Losing streak

EACH hoping to win, and earn a lucrative contract with an Italian fashion house, earlier this month five aspiring Chinese models pranced along a catwalk in the ballroom of the casino in Campione d’Italia, a tiny Italian enclave in Switzerland. Around 500 Chinese residents in Italy were guests at the spectacle—broadcast on Chinese television—in Europe’s largest casino, a hulking yellow building looming over Lake Lugano.

In the gambling business it is generally a safe bet that “the house always wins”. However, the municipally owned casino managed to lose €40m ($54m) in 2011 and a further €28m last year. Business has since improved, slightly. As revenues in Italy’s four other casinos (two in Venice, the others in Valle d’Aosta and San Remo) declined in the first half of this year, those of Campione d’Italia rose by 0.5% to €46.5 million.

Carlo Pagan, its managing director, blames competition from other forms of gambling, the recession and austerity in Italy, which provides 85% of its visitors. Surrounded by Switzerland, it pays its staff in Swiss francs, which have strengthened against the euro. To avert bankruptcy it has cut staff working hours, though a politician in Como, the Italian province of which Campione d’Italia is part, still thinks it “overpaid and overmanned”. Its coffers have also been drained by the €60m a year it has had to pay the municipality (of a town with just 2,000 or so inhabitants). Only recently has the law been changed so that this fee can be renegotiated.

The new casinos popping up across Asia, from Tokyo to Manila, are seeking to lure the growing hordes of Chinese gamblers who can afford foreign trips. This month’s fashion show is part of Campione d’Italia’s effort to court them. Efforts are also being made to attract Russian high-rollers. There is certainly plenty of new money around, but also plenty of competition to attract it.