James Walker takes a closer look at one of the world's most prestigious gaming locations...

With a population of just 32,000 and an area covering less than two square kilometres, the Principality of Monaco is the world’s most densely populated country and second-smallest independent nation. Bordering southern France and overlooking the glistening Mediterranean waters, the prestigious destination has long been a playground of the rich and famous, attracting everyone from A-list celebrities to global business entrepreneurs. In particular, Monte Carlo, the wealthiest of Monaco’s various administrative wards, is one of the world’s most exclusive locations, known primarily for three things: glamour, the Grand Prix and gaming.

The history of casinos in Monaco can be traced back to 1854, when gambling was legalised by Prince Florestan I. On March 31, 1863, François Blanc, a French casino proprietor, purchased the gambling concession in the principality for just 1,700,000 francs (about US$340,000). He subsequently built the famous Casino de Monte-Carlo, whose profits were so high that in 1869 Prince Charles III ordered the abolition of all land, income and inheritance taxes - a law that still exists today.

Since 1898, the Casino de Monte-Carlo has been operated by the Société des Bains de Mer. With the State of Monaco as its main shareholder, SBM’s activities extend to various areas relating to tourism, leisure and business. In fiscal 2007, group turnover reached €400m, with 60 per cent of revenues derived from the five casinos it operates in the principality.

For more than 100 years, SBM has played a fundamental role in Monaco’s growth, participating in modern developments and introducing new trends. Yet while the group maintains an impressive real estate portfolio that includes four hotels, three spas and over 30 restaurants, lounges and bars, it is the Casino de Monte-Carlo that keeps the crowds coming.

"Most famous of all the tourist attractions in Monaco is the Casino de Monte-Carlo," said SBM CEO Bernard Lambert. "Created back in 1863, the casino has had several extensions, and reached its current size in the late 19th century." Lambert said the success of the Casino de Monte-Carlo - and indeed all of SMB’s properties - is due in no small part to the highly personalised experience that all guests receive from the point of arrival and throughout their stay.

When asked why gambling is so well suited to Monte Carlo, Lambert said: "We have a gaming history that is second to none and remain committed to the quality and variety of our table games. Roulette remains at the heart of our activities, but punto banco is also attracting new gamblers. Blackjack and poker are right behind."

With one policeman for every 100 inhabitants and a 24-hour video surveillance system covering the entire principality, Monaco is one of the safest places in the world. Moreover, the state’s small size plays to its advantage in that tourists can choose from a diverse range of hotels and amenities without having to travel long distances.

"Monte Carlo offers a unique experience for all our clients and allows than to combine gambling with remarkable Michelin restaurants, entertainments, trendy lounges and above all safety at all times," Lambert continued. "Our strategy is to constantly improve the existing facilities and the quality of our offerings and venues to keep this competition edge which clearly sets us aside from the rest of the crowd."

In June 2003, SBM entered into a strategic alliance with US casino magnate Steve Wynn. The two parties are rumoured to be pursuing an agreement for the construction of a floating city in the Bay of Monaco, and part of this plan would include building a spectacular new casino. After the expansion of the Port of Monaco, the construction of an Ocean City would be the next logical development for the tiny principality. Indeed, the recent successor to the throne, Prince Albert, has already confirmed that "the only direction Monaco can grow is towards the sea."

Whatever becomes of these plans, it is clear that SBM’s future growth will remain firmly tied to the state’s own evolution, and even beyond this. Lambert concludes: "If any possibility arises, we will most probably be very attentive for some external growth - both in casinos and hotels - to take the Monte Carlo flavour outside Monaco."