Film producer’s offshore business awarded casino licenses
Movie producer Andrew G. Vajna’s company has been awarded the license to operate state-monitored casinos, despite the fact that the ownership structure of the company receiving the permit is suspicious, to say the least – reports Atlatszo.hu.
The state has published the tender documentation for the selection procedure of picking firms to operate state-monitored casinos. The documents show that Las Vegas Casino Kft. was granted five licenses. The company is owned by internationally renowned film producer Andrew G. Vajna, who is also government commissioner in charge of distributing state film subsidies.
The procedure was initiated after the government made a surprise move in 2012 banning the operation of slot machines in an overnight decision and tied any gambling activities to special and limited state permits. The argument for the decision was that impoverished groups typically spend a large percentage of their subsidies or minimal salaries on so-called “one-armed bandits”, making unregulated gambling a social hazard.
With such a backdrop, it would be expected that the applicants, especially the winning applicants have to properly disclose their ownership structure. The documentation shows that Vajna’s firm is owned by offshore companies in Luxembourg and the Dutch Antilles. Ultimately, the entire company group linked to Vajna is owned by a so-called revocable fund in Delaware, the traditional tax haven of the United States, which is home to the majority of Fortune 500 companies for this very reason.
In this arrangement, the Hungarian state is pumping money into offshore accounts after earlier coming down hard on companies and individuals who try to dodge public burdens by expatriating their wealth.
Atlatszo.hu has been following Vajna’s relations with the government in the past years and found that he has received considerable amounts of state money, at times through tailoring laws to his specific needs. For instance, the law that the media often refers to as “lex Vajna” expanded the range of potential recipients of grants from the entertainment support fund to include computer animations. This allowed Digic pictures, a company Vajna founded and which has produced several award-winning animations over the years to also receive central funds.
Movie distribution company Intercom Zrt, a company that Vajna officially quit when he assumed his state role, was also found to have an offshore ownership structure that was used to make HUF 1 billion (around 3.2 million euros) in losses disappear.
This text was posted on 15 May 2014 in Hungarian, translation by Gergő Rácz.