Albania to ban all casinos, sports betting shops in residential areas

Albania to ban all casinos, sports betting shops in residential areas

TIRANA, Oct. 10 – The Albanian government says it will also ban sports betting shops from residential areas starting next January in addition to a warned relocation of electronic casinos in a bid to curb a booming phenomenon which costs

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World Bank: Albania is not immune to Turkey, global trade tensions

World Bank: Albania is not immune to Turkey, global trade tensions

TIRANA, Oct. 9 – Albania is almost immune to current global trade tensions between leading economies and Turkish market volatility to the Western Balkans, but a possible escalation of trade conflicts between key players could also affect the small Albanian

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Ambassador Schutz: Rule of law, business climate reforms essential for more German investment

Ambassador Schutz: Rule of law, business climate reforms essential for more German investment

TIRANA, Oct. 9 – Germany says Albania needs to continue reforms strengthening rule of law and improving the business climate in order to become more appealing to German investors considering huge untapped potential in a series of sectors. German Ambassador

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2019 fiscal package: Albania to apply lower dividend, personal income taxation

2019 fiscal package: Albania to apply lower dividend, personal income taxation

TIRANA, Oct. 8 – A cut in the dividend tax, a slight reduction in the tax burden for high income earners and an increase in the mining royalty on chromium exports are the main changes the government is planning for

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Turkey’s Albtelecom likely to buy Telekom Albania

Turkey’s Albtelecom likely to buy Telekom Albania

TIRANA, Oct. 4 – Turkey’s Albtelecom is the most likely company to acquire Telekom Albania following an apparent refusal of the Telekom Serbia offer on security grounds. Sources quoted by Scan TV say Albtelecom, which already operates in Albania’s mobile

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Albania commercial banks reduced to 14 following mergers and acquisitions

Albania commercial banks reduced to 14 following mergers and acquisitions

TIRANA, Oct. 4 – Two commercial banks in Albania have been rebranded following mergers and acquisitions that have now officially reduced the number of banks operating in the country to 14 following a decade of 16. Starting October 2018, the

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Central bank governor hails Eurobond issue as success

Central bank governor hails Eurobond issue as success

TIRANA, Oct. 4 – Albania’s central bank governor Gent Sejko has described the Eurobond issue as a success for the country’s public finances and public debt reduction agenda after Albania borrowed €500 million in a 7-year bond at a rate

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Albania reportedly turns down Telekom Serbia offer on security concerns

Albania reportedly turns down Telekom Serbia offer on security concerns

TIRANA, Oct. 3 – The possible takeover of Albania’s second largest mobile operator by Serbia’s state-run Telekom Serbia will apparently not receive the okay of the Albanian government due to concerns over national security in a sensitive sector such as

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Chinese investors upgrade Albania investment plan as oil prices pick up

Chinese investors upgrade Albania investment plan as oil prices pick up

TIRANA, Oct. 3 – As oil prices gradually pick up from the mid-2014 slump, Albania’s largest oil producer is planning to speed up its investment and drill dozens of new oil wells in foreign direct investment that could trigger more

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Albania raises €500 million at 3.5% rate in new Eurobond

Albania raises €500 million at 3.5% rate in new Eurobond

TIRANA, Oct. 3 – Albania successfully tapped international markets to raise €500 million in its third ever Eurobond at an interest rate of 3.55 percent, down 2.2 percent compared to three years, in an issue which the Prime Minister described

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                    [post_content] => TIRANA, Oct. 10 - The Albanian government says it will also ban sports betting shops from residential areas starting next January in addition to a warned relocation of electronic casinos in a bid to curb a booming phenomenon which costs Albanians more than a hundred million euros a year and has a series of negative economic and social effects for one of Europe’s poorest countries.

The ban on the booming sports betting industry comes following a two-year extension to a law disciplining gambling in downtown areas by relocating electronic casinos to the outskirts and setting a 100 meter aerial distance for sports betting shops from religious or educational institutions and from each other. Initially scheduled to become effective in January 2017, the legal changes were postponed for January 2019 in apparent successful lobbying by a booming industry that employs thousands of people and generates more than a hundred million in income.

"Starting December 31, all electronic casinos will cease their operations under the gambling law. Today's (Tuesday) change also involves sports betting as well as any bet for every kind of race involving horses, dogs or any kind of slave of the Albanian fauna," Prime Minister Rama told journalists following a government meeting.

“Starting January 1, no shutters will open for betting and as already envisaged by the current law and no shutters will open for electronic casinos in any residential area in the 28,000 km2 of the Republic of Albania,” added Rama.

The government says it is also working to discipline online gambling and immediately implement a ban on gambling advertising which it says has been largely ignored by the media.

Finance minister Arben Ahmetaj had earlier warned the legal changes would only affect electronic casinos, but not sports betting shops which were initially set to be reduced at a distance of not less than 200 meters from each other next January even in downtown areas.

His comments came last September as the ruling majority approved some changes to the gambling law, also unifying taxation to 15 percent of gross earnings even for the loss-making Austrian-run National Lottery which in 2013 was given a 10-year licence to organize Albania’s first ever national lottery and offered a 10 percent tax rate.

The legal changes were initially vetoed by the country’s president who argued they failed to discourage a booming business with negative effects for the country’s economy and society.

 

Expert hails initiative

Economy expert Arben Malaj has hailed the government decision against a booming industry that was having costs for Albanian households through an increase in the number of divorces and crime rates.

"We have to admit that there is no other country, either from Eastern Europe to have such massive gambling invasion in downtown areas, next to schools and everywhere, making it easy to become a victim,” Malaj, a former finance minister, has told a local TV.

"This industry is controlled by experts who manipulate even psychologically, so that the ones who gamble become victims. That's why it has turned into a national concern and in this respect the measure is adequate," he adds.

Already adopted legal changes limit the geographical location of casinos only to areas determined for tourism development or five-star hotels or tourist resorts and while new amendments are also set to relocate the booming sports betting shops in the outskirts.

 

Relocation effects

The relocation of the gambling industry to rural non-populated areas is an old initiative that is finally being implemented following consecutive delays in the past five years.

If strictly implemented even for sports betting shops, the relocation to rural areas is expected to provide a severe blow to a booming industry which last year generated more than €130 million in income and paid about €50 million in taxes, not to mention a significant reduction in staff and massive closure of coffee bars that served as betting shops.

However, Albanians would practically have more disposable income and negative social effects associated with gambling would sharply reduce.

Albania had more than 3,900 betting shops at a rate of 1 per 730 local residents this year, setting a European record, according to data obtained by local media.

