For a more precise view of results and discussion, this section will be divided into four parts as explained in the previous chapter.
4.1. Point A: Actual Casino Tourism Offer in Montenegro
As we have mentioned in the introduction, Montenegro has 5 casinos located in five high category hotels. In the next text we will list all five companies developing casino businesses in Montenegro and we are going to present these hotels separately (
Table 3).
The table above shows the casino companies in Montenegro, hotels where casinos are located and the revenues of these casinos in 2016.
Hotel Maestral 4 * is located on the Montenegrin coast, in a beautiful fishing village of Przno, near Budva. In the period from the opening (2004) until 2016, it was owned by the Slovenian company Hit Montenegro
1. The hotel has 183 rooms, 22 apartments and 398 beds (
Ministry of Sustainable Development and Tourism 2017). Since 2016 there has been a change of ownership and the former hotel Maestral 4 * has been reconstructed and given five stars. Both the hotel and casinos, since their emergence until the present day, have been renowned for their high-quality offerings. The largest number of tourists who are also casino players, have come from Italy, and since the reopening in the middle of 2017, the Chinese make a significant share as well. Regardless of the fact that the hotel has been open for public since the middle of this year, the casino worked during the reconstruction of the hotel and we see from the previous table that it has achieved its best results during 2016. Please note that one of the crucial reasons for hotel sales was the state tax policy that negatively affected the casino business in Montenegro. However, having realized that such a policy has not been fruitful, the legal regulations in this segment have been altered. This type of issue would be interesting to analyze more, as
Mason and Stranahan (
1996) and
Gu et al. (
2016) have done.
Hotel Avala 4 * is also located on the Montenegrin coast in the center of Budva, which is the metropolis of Montenegrin tourism. The hotel has 181 rooms, 122 apartments and 664 beds (
Ministry of Sustainable Development and Tourism 2017). Although under the same roof, the hotel and the casino are divided into two companies for easier financial monitoring. From 2016 to 2020, the company Casino Avala doo has signed a contract of cooperation with the well-known Turkish company Merit, which took over the management of the casino. With this respect, Avala Casino is represented under the name Merit Avala.
Casino Royal is located in the first Montenegrin 5 * hotel, Splendid. The Hotel and the casino are located on the beach of Bečići, one of the most beautiful in the Mediterranean, not far from Budva. The hotel has 322 rooms, 19 suites and 688 beds (
Ministry of Sustainable Development and Tourism 2017). It is the first 5 * star hotel in Montenegro and one of the most exclusive in southeastern Europe. The casino of the hotel is owned by Jack Pot doo which, as well as Casino Avala doo, has concluded an agreement with Merit in 2016.
Within the Hotel Hilton 5 *, which is located in the heart of the capital, Podgorica, the hotel has 157 rooms, 23 suites, and 360 beds. Within the hotel is Casino Montenegro. Casino Montenegro, like the Royal Casino, is owned by Jack Pot doo, and since 2016 it is under the management of Merit.
Hotel Queen of Montenegro 4 * also has a casino owned by the company Jackpot doo. The Hotel and Casino are located near Hotel Splendid, i.e., the Bečići beach. The hotel has 222 rooms, 14 suites and 482 beds. The following table illustrates the equipment of casinos in Montenegro (
Table 4).
We see that this is a modest offer for the development of casino tourism in Montenegro compared to, for example, Perla (Nova Gorica, Slovenia), which owns 979 slot machines including electronic roulettes, 90 game tables, special open-air and private rooms (
Casino Perla 2017).
The reinterpretation of anonymous interviews that we explained in detail in Methodology and Sample speaks of the modesty of current casino offerings in Montenegro.
The following
Figure 2 shows us that casino players have given the highest evaluation to the kindness of the staff (7.31/10), then the comfort, interior, staff professionalism, price-quality ratio. The general mark of casino players’ satisfaction with the current offerings is 6.15 (of 10).
