the market – from 22 per cent to 25 per cent - in 2011, we are optimistic in the medium-term that we will maintain our pioneering spirit and willingness to invest,” said Picola. “We believe our strategy so far has allowed us to build a healthy company and has not jeopardised our business or our large volume of jobs.”
This year, however, will be more of the same for the economy, he warned. “I wish I could say that 2012 will be a better year than 2011 but I predict that it will not. The official discourse about the general economic situation in our country clearly shows that we are going through a very difficult time and as a company we have set ourselves the clear goal of stopping the decline we have suffered in recent years.”
This feature can be read in full in the April 2012 issue of InterGaming