 

Transfer saga 

Transferring casinos outside Tirana is an initiative that began in 2012 when former Tirana mayor Lulzim Basha, the current leader of the main opposition Democratic Party, imposed higher tax burden for casinos operating in downtown Tirana, but failed to displace them outside Tirana, including the country’s sole casino that still operates in the city center.

Back in October 2013, soon after Edi Rama took office as the country’s Prime Minister, he initiated a nationwide campaign dubbed “The End of Madness” that closed down dozens of illegal gambling businesses, vowing zero tolerance to an activity which he said “cannot be the future of the country even legally.”

However, five years on, gambling remains a booming business and casinos and betting shops have grown in numbers and are even found close to schools or religious institutions.

Albanians reportedly spent a record 16.6 billion lek (€132 mln) in gambling in 2017, up 10 percent compared to the previous year, according to turnover data reported by the main electronic casino, lottery and sports betting companies.

Gambling is a booming business in Albania and varies from lotteries, electronic casinos and more numerous sports betting shops. A gambling law, which has been in force for several years, bans people under 21 from entering betting shops, but regardless, teenagers are often seen there.

The booming gambling businesses is often linked to gangs laundering crime and drug proceeds. There have been also cases when even senior officials and judges have justified some of their income through winnings in betting shops or casinos in their wealth declarations.

 
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                    [post_content] => TIRANA, Oct. 9 - Albania is almost immune to current global trade tensions between leading economies and Turkish market volatility to the Western Balkans, but a possible escalation of trade conflicts between key players could also affect the small Albanian economy as it did in the aftermath of the 2008-09 global financial crisis.

Due to stronger trade and investment ties with Turkey, a possible escalation of the crisis in Turkey, where the Turkish lira has lost about 40 percent of its value against the US dollar this year could affect Albania more than the current round of trade disputes involving the United States, China and other U.S. trading partners, which a World Bank report says may create both opportunities and risks for Western Balkan countries.

Examining the channels for the transmission of Turkish market volatility to the Western Balkans, a recent World Bank report shows Albania is little exposed in terms of exports, but to a higher degree if imports, foreign direct investment and the banking sector assets are concerned.

The report shows Albania's exports to Turkey, mainly involving steel from a Turkish steelmaker operating in the country, account for only a modest 0.8 percent of Albania's total exports. Imports of goods and services from Turkey are bigger at 5 percent of the total.

Trade exchanges between Albania and Turkey are at about 50 billion lek (€395 mln) annually, representing 6 percent of Albania’s total but overwhelming dominated by Albanian imports from Turkey, according to INSTAT, the Albanian statistical office.

Meanwhile, the stock of Turkish FDI to Albania, at €565 million in mid-2018, represents about 8 percent of total FDI stock in Albania, according to Albania's central bank.

Turkey is more actively engaged in Albania's banking sector, with the country's largest commercial bank, Turkish-owned BKT, accounting for 28 percent of banking assets in the country, but not estimated to pose any significant risk due to operating as a separate legal entity and with modest exposure to Turkish government lira-denominated securities.

The report describes Turkey as a key economic partner in the Western Balkans, a region it once ruled for centuries under the Ottoman Empire until the early 20th century with trade, investment and banking ties stronger with Kosovo and Albania as a share of the respective countries' total, rather than former Yugoslav countries.

While current contagion risk is estimated as manageable, the World Bank warns a possible escalation of the crisis in Turkey could also negatively affect investment flows to emerging markets such as the Western Balkans, an EU aspirant region of some 20 million consumers where investment flows are already hampered by perceptions of weak rule of law and corruption.

“The risk of contagion is manageable, with the main channel of potential impact through capital flows into emerging markets. The risk of contagion through the banking system is small. Should there be a risk through Turkish private sector borrowing from European banks, the banks are well-capitalized, with access to funds still easy. Although the high presence of Turkish banks in Albania and Kosovo is an additional risk, these operate as separate legal entities and are subject to national monitoring and safeguards,” says the World Bank report.

World Bank experts say the main risk is the contagion through investor aversion to emerging markets, which may prompt them to sell riskier assets as investors search for yield in the low interest rate environment. “Like other emerging markets, Western Balkans countries are vulnerable to contagion from the capital markets,” adds the report.

The sharp decline of the Turkish lira against the US dollar, also hit by a diplomatic spat with the US, has seen inflation register record high of about 25 percent in Turkey and its economy is now expected to grow by 3.5 percent in 2018, less than half of last year's 7.4 percent expansion.

The IMF says it expects Turkey's 2019 GDP growth to drop to a mere 0.4 percent, warning that "the challenges that Turkey faces will require a comprehensive policy package comprising monetary, fiscal, quasi-fiscal, and financial sector policies."

Recessions in Italy and Greece, Albania’s main trading partners, top investors and the hosts of 1 million Albanian migrants, had a series of negative effect on Albania through lower trade, investment and remittance flows in the aftermath of the 2008-2009 global financial crisis.

Albania’s GDP growth has only in the past couple of years picked to about 4 percent after avoiding recession, but growing between 1 to 3 percent for about 8 years until 2016. Experts say the country needs to grow by 6 percent annually in order to produce tangible and all-inclusive growth.

 

Possible spillovers from global trade tensions 

The World Bank says the current round of trade disputes, involving the United States, China, and U.S. trading partners, may create both opportunities and risks for the Western Balkans, but pose a threat to Albania’s steel and aluminum exports to the US, estimated at about $20 million a year.

"Tariff surcharges on U.S. imports of particular categories of goods, to the extent that they are global or near-global, could reduce U.S. imports from the Western Balkans to the extent that Western Balkan countries actually export any of these goods to the U.S.," says the World Bank.

“EU imports from the Western Balkans of goods targeted from the U.S. are dominated by iron, steel and, aluminum products, apparel, furniture, and cereals. The share of all EU imports from the Western Balkans that appear on the targeted list is significant, ranging from 4.1 percent for Macedonia to 10.7 percent for Albania,” it adds.

Considering that current tariff actions are targeted against specific countries, the World Bank says there might also be an opportunity for Western Balkan exports to increase because they might partially substitute for targeted goods previously imported from the U.S. or China.

“However, if escalation of trade conflicts and accompanying uncertainty leads to a significant global decline in investor confidence, all regions of the world would be harmed,” it adds.

 

GDP growth forecast 

The World Bank has upgraded its 2018 growth forecast on Albania to 4 percent supported by weather-related spike in hydroelectric power production and a strong tourism season but expects medium-term growth to slow down to 3.5 percent with risks to the outlook involving the international situation in emerging markets, growth in the EU, and the success of the fiscal consolidation and tax reform.

