Before & After

1n 1967, Yugoslavian leader, Josip Broz Tito loosened visa requirements for foreigners and opened his country’s borders to Western tourists. By 1973, 28 casinos opened and flourished. A few were owned by the government and the rest were products of foreign and private investors who took advantage of a loophole allowing them to take all their profits out of the country without paying any tax.

It was through this loophole that Penthouse founder, Bob Guccione and Croatian firm Brodokomerc opened the luxurious Penthouse Palace Hotel & Penthouse Adriatic Club aka The Haludovo Palace Hotel. Guccione could not resist the thought of opening a Penthouse-branded casino/hotel behind the Iron Curtain, as well as his intention to end Cold War differences. After investing $45 million into the resort and half a million into advertising, the hotel opened in 1972. Ungodly amounts of lobster and caviar were consumed by guests everyday. Heads of state, with the likes of Saddam Hussein and Olof Palme, enjoyed the the opulent amenities, which included a rumored swimming pool filled with sparkling champagne. No expense was spared to attract and pamper their high-end clients.

One major problem was that Yugoslav citizens were not allowed in the casinos and middle class foreign tourists stayed away. This was a source of revenue badly needed for the overspending resort. By 1973, the Haludovo Palace Hotel was bankrupt. Without Guccione, the worker-run hotel operated until the fall of communism and Croatian War of independence, which kept tourists away. The ultra modern building situated on the Croatian island Krk north of Malinska, now stands vandalized, abandoned but structurally intact.

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