Financial Struggles Reportedly Affect Hard Rock's Planned Casino in Greece
Hard Rock International's proposed massive integrated resort in Athens, Greece, seems to be encountering difficulties. The initial plan involved the government providing financial support, but now they're asking Hard Rock and their partner, Gek Terna, to contribute more to the project.
The project's financial condition has worsened compared to the previous arrangements between Hard Rock and Gek Terna, with banks willing to finance the project requesting an extra €120 million ($132.18 million) from the two companies. This is in addition to the proposed €250 million ($275.37 million).
The companies have expressed their intention to withdraw from the project if a solution isn't found.
High Stakes
Greece's motivation for keeping Gek Terna and Hard Rock involved in the project is clear. This venture has the potential to generate over €6 billion ($6.6 billion) in gross revenue taxes during the next 30 years. The government expects the integrated resort to provide at least €200 million ($220.3 million) for the budget annually for the next 30 years.
The resort is projected to contribute €1.1 billion ($1.21 billion) in Social Security contributions and €800 million ($881 million) in income tax. Also, €500 million ($550.75 million) would come from VAT and €600 million ($660.9 million) from local fees and taxes.
Lamda Development, the company responsible for revitalizing the Hellinikon region of Athens and the landholder of the site where the integrated resort will be built, would also experience a significant revenue increase.
Uncertainty about the projections' accuracy has led to skepticism among some investors, including banks that had previously agreed to finance Hard Rock and Gek Terna. With their withdrawal, the two companies are expected to fill the void.
Another option is reportedly being considered. Greece has a government-controlled recovery fund, which could provide as much as €450 million ($495.67 million).
However, this could create issues. The recovery fund is part of an initiative led by the European Union to aid Greece in overcoming its economic challenges and the COVID-19 pandemic. Using some of the money to build a casino might not be well-received, especially given the country's recent financial struggles due to massive wildfires and other economic problems.
Turning to Political Connections
The project has faced challenges since its conception. An initial bidding war led to a legal battle between Mohegan Gaming and Entertainment (MGE) that ended in court.
MGE received preliminary approval, which Hard Rock challenged. However, it wasn't necessary, as MGE ultimately pulled out due to financial concerns. They then handed their share of the project to their local partner, Gek Terna, who later sold it to Hard Rock.
The integrated resort's future may lie in the United States. Michael Karloutsos, a businessman and the son of Greek Orthodox priest Alex Karloutsos, who reportedly helped secure the initial deal, is linked to Hunter Biden, President Joe Biden's son.
Michael Karloutsos also has connections to former President Donald Trump, having served briefly as the "acting deputy chief of protocol" before leaving the Trump administration.
Hard Rock didn't respond to a request for comment.
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Source: www.casino.org