"Growth in Albania is projected to slow somewhat as private investment decelerates after two large FDI-financed energy projects are completed," says the World Bank which now expects Albania's growth to slow down to 3.6 percent and 3.5 percent in 2019 and 2020 respectively.

Fiscal consolidation, more efficient public spending, and structural reforms are still critical to sustainable and equitable growth, urges the Washington-based financial institutions which has been supporting Albania with a series of projects and reforms since the early 1990s collapse of the communist regime.

The World Bank expects Albania’s poverty rate measured at US$5.5/day in purchasing power parity to drop to about a quarter of population by 2020, down from about 28 percent, but yet remain one of the highest in the region.

Meanwhile, the IMF has also revised upward its 2018 economic outlook on Albania to 4 percent, but expects the country's growth to linger around 3.7 percent to 4 percent over 2019-2023.
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                    [post_content] => TIRANA, Oct. 9 – Germany says Albania needs to continue reforms strengthening rule of law and improving the business climate in order to become more appealing to German investors considering huge untapped potential in a series of sectors.

German Ambassador to Albania Susanne Schutz says Albania has great development potential in several sectors, including tourism, green energy, but also agriculture and services.

“But in all those sectors, it is equally important to create the necessary general conditions for potential investors, be they local or foreign ones. And these conditions first of all include legal security, transparency and a functioning, efficient and non-corrupt administration," says the German ambassador, adding that German investors welcome the vetting process that is scanning judges and prosecutors as part of the justice reform.

"The vetting process strengthens trust in rule of law, considerably contributing to increasing Albania's attractiveness as an investment destination. From the point of view of German business community, those reforms must necessarily continue to be implemented,” Schutz has told local Albanian language Monitor magazine in an interview.

Poor fight against corruption and crime, lack of transparency in public procurement, lack of legal security and unpredictability of economic policies due to frequently changing tax laws and regulations are the top concerns for German businesses operating in the country, in barriers that remain almost unchanged to the previous years, according to a 2018 survey by DIHA, the German Association of Industry and Trade in Albania.

"We still have companies from Germany, that is potential investors for Albania who complain about shortcomings in the information policy and transparency as far as public procurement is concerned or unclear ownership relations at potential investment sites. On the other hand, shortcomings in the track record on arrears in case of public contracts do not have a positive effect on Albania's image as an investment destination," says the ambassador.

About a third of all public procurement in Albania is carried out using the little transparent and limited competition negotiated procedure, making Albania the top Western Balkan country that overuses this procedure, according to a report by the European Court of Auditors, the EU’s independent external auditor.

Tourism is also high on the agenda as a potential sector as more and more German tourists discover Albania.

German tourists, a considerable number of whom include visitors of ethnic Albanian roots, lead tourist growth in Albania this year, with more than 121,000 visiting the country in the first eight months of 2018, up 37 percent compared to the same period last year, according to INSTAT, the state-run statistical institute.

“Albania has great potential in the tourism sector. But it is also clear that it finds itself in a global market with tough competition. Albania's attractiveness as a tourist destination can grow if infrastructure in general such as roads and highways, waste management, illegal construction, sewerage and the quality of service improves. Germany supports Albania in this context with a series of projects such as capacity development on sustainable tourism in mountain areas,” says the German Ambassador.

The German ambassador suggests EU candidate Albania should promote open competition in public procurement, bringing the example of the National Theater bill which has now formally opened a race for the construction of a new theater following a presidential veto and EU recommendations.

“Albania still faces big challenges to handle. For example, The European Commission stance on the National Theater law illustrates the standards that have to be applied in the public procurement sector in Albania,” says the German ambassador.

Last September’s bill review came after a European Commission letter suggested open competition for the controversial project after an Albanian company had already received the okay to demolish an Italian-built WWII theater building in downtown Tirana and build a new contemporary architecture theater in return for being offered public land to build business towers next to it. The main opposition Democrats and a group of artists described the national theater deal as a corruptive affair with an Albanian company with alleged close ties to the ruling Socialists.

“EU accession means that each of the candidate countries assumes the union's normative and legal inventory, the so-called acquis communautaire. In addition to legal standards, this also includes important chapters on the economy such as those on public procurement, competition law and consumer protection. Albania has made steps forward in these sectors also thanks to German and European support,” says the ambassador.

Albania is pending to launch accession talks by next year following a positive recommendation this year, but EU leaders have urged the country’s authorities to continue with rule of law reforms, warning that there will be no automatic opening of talks.

Germany is currently supporting Albania reform its tap waster sector where poor infrastructure and illegal connections contribute to huge losses in non-revenue water and most of Albania having limited access to running water which they guarantee with water tanks.

The German government is also supporting Albania’s key agriculture sector through the Rural Credit Guarantee Fund, encouraging banks and non-bank financial institutions to provide financial services to farmers and rural businesses in Albania on a sustained basis.

Albania is also marking the 12 edition of the German October with a series of events focused on arts and culture following last year's edition marking the 30th anniversary of the re-establishment of diplomatic relations between Germany and Albania.

 

Trade, investment ties

German investors perceive the country's business climate to have considerably improved in the past few years, but yet rate Albania one of the least attractive South East Europe destinations, according to a DIHA survey.

German companies in Albania are engaged in important sectors such as banking, construction, production, retail sales and logistics.

Germany is one of the top 10 foreign investors in Albania but the stock of foreign direct investment from Europe’s largest economy remains quite modest at about €130 million in mid-2018, according to Albania’s central bank.

Europe’s largest economy, Germany has emerged as the second largest trading partner for Albania in the past couple of years with the 2017 trade exchanges accounting for 6.8 percent of the total, the same to neighbouring Greece, the traditional second largest partner of Albania after Italy, according to state-run statistical institute, INSTAT.

Since the late 1980s just before the collapse of Albania’s communist regime, Germany has invested more than €800 million in development projects in Albania, mainly energy, water supply and sewerage, becoming the country’s main donor.
                    [post_title] => Ambassador Schutz: Rule of law, business climate reforms essential for more German investment
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                    [post_content] => TIRANA, Oct. 8 – A cut in the dividend tax, a slight reduction in the tax burden for high income earners and an increase in the mining royalty on chromium exports are the main changes the government is planning for its 2019 fiscal package following some mid-year incentives that are also expected to come into force next January ahead of the expected mid-2019 local elections.

The major change in the upcoming fiscal package includes a reduction in the dividend tax to 8 percent, down from a current 15 percent in a measure that foreign business associations say is expected to provide a positive effect on boosting investment and creating more favorable treatment for employees.

