Casinos, one-arm bandits, coming to cash-strapped French cities

By Jean-Francois Rosnoblet MARSEILLE, France (Reuters) - French casino operators are seeking to expand beyond their historic hunting grounds of chic holiday resorts in search of younger customers. An industry that has thrived despite strict regulation and a century-old ban in the capital Paris is now eyeing big urban centres where it was once unwelcome. With cash-strapped local governments looking for more revenue, the tax jackpots casinos can generate are looking increasingly attractive. That is helping them get a foothold outside of the resort and health spa towns, such as Deauville on France's northern coast, to which they have been largely confined since casino gambling was legalised in 1907. In a policy U-turn, the mayor of Marseille, Jean-Claude Gaudin, has just opened the way for a casino operation in the Mediterranean port city of more than 800,000 people, where one in four resident lives below the poverty line. Gaudin announced earlier this week that a public tender was to be launched to license a casino operator in a sun-soaked city that more often makes the headlines with news of shootouts among rival druglords. "I've never in my entire life played in a casino, but I can understand people like it," Gaudin conceded. As France, like the rest of Europe, strives to keep a lid on public overspending, the drive to cut deficits is putting local government funding under increasing pressure and boosting the attractiveness of cash-cow casinos. According to the casino industry federation, taxes paid by casinos, mostly levies on "one-arm bandits" and other types of coin-slot machines, provide 30 percent of the city budget in Deauville and up to 80 percent of local funds on other places. Now that the casino business as a whole is back in profit for the first time since 2008, the potential tax take for stretched local governments is even greater. For the first time in seven years, the net revenues of France's 201 casinos rose in 2015, growing 2.2 percent to 2.2 billion euros. "France is the leading country in Europe for the number of casinos and the turnover figure, ahead of England," Laurent Lassiaz, chairman of Casino group JOA, told Reuters. More than half of the space at JOA's 22 casinos was now devoted to non-gambling activity too, he said, adding that diversification was vital. "The goal is to generate turnover and profitability from the host of activities with a clientele that sees casinos more as leisure centres." Partouche, the country's largest casino group, has started building an open air casino in the historic shipbuilding city of La Ciotat, not far from Marseille, where most of a vast outdoor space will be filled with slot machines. All of the large casino groups are looking to get in on the act in Marseille itself, where mayor Gaudin's change of heart is partly inspired by studies showing a new casino could create 500 jobs and contribute 10 million euros per year to the city's public finances. The last bastion is Paris. No casinos are allowed inside the capital or anywhere within a radius of 100 km under a law dating back to 1907. Unlike many other cities, the capital is less in need of an extra revenue stream given the vast sources that already exist in the form of local business taxes and the spoils of being one of the world's biggest tourist attractions. If Paris authorities shun a 2015 report recommending that casinos be legalised, casino groups could enter the capital via private gambling clubs, of which there are just three. The idea of expanding that activity along models that have thrived in London, is now being actively examined, says JOA's Lassiaz. (Writing by Brian Love; Editing by Andrew Callus and Tom Heneghan)