Further, we can notice that casino players have evaluated the development of casino tourism in Montenegro unfavorably, as well as the diversity of supply and the potential of Montenegro to compete with attractive tourist casino destinations such as Slovenia. More than 80% of the interviewed casino players have stated that the best casino is Maestral, which can be noticed by the earnings of this casino (
Figure 2). As the main barriers to the development of casino tourism in Montenegro, among others, the players state the following:
Insufficient state support,
Incompetent staff,
Not respecting ethics in casino business (predisposition to fraud),
Relatedness of subjects (lack of cooperation between casinos, hotels, agencies, carriers),
Non-existence of casino tourism development strategy in Montenegro,
Non-existence of marketing strategy for development of casino tourism in Montenegro.
The above statements give us the right to conclude that casino offerings in Montenegro are not sufficiently developed, or promoted to attract more wealthy tourists.
When we talk about effects of developing casino tourism, we saw that Montenegro has economic benefits of casino tourism. However, based on the experiences of developed casino tourism destinations, a number of negative, primarily social, consequences of the casino industry can be noticed. Some of them are: an increase in crime rates and the frequency of gambling-related crime, increase of drugs consumption and prostitution, increased number of vehicles, traffic jams and air pollution, as well as the reduction of free public spaces and green spaces due to the construction of a number of casino hotels and complementary entertainment facilities.
Furthermore, there are also negative economic consequences of the casino tourism. Although the development of a casino business provides opportunities for new jobs, negative repercussions can also be seen in the field of employment. One of them is an increase in the number of high school students and university students leaving school due to good opportunities for employment in the gambling industry. Also, many people decide to change their jobs and to switch to the casino industry, due to higher income, which results in the lack of highly skilled workers in many professions. Development of the casino industry is also accompanied by the increase in the cost of living and housing and the constant rise in inflation rates.
Additionally, it should be emphasized that the Governments usually provide global gambling companies with various privileges such as tax reduction, that negatively affects the economy, and even the changing of legal frameworks, which can affect the stability and the overall confidence in the legal and political system of the country.
Decisionmakers in casino tourism industry in Montenegro should analyze all above-mentioned variables and develop appropriate strategies to avoid these negative effects.
In addition to the aforementioned economic, social and environmental impacts of casino tourism on Montenegro, we must especially emphasize the importance of the relationship between casinos and money laundering phenomenon. Actually, casinos represent for criminal groups an effective tool for laundering “dirty” (illegally earned) money. Significant risk factors in this industry include the prevalence of cash transactions, accessibility to multiple premises and anonymity on the part of the customer. Money laundering has a devastating impact on the society, because it destabilizes the legal economy, and it is a risk to the fundamental principle of free competition, producing in the medium-long term devastating negative effects not only from an economic point of view but also from a social one. How to stop illegal transactions is the greatest challenge for the Montenegrin government. The Montenegrin anti-money laundering law will be amended soon.
For a better illustration of actual development of casino tourism in Montenegro, we identified a number of key advantages: luxury hotels with 4 and 5 stars that offer casinos, a high-quality and young workforce, growth of income of companies, growth of public revenues, growth of income of local people, excellent new casino area, variety of offers in small space, climate and geographical position, natural values, cultural and historical heritage, hospitality of the local population, food and drink, favorable ambience for investments, developed IT infrastructure, good relations with neighboring countries, new casino destinations, closeness to important European metropolises, economic benefits for the destination and the state budget, and foreign casino management with many years of experience in this field, such as Hit Nova Gorica and Merit Casino.
As key disadvantages of casino tourism in Montenegro, we recognized: negative impacts, increase in crime, prostitution, drug use, lack of protection measures for local population, undefined ethical codes of casino tourism, undefined product of casino tourism, lack of strategy for development of casino tourism, lack of control mechanisms, bad connectivity of Montenegro and other destinations, non-existence of educational programs in this field, a small number of experts, the emergence of money laundering, the increase in the gap of the rich and the poor and the north and the south, and poor connectivity between the public and the private sector in the field of casino tourism.