However, some local business associations suggest a zero dividend rate on reinvestment and progressive taxation for companies that operate under monopoly conditions due to concession contracts on specific products and services to prevent the significant outflow of profits from the country.

Finance Minister Arben Ahmetaj says the government will also include anti-evasion provisions on non-capital gains for non-residents in details that will be disclosed later when the fiscal package is officially unveiled.

Foreign companies operating in Albania transfer about €200 million to €300 million annually to their parent companies rather than reinvesting it in Albania, in transfers that often avoid taxation and that has been significantly increasing following the 2008-09 global financial crisis.

A slight reduction in the tax burden for high income earners is another change that the government is proposing following concerns over a hike in tax evasion after Albania abandoned its 10 percent flat tax in 2014 to introduce new progressive taxation on personal income and corporate tax.

The government says some 15,400 employees will benefit lower taxation after progressive taxation of 23 percent is applied for monthly salaries higher than 150,000 lek (€1,188), up from a current threshold of 130,000 lek (€1,030) in an incentive that experts say mostly benefits senior government and public administration officials, but not the private sector where the high tax burden is the main reason for not reporting real wages with the authorities.

Albania currently applies progressive taxation of up to 23 percent on personal income for monthly wages of more than 130,000 lek (€1,017) under a system that excludes the first 30,000 lek (€225) from taxation and applies a 13 percent rate on income from 30,000 to 130,000 lek.

However, only 8,700 individuals, about 1.3 percent of the total workers, declared annual income of more than 2 million lek (€15,600) with tax authorities for 2017 as part of self-declaration process for high income earners on extra taxation purposes.

The third important change that authorities are planning includes increasing the mining royalty on the key chromium exports to 9 percent, up from a current 6 percent in a move that discourages exports of raw chromium and gives a boost to local processing industry where major investment has been made.

Chromium is the key mineral Albania produces, with most exports destined for China, one of Albania’s top trading partners.

Other proposed changes include cuts in the value added for imports of electric buses and VAT exclusions on imports of agricultural machinery and raw material for the pharmaceutical industry.

 

‘Reform-fueled incentives’

Finance Minister Arben Ahmetaj says the tax incentives are a result of reforms and fiscal consolidation that the Socialist Party has undertaken since late 2013 when they assumed power, but the opposition says the business climate has worsened and more businesses are closing and no major foreign investors coming to Albania.

"Everything that the budget and the 2019 fiscal package does is a direct result of what the Prime Minister has put as 'reforms being painful, tough but crucial.’ The salary hike that we are planning in next year's budget for teachers, doctors, military officers, the solidarity package [pensioners], the baby bonus that has never been at those levels to promote demographic growth, free of charge textbooks, progressive taxation, including the uninsured in the universal health care, increasing wages for the public administration again are all a result of reforms,” says Finance Minister Arben Ahmetaj.

However, the main opposition Democratic Party and its allies who have been boycotting Parliament since September in protest of lack of rule of law, say more businesses are closing down due to a high tax burden, rising corruption and PPP contracts awarded to what it calls oligarchs.

 

Businesses want more incentives

Business representatives have called on government to reduce VAT on basic food products and lift the tax on plastic and glass packaging in order to make domestic industries more competitive to imports which are becoming cheaper as Europe’s single currency continues to trade a 10-year low against the Albanian lek.

Business also want a revise downward in the price of electricity, generated at a low cost by state-run operators in cases of favorable hydro-situation and a series of other tax cuts.

However, the perennial requests by the business community are little likely to be taken into consideration at a time when public finances are on a consolidation path in a bid to bring down public debt to 60 percent of the GDP by 2021, down from a current 70 percent of the GDP, a high level for Albania’s current stage of development.

Investors complain a higher tax burden compared to neighboring countries of similar size makes Albania less competitive despite its favorable geographical position.

In addition, widespread corruption and an inefficient judiciary remain key concerns for foreign investors.

The year-end fiscal package follows a mid-2018 package when the ruling majority approved lower corporate income tax for mid-sized businesses and incentives on agribusinesses.

Some 10,000 businesses currently paying a 15 percent profit rate are expected to pay a reduced 5 percent corporate income tax as the turnover threshold for the new 5 percent profit rate increases to an annual 14 million lek (€110,000), up from a previous 8 million lek (€ 63,000).

The emerging agritourism sector is also set to benefit from several tax incentives, including a 5 percent corporate income tax, a reduced 6 percent VAT and exemption from the infrastructure tax on investment.
                    [post_title] => 2019 fiscal package: Albania to apply lower dividend, personal income taxation 
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                    [post_content] => TIRANA, Oct. 4 - Turkey's Albtelecom is the most likely company to acquire Telekom Albania following an apparent refusal of the Telekom Serbia offer on security grounds.

Sources quoted by Scan TV say Albtelecom, which already operates in Albania’s mobile phone market and is the third largest mobile operator, has submitted a competitive bid, which is being considered by Telekom Albania, part of Greece-based OTE Group, where Germany’s Deutsche Telekom owns a 40 percent stake.

The potential Telekom Albania acquisition would make Turkish-owned Albtelecom, the country’s largest operator, overtaking leading Vodafone Albania which has an almost 50 percent share in terms of subscribers and income.

However, the acquisition could reduce the number of operators to two and likely bring problems when the purchase is examined by Albania’s electronic communication and competition watchdogs due to cutting the number of operators to two compared to a previous four until late 2017 when Albanian-owned Plus Communication ceased its operations.

Albtelecom, part of Turkey’s Calik Group which also runs the largest commercial bank in Albania, has been present in Albania since 2000 when it acquired a 76 percent stake in Albania's landline telephone and internet service provider. The Turkish group entered the mobile phone market in March 2011 with the Eagle Mobile operator which two years later was rebranded Albtelecom.

Back in mid-2015 when former AMC mobile operator was rebranded Telekom Albania, Turkish-owned Albtelecom had warned of legal action against Germany’s Deutsche Telekom because of the similarity to its trademark creating possible confusion among customers.
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                    [post_content] => TIRANA, Oct. 4 – Two commercial banks in Albania have been rebranded following mergers and acquisitions that have now officially reduced the number of banks operating in the country to 14 following a decade of 16.

Starting October 2018, the Albania unit of Italy’s Intesa Sanpaolo and its newly acquired loss-making Veneto Banka Albania will be operating as a rebranded Intesa Sanpaolo Bank Albania. The merger only slightly increases Intesa Sanpaolo’s market share in Albania to 12.3 percent of total banking assets in the country due to Veneto Banka’s market share having dropped to a mere 1.38 percent and representing the 13th largest bank in the country at the end of the first half of this year, according to the Albanian Association of Banks.

