The Strange State of Gambling in Monaco

Well Dressed Gamblers Playing Roulette

When you think of Monaco, the world’s second smallest country, a few things probably come to mind.

  • Beautiful people on some of the most beautiful beaches in the world
  • A “little” racing event called the Monaco Grand Prix
  • Gambling (particularly if you’re a James Bond or Casino Royale fan)

Any or all of these images are right. In its less than one square mile area, Monaco does host some of the most idyllic beach settings in the world. It also hosts the Monaco Grand Prix (one of those racing events you know even if you don’t really follow racing) and has some truly amazing casinos.

There are truly amazing casinos that native-born residents of the country aren’t even allowed to enter under Monaco law.

That’s right. A country that makes a significant portion of its wealth in casinos won’t allow its citizens to enter any casino unless they work there. (Though, Monaco citizens can gamble online if they so choose.) Of course, this law really only applies to 20% of the population of Monaco since the other 80% is foreign-born and the law doesn’t apply to them.

Either way, it’s kind of weird, so let’s delve into the strangeness that is Monaco’s gambling laws and why they have them.

A Brief History of Monaco

Any gambling history relevant to Monaco’s strange laws starts in the 13th century when it is reformed as a colony of Genoa, the Italian city-state. Eighty years after its reformation, the first Grimaldi to rule Monaco, Francisco Grimaldi, takes over.

From this point, the Grimaldis rule Monaco until present day with a few brief interruptions in rule due to a small matter of revolutionary forces taking over the country.

That doesn’t mean that Monaco stayed independent, however, as Monaco became a vessel to the French kings. And in 1814, it becomes a protectorate of the Kingdom of Sardinia for 45 years. Then, it returned to French rule.

Why is this important? Well, two towns, Menton and Roquebrune, get really upset with the Grimaldis because of heavy taxation and try to go back to the Kingdom of Sardinia. This ultimately fails in 1861 and the two cities are integrated back into Monaco, but aren’t really happy about it.

The History of Gambling in Monaco

Up until this point, gambling is forbidden by the French kings even though as early as the 1840s, the Grimaldis realize a giant casino is the answer to the money woes.

Enter Napoleon III and the Second French Empire in 1852 which does several things, the least of which is making it so that Monaco can run a gambling house. Despite the plans, the first casino in Monaco doesn’t open until 1856 and it pretty much flops.

The license to run the casino is then sold for 1.7 million francs to Francois and Louis Black who know a thing or two about making casinos. They find a less-than-desirable seaside area in Monaco nicknamed (at the time) “The Den of Thieves”, toss out the riffraff, and in a triumph of marketing and public relations, rename the area “Monte Carlo.”

Monte Carlo Casino in Monaco

This clearly attracts more people than “The Den of Thieves” and in 1858, the Blanc brothers open a successful casino that is still in operation today.

They’re also helped by the fact a railroad now reaches Monaco from France who brings in trainloads of gamblers who love the scenic ocean views and the grandeur of the casino. This is so successful that by 1869, Monaco stops collecting income tax and finally quiets the unrest from Menton and Roquebrune.

The Blancs end up running all casinos in Monaco through a company, the royal family gains a majority interest and the rest, as they say, is history. Kind of interesting history as far as it goes, but I think I have set the stage for how odd gambling can be in Monaco.

Theories for Monaco’s Gambling Laws

There are several theories for why Monaco has the laws that it does. However, they are just theories. No one can say with complete certainty why Monaco’s citizens can’t enter their own casinos, but we can unravel several possibilities.

Boosting the Monaco Economy

The economy of Monaco got a shot in the arm from the casino and tourism industries. The fact that citizens of the country (both foreign-born and native) don’t pay taxes proves that.

In fact, their income tax laws are written so that immigrating to Monaco is a way to create an income tax haven against paying income tax.

This doesn’t apply to French citizens, who due to a treaty, still get to pay taxes. Also, Monaco has nothing to prevent the government from collecting really high social insurance taxes on wages. Therefore, the country doesn’t run on gambling income alone.

It does, however, perhaps partially explain why the Monegasques (people from Monaco) are not allowed to enter a casino unless they are an employee. It is thought that Monaco’s government wants to prevent levying too many taxes on their own citizens. They have to pay so much in social-insurance tax, to go to the casino would just be paying more taxes.

It’s not the strongest argument for the existence of the laws, but it is one argument.

Another argument is that, somehow, gambling the money in a casino was not an efficient way to stimulate the economy as saving the money or spending it on other means. Therefore, the ban on Monegasques in casinos was created in the hopes they would simply do something else with their money.

Preserving the Morality of Monaco’s Citizens

Another reason why Monegasques were prevented entry into casinos may come down to morality.

For many, especially in 1860s France, there was always something a little sketchy or downright immoral about casinos and gambling. Some thought that the Grimaldis were afraid that if the Monegasques were to enter the casinos, they would squander their money on these immoral things.

Preventing them from doing so would help to ensure that money was spent on more wholesome methods.

Will Monaco’s Laws Change?

It doesn’t seem that there’s any momentum behind the country of Monaco changing their gambling laws anytime soon. So far, the tiny country is doing extremely well for itself and the amount of money its tourism industry and casinos are bringing in is powering the growth of a strong economy.

In other words, the Grimaldis have to be thinking that, “if it ain’t broke, don’t fix it.”

With that said, there is one curious thing. Monaco has no laws against real money online gambling, which would send money outside of the economy of Monaco and carry many of the same morality questions as entering a casino. If any rules were to change, that would seem to be a ripe one.

There could be a possibility that they would limit online gaming to foreigners only, though actually enforcing that rule would be a nightmare. With that said, this is just idle speculation.

The Monaco and France Merger?

What could be a very real possibility is the whispers Monaco has considered rejoining France. Were it to do so, any of the gambling laws in place could change. France has much stricter internet gambling laws (in so far that it has some) while not having rules in place to prevent French citizens from entering casinos.

Hetel de Paris in Monaco

The effect that a merge with France would have on Monaco tax law and gambling law remains to be seen. In some ways, it would be nice if France left Monaco untouched, though that rarely happens in geopolitics.

For now, however, no changes to Monaco’s casino laws are expected.

Conclusion

If you leave this article feeling that Monaco’s strange gambling laws don’t have a firm cause, that’s okay. It’s because they really don’t.

It’s hard to go back into a time in history that’s very different from today and determine why the Grimaldi family passed rules to keep its own people out of the one thing that saved its economy. If anything, the moral argument tends to make the most sense. Perhaps, the Grimaldis were trying to save their own people from moral turpitude.

Whatever the reason, the residents of Monaco aren’t hurting too badly even though they can’t gamble in land-based casinos. There are still plenty of beaches, perfect weather, and auto races to keep them busy.

Maybe that’s the real reason they were forbidden to go to casinos. Monaco has plenty else to offer!