THE GAMBLING INDUSTRY CONFERENCE- SECOND EDITION - RADU MAZĂRE WANTS TO GROW THE GAMBLING INDUSTRY A special fiscal area for gambling at the seaside

Reporter: At the end of last year, you have expressed your opinion that you no longer wanted to sell the casino of Constanţa. On the contrary, you have said that you want to achieve a public-private partnership with a company interested in the rehabilitation of this monument and to use it for gambling. What is the stage of these steps concerning the rehabilitation of the Casino?

Radu Mazăre: In the opinion of people in the business, from other countries, the casino of Constanţa is showing its age when compared to the designs of modern casinos. The current casinos are very big, with extremely diversified facilities, both inside as well as nearby, they are true malls dedicated to entertainment and spending leisure time. Our casino, of course, remains a landmark and it could be a luxury one, but smaller.

Because this building has been a hot-item in politics as well, I've said that, since it can't be sold - even though Transelectrica, Transgaz, our natural reserves and others, far more important, can be sold - then we are going to find an associate. But, until we can succeed to associate with somebody, to avoid the risk of excessive degradation of the building, we have included it on the list of financing out of European funds for rehabilitation. We need approximately 7 million Euros for its maintenance, and we subsequently would associate with a specialized operator for exploitation. Should we find someone in the interim, willing to do the investment in the rehabilitation of the building by themselves, then we would abandon the European funds idea. Unfortunately, I am not convinced that there would be anybody willing to invest 7 million Euros into a partnership just for rehabilitation. Moreover, a few more million Euros would be needed for buying the building, which would raise the entire investment (purchase and rehabilitation) to about 10 million Euros.

Thus, we have turned towards European funds at the suggestion of my friend Nicuşor Constantinescu (the president of the County Council of Constanţa - ed. note.). He has proposed that we introduce a financing line with European funds, because in the last exercise, there have been some regions which did not spend all the money and there are still some positions available. We had the project for the rehabilitation of the Casino on the list, and because the objective was taken over by the Ministry of Development (Elena Udrea, who was the minister at the time, had promised that she would rehabilitate the building, but she failed to, and the new government of Victor Ponta, has cut the funding allocated for the Constanţa casino - ed. note) we were forced to take it off the investment list. Now, because we've taken over its management again, the Casino of Constanţa is once again on the list as part of a procedure for financing using European funds.

At the present time we are in talks with the management authority to include the renovation of the casino into a financing project, together with another major project which concerns the rehabilitation of the cliffs of Constanţa. This means that, after two-three years (until we sign the contracts and the work is done), a partnership would be concluded with a private operator. Because we can't run it ourselves, you can't have the mayor or the heads of the mayoralty's departments serve as casino floor managers... It's not like I would run the casino myself or the mayoralty would... We are hoping that by December 31st, the building would be fully renovated.

Reporter: Have you already found a company interested in such an association?

Radu Mazăre: There are several companies that we talked to: some American companies, a Russian one (which is also headquartered in the US), and two days ago, someone told me that some investors in the Gulf, Qatar more specifically, would also be interested. But, it's a long way from expressing interest and the actual investment.

For the association we will need to draw up an international selection announcement, according to the legal procedures. I want to have operators that are big on an international level come here, which would also bring in customers. Because it is not profitable to make a large investment in this company and then to be holding weddings.

Reporter: Once the Casino gets rehabilitated, will hotels be built nearby as well?

Radu Mazăre: The moment we partner with someone for operating the casino, we are considering giving them the plot of land held by the current parking lot located beyond the gate no. 1 for entering the port of Constanţa (over 2 hectares- ed. note.), so they can build a small luxury hotel over there which would service the casino.

On the other hand, a separate investment will also be made in the Tomis tourist port, where a Hilton hotel is set to be built, starting probably in spring. I know that the purchase agreement was signed between the business partner a few days ago.

Reporter: Do you think that gambling tourism could be a segment to be tapped by Constanţa and by the Romanian seaside?

Radu Mazăre: Sure, but under specific circumstances. I am trying to find a way to create a "special area" for gambling. We are trying to promote a legislation, without going against the norms of the European Union, so that the coastal region of Romania would receive a more favorable taxation rate for gambling. I also have the agreement of prime minister Victor Ponta for this. Don't ask me about amounts or taxation percentages, because for now I couldn't give any concrete elements.

For the moment, it is very hard to find out what the "backdoors" in the European legislation are. This is what we are working on. I understand that no more special areas may be created. However, I've seen that near Madrid, the "EuroVegas" project is being built, for which Spain drafted a special legislation. It is an investment of tens of billions of Euros made by the biggest owner of casinos in Las Vegas.

I think that gambling tourism, overlapping (at least in the area of the Mamaia resort, of the city of Constanţa and maybe in part of the Danube Delta) over niche, entertainment tourism, which we are promoting, would create the complete package for tourism. At the same time, there are also foreign markets which we could access, which are extremely important given their size. These are the markets of Russia, Turkey, as well as those of the Arab area, especially in the Persian gulf. Unfortunately, we have visa problems when it comes to their citizens, because of our country's attitude towards those countries.