The merger process comes more than one year after Intesa Sanpaolo, Italy’s largest retail bank, acquired the bankrupt Veneto Banca in Italy and its subsidiaries in several European countries including Albania.

Veneto Banka had nine outlets and 109 employees at the end of the first half of this year, down from 15 outlets and a staff of 132 during the same period last year, according to the banks' association.

Intesa Sanpaolo has been operating in Albania since 2007 when it acquired the American Bank of Albania, the first private bank in Albania established in 1998 by the Albanian-American Enterprise Fund.

Meanwhile, Veneto Banka has been operating in Albania since 2009 after purchasing and rebranding Banca Italiana di Svillupo (BIS Bank), and mainly serves small and medium-sized businesses, especially Italian-run companies who dominate the number of foreign-owned companies in the country.

 

NBG outlets rebranded ABI

Outlets of the former Albanian unit of the National Bank of Greece, the country’s tenth largest bank, have also been rebranded ABI, the American Bank of Investments, as of October 1, 2018 following an acquisition earlier this year.

The early 2018 acquisition by the American Bank of Investments, an Albanian-American bank that has been operating in Albania since 2016, came after NBG Albania had been losing significant market share in the past decade amid financial trouble from its Greece-based parent bank in the aftermath of the 2008 crisis and the worst-ever recession in neighboring Greece.

NBG Albania’s assets at the end of the first half of 2018 dropped to 2.54 percent of total assets in an ongoing downward trend since 2008 when it held a 6.7 percent market share in terms of assets that include loans, investments in securities and placement with banks.

The merger now almost doubles the market share of ABI Bank to 5.43 percent making it the seventh largest commercial bank operating in the country.

The American Bank of Investments, ABI, launched its Albania operations in December 2016 as a rebranded bank after U.S. based NCH Capital Inc, private equity and venture firm took over France’s Credit Agricole’s Albania unit.

 

Series of takeovers

Albania's banking system has been facing a series of takeovers in the past year, with several internal takeovers and mergers and new entrants increasing the share of Albanian capital in the banking system.

Albanian capital in the banking system, estimated at 10 percent at the end of 2017, has significantly increased during this year following the acquisition of two Greek bank units by Albanian-owned banks and companies. Tirana Bank and NBG Bank, both of which units of Greek banks in Albania, held a market share of about 8 percent in terms of assets at the end of the first half of this year.

Last August, Tirana Bank, a unit of Piraeus Bank, Greece’s largest lender, says it has agreed to sell its Albania unit, to Albanian-owned Balfin Group and Macedonia’s Komercijalna Banka for €57.3 million.

Balfin Group is Albania’s largest company which is now diversifying its investment portfolio also in the banking sector after successful operations in the mining, construction, retail trade sectors.

Alpha Bank is now the sole remaining Greek unit operating in Albania following the sale of three Greek-owned units, two of which this year. Its assets of 5.3 percent of total, make it the sixth largest bank in the country. Greek-owned banks held about a quarter of banking assets in 2008 just before the onset of the global financial sector hitting the Greek economy and its banking system.

Last August, the Albania subsidiary of France’s Societe Generale also changed hands as part of a deal the France-based lender has concluded to sell its Bulgarian unit to Hungary’s OTP Bank.

Societe Generale Albania is the fifth largest bank in terms of assets in Albania and the fourth largest in terms of lending.

Several other small banks operating in the country are also reportedly on sale as credit struggles to recover amid sluggish demand and a declining but still high level of non-performing loans of about 13 percent.

Experts say bank consolidation, the process by which one banking company takes over or merges with another, is expected to continue and further reduce the number of banks in the country, but at the same time not affect competition in a market where the four largest banks already hold more than two-thirds of total assets, at 68 percent at the end of 2017.

Experts believe the consolidation process will lead to tougher competition and improved access to banking services at a time when credit still remains sluggish, negatively affected by both tight lending standards applied by banks and poor demand by businesses and households.

However, the restructuring and growing online banking is expected to have a negative impact on bank employees.

The 16 commercial banks operating in the country cut dozens of branches and jobs nationwide last year as lending remained sluggish and e-banking gradually expanded despite banks registering record high profits.

The country’s banking system is considered well-capitalized, liquid and profitable.

Yet, in its latest statement, the International Monetary Fund recommends that “ensuring that new market entrants have solid banking experience and meet fit and proper criteria to operate in the Albanian banking market will be critical.”

The Albanian banking system is overwhelmingly foreign owned but the market share of EU-owned banks has dropped by 15 percent to about 52 percent in the past four years as domestic owned banks expand and EU-owned banks continue deleveraging.

Turkish-owned BKT, Austria’s Raiffeisen and Albanian-owned Credins bank were the top three banks in terms of assets that include loans, investment in securities and interbank placement at the end of 2017.

 

‘A regional phenomenon’

Central bank governor Gent Sejko says EU-based banks leaving is a phenomenon that is affecting not only Albania but the whole region due to tighter measures adopted by the European Central Bank by forcing them to either increase capital or shut down some units.

"Failing to inject or find capital to increase their capital adequacy ratio, those banks were forced to withdraw from the region," Sejko told reporters this week.

"As a regulator of the financial system, we have targeted that this process is accompanied by the consolidation of the banking system and somehow this has had a positive effect because we now have two mergers that have reduced the number of banks to 14 from 16 and this is a positive indicator for the Albanian banking and financial system,” he added.

"Capital adequacy ratio has reached 18 percent and banks have excess liquidity which we target translating into healthy credit for the economy as the Eurobond emission has already provided the government with excess liquidity for its needs. The banking system's liquidity should be oriented toward healthy lending either for households or businesses,” says Sejko.

 
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                    [post_content] => TIRANA, Oct. 4 - Albania's central bank governor Gent Sejko has described the Eurobond issue as a success for the country's public finances and public debt reduction agenda after Albania borrowed €500 million in a 7-year bond at a rate of 3.55 percent, down 2.2 percent compared to three years.

“The Eurobond issue is an indicator of positive assessment of the Albanian economy by international markets. Its emission is a success both for the amount issued - €1 billion was offered despite government needs of €500 million - the interest rate of 3.5 percent and the term," governor Gent Sejko said this week.

"We have to understand that market interest rates change on a daily basis, but this rate is a result of two factors. The first factor involves lower interest rates in international markets. The second factor is the positive assessment of the Albanian economy under conditions when twice as much was offered," said Sejko.

