Some investments just don't pan out, and that's what's happened with Loto-Quebec investments in casinos in France.
Loto-Quebec is effectively in charge of all gambling-related business for the province, and that includes making difficult Quebec online casino decisions as well as making investments in gambling companies world-wide to increased revenue over time. Some of their moves have been questioned from time to time, but recent news of them dumping their share in JOA Group Lyon is giving people an easy target to go after when criticizing them.
Back in 2006, Loto-Quebec invested about $87 million in a French company called JOA Group Lyon which owns and operates a number of casinos in France. This investment was worth more than $120 million in 2009, and today it's worth nothing. JOA had not been operating in a way that allowed them to be profitable after a number of big blows that hurt their earnings, and they currently have a total debt of more than $600 million.
There are two major reasons why the earnings for these casinos were so limited. First is that a major recession hit not long after the initial investment that really dragged things down from the levels of growth that were projected. Second is that laws prohibiting smoking in casinos were enacted that further lowered the number of people coming in to play. Combined with other factors, they were handicapped from almost the beginning, and there's not really anything that could have been done about it. Despite the fact that there may be a number of things that can be fairly criticized about Loto-Quebec, losing on this investment is one of the things that really couldn't be helped.
For now, they will be keeping an interest in two casinos. One of those has already been shown to be profitable, and the other will be launching soon. They own a total of 35 percent of the shares of these two locations, and hopefully they will turn out better than their total investment in JOA as a whole. We'll have to wait and see, but for now it's looking like Loto-Quebec's French investments are stabilized and ready to show some growth in upcoming years.
Be the first to know about new online casinos, the latest free slots games and receive exclusive promotions. We guarantee privacy, so your email is safe and secure.