🖐 EC reverses position on Greek state aid to casinos - Gaming Intelligence

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Assimakis advises on questions of EU and Greek competition law, EU business regulation, international arbitration, litigation and private international law.


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Advantage from High Entry Prices - Free State Aid blog article - Read now
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Commission Decision of on State aid to certain Greek casinos C 16/​10 (ex NN 22/10, ex CP /09) implemented by the Hellenic Republic.


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against Greek casinos, alleging that these casinos were receiving State aid from the Greek government. We carried out an economic analysis to determine.


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Apparently, the Porto Rio Casino in Patras, Greece has been has finally decided to drop its action for illegal State aid against the Greek.


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on the measures to certain Greek casinos SA – C 16/ (ex on admissions to casinos, alleging that that system constituted State aid.


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Phedon Nicolaides*. The General Court annulled the Commission Decision ​/ finding that certain Greek casinos had received aid that was incompatible.


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The European Commission has concluded two investigations under EU state aid rules concerning Greek casinos. In one decision, the Commission found that.


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(CN) – The European Commission told Greece it can no longer subsidize state-​run casino and directed the gambling meccas to return about


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decides that tax on admission fees in Greek casinos is not State aid. a private casino operator in , the Commission opened a State aid.


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The European Commission has reversed its position that a past system of taxes on entry fees to Greek casinos constituted state aid, a ruling.


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The only question is whether the price of EUR 15 was so high that it put off customers. Related Content.{/INSERTKEYS}{/PARAGRAPH} Yet, the Commission chose to argue that the lower entry price for some casinos was inconsequential for their total income [i. It is unlikely that punters would have been put off by an extra price of EUR 9. Had the Greek state not regulated entry prices, each casino would have charged a price that would maximise its revenue. Since it can keep EUR 1. As the Court acknowledged, free tickets that generated zero income for casinos were advantageous to those casinos that had to pay to the state EUR 4. All topics Mailing List. Therefore, the conclusion is that, if the price of EUR 15 did not have a noticeable effect on demand, the high-price casinos derived an advantage from the differential price fixing because they were able to keep a larger amount of money per customer. Once more, it is the high-price casinos that generated more revenue from promotional activities. This was an amazing legal victory for Greece, given the fact that at first sight there was an indisputable favourable treatment of the three casinos that paid only EUR 4. Low-price casinos lost EUR 4. Again, it appears that it was the high-price casinos that could have benefited more. Undoubtedly, the competitive relations between the different casinos were much more complex than what is described here. It then held that it was up to the Commission to prove that in practice the number of free tickets was too high and had an impact on high-price casinos [paragraph 78]. Free tickets were used for promotional purposes. The reader may object that the example above is contrived, which of course it is. A convincing explanation of the existence of advantage must take into account the effect of both the difference in entry prices and the practice of free tickets. The Commission argued that the practice of offering free tickets conferred an advantage to the casinos that paid to the Greek state only EUR 4. Since free tickets were promotional instruments, casinos would have to attract four extra customers for each free ticket in order to break even. If the price of EUR was too high for some customers, then perhaps the benefit that high-price casinos derived from keeping EUR 3 was offset by the fact that they had fewer customers. They should have instead considered the effect of absolute prices. The optimum price depended also on the prices of other services offered within casinos. After the preliminary arguments concerning admissibility were addressed, the General Court focused immediately on the question whether the two different ticket prices conferred an advantage to the three casinos. The Court noted, however, that it had already rejected that finding [paragraph 77]. For the three casinos mentioned above, the entry price was EUR 6 euro. First name First name. Chillin' Competition Blog. Casinos would offer free tickets only if they could attract more than four extra customers or generate more than four extra visits from a customer with a free ticket. But if that were true, it would have meant that the revenue-maximising price was below EUR However, casual observation would suggest that this is unlikely to be the case. The issue now is not whether the typical customer would not object to paying EUR 15 instead of EUR 6, but whether the price of EUR 15 would turn away anyone who would want to gamble. Second, the offer of free tickets was voluntary, not mandatory. But because economic analysis can lead to counter-intuitive results it should not have been ignored. But casinos would not charge a very high entry price because they would not want to turn punters away. In reply, the General Court rejected this as too vague because the Commission did not define the total amount of income of each casino [paragraph 62]. As a result, the amounts they could keep were also different but still proportional. But they are undertaken because they generate income that is expected to cover their costs. And they were able to do that because the fixed higher price allowed them to keep a larger amount of revenue even when they paid to the government a larger amount than the casinos for which the entry price was fixed at a lower level. The three casinos could keep only EUR 1. Subscribe now! Assume indeed that they were able to attract six extra customers for every free ticket. In typical cases of reduction of the tax base, beneficiary companies pay less than others with the same revenue. The only question is whether the fixing of prices at different levels enabled some casinos to increase their advantage further by being able to offer free tickets. But that was not the relevant point. In the next section I will provide a different perspective to this case. This reasoning leads us to the conclusion that the different entry prices fixed by the Greek government in fact conferred an advantage to the high-price casinos, not the low-price casinos precisely because the high-price casinos were able to make more money per customer who entered their premises. {PARAGRAPH}{INSERTKEYS}In , six more casinos were allowed to be established. The relevant point was the absolute amount of the net revenue for each casino after they made the payment to the government. The Court acknowledged that indeed there was an advantage for the casinos that paid the lower amount. Email Adress. The optimum price was for the bundle of services. The Court was right that the relative amounts paid to the government were the same. In conclusion, this is a case where proper economic analysis should have been carried out. The first thing we need to take into account is that promotional activities in themselves are costly. It acknowledged that there was a difference in the amount they had to pay to the Greek state [paragraphs ] but, surprisingly, also observed that this difference alone was not enough to lead to a finding that the three casinos derived an advantage. For the others it was fixed at EUR All casinos were also allowed to offer free tickets to their customers for certain purposes. This is because casinos were spatially far apart [Corfu, Athens region, Thessaloniki, Rhodes, etc]. It is this lower amount of tax that had an impact on the overall income of the low-price casinos [it raised their overall income]. The Court also observed that the Commission never defined whether the ticket price of EUR 6 was attractive or not to potential customers [paragraph 66]. Neither the Commission, nor the Court asked that question. We cannot know for sure. This is irrespective of the amount they had to pay to the government or the amount they were allowed to keep. When customers were given free entry, there was zero fee revenue for casinos and what they paid to the Greek state had to come out of their other income. The price of the ticket for entry into casinos was fixed by public authorities. But if we wish to carry out a more realistic assessment of the situation, we need to consider whether the different entry prices had any impact on demand or the willingness of punters to enter casinos. Last Name Last name. That is, the low-price casinos would lose [by paying to the government] EUR 4. Hence, the difference in prices was not important or relevant for most customers. Since, casinos were not forced to offer free tickets, they must have done it only when they expected to gain from it. But since we do not know those prices we will have to ignore them. Yes, it keeps the same proportion of what it charges as the other casino, but in the end what matters to it is how much money it puts in its pocket. Both the Court and the Commission focused on relative prices. This resulted in a difference of EUR 7. For example, a new customer with a free ticket tells his or her friends and the casino gets extra customers or the same customer comes again. Assume that a casino that charges EUR 6 attracts customers. But in the case of the Greek casinos, their revenue varied depending on the price of the ticket they could charge. Then the General Court turned its attention to the fact that casinos could also offer free tickets.