According to him, the Eurobond also has positive effects on the Albanian banking system by orienting local banks toward lending to businesses and households and also sends a positive signal toward foreign investors.

"The important thing is that the Eurobond will not increase public debt. Part of it will be used to pay off old debts and the remaining part will be used in the context of fiscal consolidation. That's why the Eurobond will not have any effect on increasing debt in the mid and longer run. We have an organic law that forces us to move toward fiscal consolidation and continue the debt reduction," Sejko said.

His comments came at a news conference this week when he announced the central bank would continue to keep its key rate at a historic low of 1 percent and that the end of the tourist season had balanced the euro to lek exchange rate even under conditions of lack of intervention by Albania's central bank.

Unlike the previous four months, in its early October monthly meeting, the central bank’s supervisory council did not decide to continue its emergency intervention operations to buy excess euros from the local currency exchange market in a bid to stop Euro’s free fall against the Albanian national currency and prevent a series of negative effects, primarily affecting exports, euro-denominated savings and remittances, but also government revenue.

The Eurobond issue came as Albania’s public debt officially dropped to a five-year low of 65.2 percent of the GDP at the end of the first half of this year, down from about 70 percent of the GDP at the end of 2017, but a faster growing economy and Europe's single currency trading at a 10-year low against the Albania lek and having lost about 7 percent since late 2017 had the main contribution.

External debt, which accounted for 30 percent of the GDP at the end of June 2018 and whose 57 percent was denominated in Europe’s single currency, had a key impact, dropping from 32.8 percent of the GDP at the end of 2017 and an almost record high of 34.26 percent of the GDP at the end of 2016.

The finance ministry, which reports the public debt stock in the national currency, says it calculated the Euro-denominated debt during the second quarter of this year at 125.93 lek, down from an average of 132.95 lek in 2017 and 135.23 lek in 2016.

The Albanian government targets bringing public debt down to a more affordable 60 percent of the GDP by 2021, but international financial institutions have warned the ruling majority’s ambitious but rather controversial €1 billion public private partnership program risks creating new hidden arrears which if included in the public debt stock could leave it unchanged at about 70 percent of the GDP for the next four years.
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                    [post_content] => TIRANA, Oct. 3 - The possible takeover of Albania's second largest mobile operator by Serbia’s state-run Telekom Serbia will apparently not receive the okay of the Albanian government due to concerns over national security in a sensitive sector such as telecommunications and amid fears of the public not welcoming the operator’s arrival over non-positive feelings and perceptions related to tense historical political relations between the two countries.

Telekom Serbia is reported to have submitted the highest bid for the purchase of German-Greek owned Telekom Albania, with an offer of €60 million, beating Turkish, Greek, Czech and Bulgarian investors in tender held on Sept. 17, according to Albanian and Serbian media.

Telekom Albania, where German giant Deutsche Telekom owns a 40 percent stake through Greece-based OTE Group, is the second largest operator with a market share of 36 percent and one of the three remaining operators after Plus Communication, the sole Albanian-owned operator, ceased its operations at the end of 2017 after selling its shares to Telekom Albania and Vodafone Albania.

The sale of Telekom Albania comes after a hike in losses in 2017 and Albania's mobile phone market having embarked on an ongoing downward trend since almost a decade, triggered by tougher competition and smartphone apps replacing traditional phone calls and text messages.

Turkish-owned Albtelecom, which runs the country’s third largest mobile operator, is also reported to have submitted a bid along with Czech PPF Group and Bulgaria’s Vivacom.

Sources quoted by local media say the Albanian government has not welcomed the Serbian state-run company's offer following a meeting of Telekom Serbia officials with Albanian government representatives due to security concerns.

"The arrival of Telekom Serbia in Albania is not welcome. Even though the decision is among companies, the involvement of Telekom Serbia in the Albanian mobile telephony market could spark reactions that would have a negative impact even for the company itself. We are willing to welcome Serbian investors in the country but prefer an investor with another profile for this sector," unnamed government sources are quoted as saying by local Albanian Ora News TV.

Meanwhile, Belgrade-based Danas newspaper says Telekom Serbia is politically motivated to acquire Telekom Albania and there are indications of "non-business motives" behind the unreasonably high bid.

According to a Danas source cited by Serbian Monitor English-language portal, there are indications that the offer of the Serbian company is based on “non-business motives since it gave an unreasonably high bid”.

"The [Danas] source also claims that Telekom Serbia has strong political support and that the Serbian authorities, through their German counterparts, appealed to Deutsche Telekom to soften the Albanian government and regulatory bodies to accept the Serbian offer,” says the portal.

The entry to Albania of Telekom Srbija, which also operates in Bosnia and Herzegovina and Montenegro, would mark the first major Serbian investment in Albania, where Serbian investment is quite modest, amid tense political relations over Kosovo, the ethnic-Albanian country which declared its independence from Serbia a decade ago.

The concerns related to security grounds are a result of both Albanians and Serbians perceiving themselves among top threats and enemies despite political relations having significantly improved in the past few years and the civil society in both countries contributing to the normalization of relations between two countries that are considered key to the region’s stability and peace.

Relations between the two countries temporarily entered a Cold War era status quo in October 2014 following a drone incident with Albanian nationalistic and patriotic symbols flying over the Partizan stadium in Belgrade in the midst of a Serbia-Albania Euro 2016 qualifier.

Some Albanian security experts have also opposed the entry of mobile operators from non-EU and non-NATO member countries in sensitive sectors such as telecommunications.

A sale deal on Telekom Albania would also have to receive the okay of Albanian state-run regulators such as the electronic communications and competition watchdogs.

 
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                    [post_content] => TIRANA, Oct. 3 – As oil prices gradually pick up from the mid-2014 slump, Albania’s largest oil producer is planning to speed up its investment and drill dozens of new oil wells in foreign direct investment that could trigger more than a hundred million dollars and partly compensate for major-energy related projects already in their final investment stage.

Bankers Petroleum, which has been run by China’s Geo Jade since mid-2016 when it was taken over from Canadian investors, says it has raised its 2019 investment plan to about $150 million as international crude oil prices have currently hit a four-year high of about $80 a barrel, gradually recovering from a 12-year low of $30 a barrel in early 2016 after dropping from as high as $115 in mid-2014.

Bankers Petroleum operates the Patos-Marinza, one of Europe’s largest onshore heavy oilfields under a 25-year concession deal with the Albanian government which expires in 2029, and accounts for 90 percent of domestic oil production, the majority of which is exported in crude oil and a smaller portion goes to supply a local refiner.

