The development of a mega casino project in Ellinikon, Greece, projected to make around EUR 6 billion over 30 years is facing difficulties. As reported by the Greek City Times (GCT), the investors Hard Rock and GEK TERNA have been asked by the Banks to agree upon the financing terms different to those initially agreed, which reportedly impacts the sustainability of the entire project.
EUR 250 Million Investment:
As reported, the Ellinikon casino project project refers to the development of a 5-star hotel with 3,500 accommodation units on an area of 120,000 square meters. The development should reportedly feature a conference and showroom center, 10,000-seat arena, and 15,000 square meters of gaming space. According to the initial agreement, the investors agreed with the Banks to invest EUR 250 million in the development of the property.
Banks Asking For Additional EUR 120 Million:
However, the source reports that the Banks involved in the deal have requested Hard Rock and GEK TERNA to pump the additional 120 million euros in the development. The investors reportedly declared withdrawal from the project but the Government doesn’t want them out. As reported, the Greek State expects to generate 6 billion euros of revenues over 30 years, with fiscal benefit estimated to exceed 200 million euros per year for the same period.
EUR 6 Billion Expected by Government:
According to the source, the Government expects to collect €3 billion from gaming tax revenue, €1.1 billion from social contributions, as well as €800 million from income tax. The top government officials are reportedly highly interested to move forward the project that may additionally generate €500 million from VAT and €600 million from municipality fees, as well as from the respective 30-year concessions.
Complex Project:
National Bank and Alpha Bank are reportedly asking for an additional investors’ financial engagement, with Piraeus Bank assuming the role of mediator to drive the project forward, according to GCT. Bank executives reportedly said: “This is a complex project, the likes of which have not been done in Greece and which require significant capital.” GCT also reports that the executives admitted they have asked the investors for additional funding.
Mediators:
The alternative solution to push the project reportedly includes the Recovery Fund capable of covering a 350-450 million portion of the investment. The company’s head, Mrs G. Peristeris, reportedly said that “the group will also seek to secure loan funds for selected projects and his investments.” However, she didn’t directly refer to the Ellinikon Casino project, according to the source.
Also, Michael Karloutsos, the son of Alex Karloutsou – the Greek Orthodox priest allegedly close to the current US president, Joe Biden – has reportedly acted as an intermediary between Hard Rock and the Greek authorities. But, according to GCT, his involvement has been referred to as a ”broken phone” between investors and banks. However, the source reports that Karloutsos was commissioned by Hard Rock to handle the ”Casino in Ellinikon” project during the former government’s mandate and that his close relations with the opposed political party are now reportedly bringing his role down.
Project Pending Issues:
The latest developments follow the issues that the project was facing from the start. According to the source, the problems occurred already in the tender process which was delayed and finally completed on 13 October 2020. As reported, Hard Rock was left out of the process and had to legally return the bidding result. Hard Rock CEO, Jim Allen, reportedly stated at the time that the process was unfair from the start.
But, as reported, the company eventually formed a joint venture with GEK TERNA on the 51:49 stake basis to engage in development of the casino property in Ellinikon. However, the project is now put on hold by the banks asking for contributions, the investors looking for the way out, and the mediators trying to move the project forward. One thing is for sure – all of them are looking for the solution.