Luxembourg, known for its picturesque landscapes and finance industry, may not be a gambling hub, but illegal slot machines are generating over €100 million per year in gross turnover. This alarming revelation is particularly concerning given the country’s lack of data on the total number of illegal slot machines, the businesses that operate them, and their estimated turnover. The absence of information raises doubts about the efficacy of regulatory measures in place.
Illegal slot machines
The Ministry of Justice has identified two types of slot machines – those that operate based on the pinball principle and actual gambling machines. While the former is legal and allowed to operate in public spaces, the latter is illegal, except for those operated by the National Lottery. However, illegal slot machines can still be found in unexpected places.
To address this issue, the National Lottery launched a pilot project in 2019 to set up its slot machines in bars and cafes to curb illegal competition. However, the pandemic caused delays, and only 430 Video Lottery Terminals (VLTs) have been installed in 185 locations. Though HORECA retailers are the primary VLT retailers, the concept has been tested in other sectors.
Despite the National Lottery’s efforts, an estimated 2,500 illegal slot machines continue to operate in Luxembourg, generating substantial revenue that goes untaxed into private pockets and, in part, into organized crime. Reports suggest that the National Lottery loses €20 million annually in this manner, a significant amount that could have benefited civil society.
Moreover, the proliferation of illegal slot machines could be attributed to the limited number of legal gambling establishments in the country. The only establishment exempt from the gambling ban is the Casino 2000 in Mondorf-les-Bains, apart from the National Lottery.
In conclusion, the increase of illegal slot machines in Luxembourg is a matter of grave concern. The Ministry of Justice must gather more data on the number and type of businesses that operate slot machines, their turnover, and the effectiveness of regulatory measures in tackling illegal competition. Additionally, increasing the number of legal gambling establishments in the country could help reduce the demand for illegal slot machines, and curb the associated problems.