"For the next year, we have planned more than US$ 150 million in investment which means more production, more income for us, the local and the central government," Xingyun Sun, the executive director of Bankers Petroleum is quoted as saying by local media.

Bankers Petroleum says it is drilling 40 new oil wells and investing $90 million for this year following a freeze in its drilling operations in 2016 and 2017 due to unfavorable oil prices.

"We have ambitious plans for the future. At the end of this year, we expect to carry out $89 million in capital expenditure and reach a general production of 780,000 metric tons from the Patos-Marinza oil field. With stable liquidity and Brent oil prices of $70 to $75 a barrel, we expect to drill more than 80 new oil wells for 2019," Xingyun Sun has told local Monitor magazine.

The renewed investment could also compensate for the expected decline in foreign direct investment as TAP and the Devoll Hydropower, the two major energy-related investment that drove FDI and economic growth in the past four years, are set to complete their investment stage by early 2019.

Current production from the Patos-Marinza oil field is estimated to have recovered to 15,000 barrels of oil a day and prices are favourable at a 4-year high. However, due to the poor quality of domestically produced oil that needs heavy refining, Bankers Petroleum usually sells crude oil at about a third below Brent prices.

The 2004 concession deal with Bankers Petroleum gave a boost to Albania’s oil industry which was collapsing under state management following the early 1990s transition to a market economy.

The post-1990s domestic oil production peaked in 2014 just before the mid-year slump in international prices when the Bankers Petroleum-led domestic production hit a 35-year high of 1.36 million metric tons.

However, Albania’s highest oil production dates back to 1974 when the then-communist country produced 2.25 million metric tons equal to about 38,408 barrels of oil per day in an industry that involved 34 state-run enterprises and employed about 25,000 people.

 

Bankers turns profitable

Brent oil prices picking up to an average of $50 a barrel allowed Bankers Petroleum to turn profitable again following two years of significant losses amid a sharp drop in oil prices.

The Chinese-run company posted profits of about 586 million lek (€4.6 million) in 2017, following losses that peaked to 5.7 billion lek (€45.3 million) in 2016 and record high profits of about 11 billion lek (€86.5 million) in 2014, according to financial reports filed with Albania’s National Business Center.

Bankers Petroleum’s finances are also expected to recover following an arbitration court ordering the Albanian government to pay back the oil producer over a tax dispute.

Bankers Petroleum says it is still negotiating with the Albanian government over a solution for being paid back or refunded over the tax dispute after an international arbitration court ruled in favor of Bankers.

The negotiations come as Paris-based International Chamber of Commerce ruled last February the Albanian government will have to pay back Bankers Petroleum $57 million (€46.5 mln) over a tax dispute dating back to 2011.

 

 Headquarters move to Albania

Bankers Petroleum says it has transferred its headquarters from Canada's Calgary to Albania’s Fier region, where its oil production and drilling operations are based, in order to speed up its decision-making and strengthen cooperation with the central and local government as well as local community.

The decision follows the late 2016 purchase by Chinese investors and the company's delisting from the Toronto Stock Exchange and the AIM market of the London Stock Exchange.

Bankers Petroleum's operations in the past decade have also caused environmental concerns, with local residents complaining of oil pollution and drilling operations damaging their homes, with early 2017 protests forcing the government to compensate them for their damage.

China’s Geo Jade, whose main oil operations before the Albania acquisition were focused in Kazakhstan, acquired Bankers Petroleum for C$575 million (€390 mln) from Canadian investors.

The Bankers Petroleum acquisition followed that of the TIA, Albania’s sole international airport, turning China, the world’s second largest economy, into a key investor in Albania, a country which was China’s top ally in the Balkans in the 1960s and 1970s.

 

Oil production picking up

 

Recovering oil prices are also expected to give a boost to local oil industry, exports and government revenue after production hit a 6-year low in 2016 as prices slowly recovered from the mid-2014 slump.

Albania produced 956,000 metric tons of crude oil in 2017, down about 10 percent compared to 2016 and about 30 percent less compared to the peak 2014 production of 1.36 million metric tons just before oil prices embarked on a downward trend, according to data published by state-run Albpetrol oil company.

Canada-based Bankers Petroleum, the country’s largest oil producer which in mid-2016 was fully acquired by a Chinese consortium, accounted for the overwhelming majority of 90 percent of total domestic production.

The oil giant is also one of the country's top exporters and a key employer in the region of Fier, Albania’s second largest region, where oil and agriculture are the two main industries.

Meanwhile, state-run Albpetrol oil company which currently runs only 5 percent of oil wells, almost doubled its production to 93,000 metric tons in 2017, up from 51,000 metric tons in 2016. The increased production came as three oil fields were taken back under state control following failed deals with private concessionaires.

Albania’s oil industry could receive a major boost if prices pick up and oil giant Shell, currently involved in some key promising exploration projects, decides to engage in production.

Albania oil exports, which make up about a fifth country’s poorly diversified exports, are low-value added as oil is mostly exported as crude and only a small amount is domestically refined.

The oil industry produces Albania’s second largest exports and employs more than 3,000 people, but what the Albanian government gets from exports is only a 10 percent royalty tax as no company currently pays the controversial 50 percent tax rate, which under current contracts, concessionaires start paying once they meet investment costs.

In its new contract with British-Dutch multinational Shell the government says Albania will be able to earn a portion from the first oil production in addition to the mining royalty when the oil giant engages in production.

The oil and mining industry was the fourth largest FDI recipient at the end of 2017, with the investment stock at about €875 million, accounting for 13 percent of the total FDI stock of €6.5 billion, according to Albania’s central bank.
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                    [post_content] => TIRANA, Oct. 3 – Albania successfully tapped international markets to raise €500 million in its third ever Eurobond at an interest rate of 3.55 percent, down 2.2 percent compared to three years, in an issue which the Prime Minister described as a sign of confidence in Albania’s economy, but the opposition slammed as more costly compared to Albania’s regional competitors and going to cover luxury expenditure.

Albania’s new Eurobond is a 7-year €500 million issue which also includes €200 million in a buyback from the previous €450 million in a five-year Eurobond that was due to mature by November 2020.

“The markets responded clearly. Four years ago, Albania paid 5.75 percent for its 5-year Eurobond to reward those who invested in this country. Today we are paying 3.5 percent for a 7-year Eurobond. The difference is that Albania is no longer seen as risky, but as a safe and promising investment thanks to the transforming reforms, but there's still a lot to do,” Prime Minister Edi Rama commented on social media.

