Over the past seven years with a change of administration the Casino du Liban in Beirut has increased gross gaming revenues from US$80 million in 1998 to US$130 million last year, netting a healthy profit of US$30 million in 2005. Chairman Elie Ghoraieb credited the success with the adoption of various measures to cut waste and excess employee numbers, and the repayment of bank loans obtained for financing the rebuilding of the casino in 1996. Loan sharks were banned from the casino in 2004, resulting in a revenue increase of over US$13 million.

The Casino du Liban is 52% controlled by Intra Investment Company, which in turn is 48% controlled by the Finance Ministry and Central Bank. For the first time in 30 years, US$100 million will be distributed to shareholders once the company accounts have been approved by auditors. This is facing a delay because of an ongoing dispute the casino has with the Finance Ministry over a tax claim. The Finance Ministry has ordered that the casino pay LBP64 billion (US$42.5 million) in back taxes on slot machines.

In a 30-year contract with the casino, 30% of gross revenue goes to the Finance Ministry. The dispute stems from a disagreement over whether this applies only to gaming table revenue or includes slot machines. According to the casino, the contract clearly stipulates that the government should only get LBP1,000 (US$0.67) for each slot machine annually. Over the last seven years the Finance Ministry has received US$250 million in direct and indirect tax.

The case has now been referred to the Shoura Council, the highest legal body, for final judgement. There are already contingency arrangements in place with Lebanese banks should the casino be ordered to pay. The Lebanese government is considering selling its share of Intra Investment Company as part of its privatization programme. (E-03.30.06)

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