CZECH REPUBLIC MONOPOLY QUESTIONED

16 March 2007

Online gambling regulations may be examined by anti-monopoly officials

The Czech Business Weekly reports that a probe could soon be launched by anti-monopoly officials into the manner in which online gambling regulation is conducted in the country.

Amid complaints that local and international betting companies are denied equal access to providing online betting services in the Czech Republic, the Office for the Protection of Economic Competition (ÚOHS) is considering an investigation of the way in which the Ministry of Finance regulates sports-betting services.

“The current situation - where domestic and foreign companies can’t enjoy the same conditions on the [odds-betting] market - is certainly not good,” ÚOHS chairman Martin Pecina told CBW. “We could challenge the government to change the situation.”

The current Czech lottery law doesn’t allow local betting companies to launch online betting, mostly because they wouldn’t be able to check whether those who gamble on the Internet are older than 18, said Ministry of Finance spokesman Jaroslav R žek in answer to the complaints.

While the government blocks expansion of Czech betting firms’ services on the Internet, it’s unable to block foreign online betting chains from extending their offers to local gamblers.

“It’s a clear discrimination of Czech betting firms,” said Lubomír Ježek, spokesman for gambling company Tipsport. “It’s essential that online betting is either authorised here or effectively banned entirely from the market.”

Since local gamblers are forced to turn to foreign companies that are less transparent and don’t fall under the supervision of Czech market watchdogs, they are being prejudiced, claims Martin Todt, general director of betting firm Fortuna.

Last year, foreign online betting providers’ sales volume in the Czech Republic is estimated to have reached about K 4 billion (Euro 141.9 million) . Meanwhile, the sales volume on the Czech sports-betting market controlled by Tipsport, Fortuna, Chance and Synot Tip reached about K 12 billion - three times that - in 2006.

Betting via online terminals accounts for about 40 to 50 percent of the firm’s sports betting volume, said Kate ina L. Da helová, Synot Tip’s general manager.

Although the Ministry of Finance has been putting together a new lottery law that could be introduced later this year, it doesn’t plan to legalise online betting. Czech betting shops admit that they could legally challenge the government’s regulations, and some of them may even start seeking better business opportunities abroad.

“We’ll consider several options to fight the market inequalities,” said Fortuna’s Todt.

Tipsport’s Ježek and Chance’s chairman of the board Hynek Svoboda said that their companies may legally challenge the government’s regulations if these continued to be unequal for all market players.

Thus far, the Ministry of Finance hasn’t been successful in preventing foreign online companies from offering their services to Czech gamblers. Despite insisting that such bets are illegal, the government hasn’t taken any action against it, such as blocking ISP access to particular Web sites.

Foreign operators from EU member states insist that the free movement of trade and services is applicable to the Czech market, quoting a recent decision by the European Court of Justice on the issue. The ECJ ruled that a member state can’t invoke the need to restrict its citizens’ access to foreign gambling services if at the same time it incites and encourages them to participate in state games of chance or betting offered by national operators or a monopoly.

Online Casino News courtesy of InfoPowa

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