Red into Black

The fabled casino at Monte Carlo had long enforced a ceiling on bets--to the displeasure of, among others, J.P.

Morgan, who refused to gamble there for what he regarded as a piddling 12,000 francs top. But last week the wife of an Italian film producer casually threw away a small fortune at roulette; when the croupier tried to stop her from betting above the current 20,000-franc limit, she scornfully referred him to another table for approval and got it.

Without publicizing the fact, the grandly misnamed Societe des Bains de Mer et du Cercle des Etrangers a Monaco (S.B.M.),* the company that runs the casino and most of the other tourist haunts in the tiny principality of Monaco, has removed the ceiling for some of the casino's best-heeled aficionados.

That was one reason why tourists lost 23% more money in the casino last year than they did in 1971. Those losses are S.B.M.'s--and Monaco's--gain.

Hard as it might seem for a casino operator to run in the red, S.B.M. did just that in two recent years, and barely broke even in another. But now the wheel of fortune has spun to the black again. A few days ago, S.B.M.'s president, jovial little Prince Louis de Polignac, announced a profit of $2.5 million for the year ended last March 31 and a 40% rise in the price of S.B.M. stock, to $15.50. No one was more pleased than his third cousin, Prince Rainier, known to Americans as the husband of elegant Movie Star Grace Kelly. Prince Rainier's Monaco government owns two-thirds of the shares.

Before 1966, the controlling interest was owned by Aristotle Onassis and S.B.M. made money. But in Prince Louis's view, the prosperity was deceptive, concealing weaknesses that became obvious after "Ari" left. Says the prince: "People got to saying: 'Monte Carlo and Monaco are for old people. They are boring.' " Seeking the younger set, S.B.M. under Prince Louis brought top nightclub Hostess-Singer Regine from Paris to headline a new club, and so upgraded its restaurants that one got a star in the Guide Michelin this year. The government helped out by building a new beach. "Several English lords have told me that they are obliged to come to Monaco to please their children," beams Prince Louis.

Now tourist buses are parked next to the lords' Rolls-Royces. Nearly 500,000 persons visited the casino during the year. Ardent gamblers from Italy make up one-fourth of the clientele, but S.B.M. is trying to draw more affluent tourists from Germany, Spain and Britain. Near the casino, where pigeon-shooting grounds were located until Rainier's princess gave the coup de Grace to the cruel sport, S.B.M. is building a big convention center. Already it has booked 55 conventions for the year, and conventioneers from anthropologists to acupuncturists are droning speeches by day and dropping money by night. S.B.M.'s five hotels, once underoccupied and money-losing, almost broke even last year.

As S.B.M. goes, so goes the micronation, which is made up of about 4,000 Monegasques and 25,000 resident foreigners. In the 1960s realtors wondered how to palm off unwanted apartments and offices. Now a building boom has made Monaco a Mediterranean Manhattan of high-rises and lifted some apartment prices as high as $500,000. Monaco is a two-mile strip crowded against the sea, so while building up, the Monegasques are also building out, filling in the waters so that their land has grown from 400 acres to 490. By 1975 three deluxe hotels on the new land will nearly double Monaco's number of hotel rooms.

Will Monaco's lucky streak hold up? Competition for the gambling dollar is growing. Nearby Nice will open its "Las Vegas" Casino next year, and Menton, just four miles away, plans one. Prince Louis cautions, "Don't forget that our prosperity is based upon two precarious elements: gambling and the sun." And, he might have added, dreams.

* Sea-Bathing Society and Foreigners Club at Monaco.

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