The government says the Eurobond and buyback operation will meet financing needs for the next couple of years and could save taxpayers money by reducing refinancing risk in 2020 when borrowing needs are estimated at €700 million.

Due to higher public debt levels compared to regional Western Balkan countries, Albania's Eurobond interest rate was slightly higher compared to neighbouring countries tapping international markets in 2018.

Earlier this year, Macedonia borrowed €500 million in a 7-year Eurobond at an interest rate of 2.75 percent while Montenegro raised €500 million at a 3.37 percent rate.

This year's market conditions were much more favorable compared to the 2015 issue as the European Central Bank continues to keep its key rates at a historic low of zero while Europe’s single currency currently trades at a 10-year low against the Albanian lek, making external debt repayments much cheaper for the Albanian government.

However, both U.S.-based Standard and Poor’s and Moody’s, two of the ‘big three’ rating agencies, continue to rate Albania B+ and B1, with a stable outlook, in a rate that remains the same compared to 2015 Eurobond issue due to public debt levels lingering at about 70 percent of the GDP, a high level for Albania's stage of development.

Opposition Democratic Party MP Jorida Tabaku said taking out new debt to pay off old debts and borrowing to pay for the luxury spending in the past four years and at a higher rate compared to Montenegro and Macedonia cannot be considered an achievement.

"With a hidden debt because of the public private partnerships that take it to 82 percent of the GDP and an economy handcuffed by monopolies, the future of Albanians, who according to INSTAT, live on 600 lek (€5) a day is grim," wrote Tabaku.

The last time Albania addressed international markets was in late 2015 when it managed  to secure €450 million in a five-year Eurobond at a coupon rate of 5.75 percent, down from 7.5 percent in its inaugural €300 million Eurobond in 2010.

Albania picked Citi, an American multinational investment bank and financial services corporation, Banca IMI, a subsidiary of Italy’s Intesa Sanpaolo specialized in investment banking and capital markets and French lender Societe Generale as joint lead managers for Albania’s third Eurobond.
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            [post_date] => 2018-10-10 12:39:37
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            [post_content] => TIRANA, Oct. 10 - The Albanian government says it will also ban sports betting shops from residential areas starting next January in addition to a warned relocation of electronic casinos in a bid to curb a booming phenomenon which costs Albanians more than a hundred million euros a year and has a series of negative economic and social effects for one of Europe’s poorest countries.

The ban on the booming sports betting industry comes following a two-year extension to a law disciplining gambling in downtown areas by relocating electronic casinos to the outskirts and setting a 100 meter aerial distance for sports betting shops from religious or educational institutions and from each other. Initially scheduled to become effective in January 2017, the legal changes were postponed for January 2019 in apparent successful lobbying by a booming industry that employs thousands of people and generates more than a hundred million in income.

"Starting December 31, all electronic casinos will cease their operations under the gambling law. Today's (Tuesday) change also involves sports betting as well as any bet for every kind of race involving horses, dogs or any kind of slave of the Albanian fauna," Prime Minister Rama told journalists following a government meeting.

“Starting January 1, no shutters will open for betting and as already envisaged by the current law and no shutters will open for electronic casinos in any residential area in the 28,000 km2 of the Republic of Albania,” added Rama.

The government says it is also working to discipline online gambling and immediately implement a ban on gambling advertising which it says has been largely ignored by the media.

Finance minister Arben Ahmetaj had earlier warned the legal changes would only affect electronic casinos, but not sports betting shops which were initially set to be reduced at a distance of not less than 200 meters from each other next January even in downtown areas.

His comments came last September as the ruling majority approved some changes to the gambling law, also unifying taxation to 15 percent of gross earnings even for the loss-making Austrian-run National Lottery which in 2013 was given a 10-year licence to organize Albania’s first ever national lottery and offered a 10 percent tax rate.

The legal changes were initially vetoed by the country’s president who argued they failed to discourage a booming business with negative effects for the country’s economy and society.

 

Expert hails initiative

Economy expert Arben Malaj has hailed the government decision against a booming industry that was having costs for Albanian households through an increase in the number of divorces and crime rates.

"We have to admit that there is no other country, either from Eastern Europe to have such massive gambling invasion in downtown areas, next to schools and everywhere, making it easy to become a victim,” Malaj, a former finance minister, has told a local TV.

"This industry is controlled by experts who manipulate even psychologically, so that the ones who gamble become victims. That's why it has turned into a national concern and in this respect the measure is adequate," he adds.

Already adopted legal changes limit the geographical location of casinos only to areas determined for tourism development or five-star hotels or tourist resorts and while new amendments are also set to relocate the booming sports betting shops in the outskirts.

 

Relocation effects

The relocation of the gambling industry to rural non-populated areas is an old initiative that is finally being implemented following consecutive delays in the past five years.

If strictly implemented even for sports betting shops, the relocation to rural areas is expected to provide a severe blow to a booming industry which last year generated more than €130 million in income and paid about €50 million in taxes, not to mention a significant reduction in staff and massive closure of coffee bars that served as betting shops.

However, Albanians would practically have more disposable income and negative social effects associated with gambling would sharply reduce.

Albania had more than 3,900 betting shops at a rate of 1 per 730 local residents this year, setting a European record, according to data obtained by local media.

 

Transfer saga 

Transferring casinos outside Tirana is an initiative that began in 2012 when former Tirana mayor Lulzim Basha, the current leader of the main opposition Democratic Party, imposed higher tax burden for casinos operating in downtown Tirana, but failed to displace them outside Tirana, including the country’s sole casino that still operates in the city center.

Back in October 2013, soon after Edi Rama took office as the country’s Prime Minister, he initiated a nationwide campaign dubbed “The End of Madness” that closed down dozens of illegal gambling businesses, vowing zero tolerance to an activity which he said “cannot be the future of the country even legally.”

However, five years on, gambling remains a booming business and casinos and betting shops have grown in numbers and are even found close to schools or religious institutions.

Albanians reportedly spent a record 16.6 billion lek (€132 mln) in gambling in 2017, up 10 percent compared to the previous year, according to turnover data reported by the main electronic casino, lottery and sports betting companies.

Gambling is a booming business in Albania and varies from lotteries, electronic casinos and more numerous sports betting shops. A gambling law, which has been in force for several years, bans people under 21 from entering betting shops, but regardless, teenagers are often seen there.

The booming gambling businesses is often linked to gangs laundering crime and drug proceeds. There have been also cases when even senior officials and judges have justified some of their income through winnings in betting shops or casinos in their wealth declarations.

 
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