Even the Ministry of Finance is not content with the draft currently in the Senate. “We believe it is a nonsystematic move. The situation on the lottery market does not need partial adjustments in the form of several amendments, but a brand new law, reflecting the onslaught of new gambling technologies and projects,” said Minister of Finance Eduard Janota.
“Gambling attracts crime and it breaks apart families,” Christian Democrat (KDU-ČSL) chairman Cyril Svoboda stated. His party wants a fee of Kč 1 million to be paid for every new gambling machine.
The Social Democrats (ČSSD) introduced a proposal that gambling operators should be prevented from stashing away a part of their revenues—which they are already obliged to return to purposes beneficial to public—to foundations created by themselves. Instead, they would give them to a state-controlled fund to further distribute them. Some municipalities are even demanding total control of all gambling on their territories.
“We estimate that municipalities could be earning about 1 percent of their incomes from gambling. Of course it is only an average number. We also have to take into consideration the local government’s expenses connected to removing all the negative effects, like disintegrating families, homelessness and crime,” explained Jaromír Jech, executive vice chairman of the Union of Towns and Municipalities of the Czech Republic (SMOČR).
In some cases the introduction of a new generation of gambling machines incurs financial losses to municipalities. The gambling companies ever more often come voluntarily to municipalities requesting permission to open a gambling place. The reason can simply be an effort to maintain good relations with the local government or perhaps they believe that the law could be changed soon. The municipal council in question has to consider such a request, which costs money.
In central Ostrava alone the town budget last year obtained some Kč 30 million (€1.17 million) in form of various fees from traditional gambling machines. The amount is divided approximately into three equal parts—licensing fees, administrative fees and shares of the profit from each gambling machine.
A garden instead
But even in the domain of games of chance local customs vary. The town of Mikulov, South Moravia, may serve as an example. With joblessness at 11 percent and little chance of creating new jobs the town has no need to solve problems with gambling. Although the Town Hall at one moment thought about issuing a strict public notice to chase gambling places away from schools and downtown, it eventually proved unnecessary. “I go to look there and see for myself, but I really think we do not have any drastic problems here, I do not see any indications of heavily addicted people,” said Mayor Rostislav Koštial. People in this region are more apt to cope with stress within their families by going to relax in their gardens.
“I can only envy the mayor. Here, we have to cope with hundreds of thousands of debts made by people who earn less then Kč 10,000 a month or who get only unemployment benefits,” said a social worker from Most, North Bohemia. The idea of inhabitants of the inglorious neighborhood of Chanov going to relax from their difficult living conditions in a garden is like science-fiction for her. At the same time she added there are not many ways to help these families. “I am not so surprised at their getting hooked on betting on sports or playing at gambling machines. They feel that this way they have at least a small chance to get some money,” she explained.
An analysis of towns and municipalities shows places with focal points of gambling addiction. They exist in areas with high social tension, unemployment, fear of the future and low chances to get a proper education.
The current government, including Minister of Finance Eduard Janota, is much more open to negotiations with municipalities than all the previous Cabinets were. “I do not know if the government will oblige us, but they are willing to talk. One proposal worked out at the Ministry of Finance even supposes to move all responsibility for decision making on gambling from the state to the municipalities. And this means a basic shift, although it is only one of several possibilities,” SMOČR‘s Jech pointed out.
According to the SMOČR, it is necessary to accept a long-time accord that society will, in a way, tolerate gambling—as it tolerates smoking and alcohol. “We only want to make it quite clear regarding the rules of such tolerance. It is better to have gambling at least a little under control of the law, otherwise it disappears in a gray zone. From history we know how mafia got strengthened in America in the period of prohibition. Total bans solve nothing,” Jech said.
Pushing rebels
WHERE AND HOW MUCH ARE CZECHS BETTING?
(in crowns per person per year)
Type of game.......2002 2008
Lottery.....................680 746
Fixed-odds betting..........954 1,194
Bingo........................20 9
Casinos...................1,007 977
Gambling machines.........4,120 6,335
Terminals...................207 3,590
Source: Ministry of Finance
Despite its relatively obliging approach the Ministry of Finance has to defend itself against lawsuits filed by certain towns.
Bohumín, which leads the way, was joined by Bystřice pod Perštejnem during the holidays. The reason is the licensing of video-lottery terminals without the consent of the municipality. Three years ago Bystřice already banned similar facilities. People from Bystřice explain that at first glance the difference between a gambling machine and a video-lottery terminal appears to be insignificant.
“You may lose your salary on a gambling machine within 10 to 12 hours, but on a terminal it is gone within 45 minutes,” said Josef Novotný, a member of the municipal council in Bystřice pod Perštejnem. And the growing number of video-lottery terminals has quickly become the Town Council’s nightmare.
Bystřice pod Perštejnem Mayor Karel Pačíska said that last month 29 new terminals were installed in the town. Pačíska does not spare any criticism directed at the Ministry of Finance, where these terminals get their licenses. The same goes for the long-time anti-gambling activist Josef Novotný. They support their view by an expert opinion saying clearly that the facility is in fact a gambling machine, which is banned by a public notice valid in the town. But that is just the point where the opinions of lawyers differ.
There are now 40,000 video-lottery terminals in the country, most of them in Prague and Brno, South Moravia. Further on other big agglomerations follow, such as in Ostrava, North Moravia; Chomutov, North Bohemia; Most, North Bohemia and Plzeň, West Bohemia.
Law lagging heavily behind
“Everybody in this line of business knows that after six years of efforts to prepare a better law, the technologies have overtaken all the expectations and ideas of our legislators. But then the crisis came and people have less money,” said Petr, a betting shop employee in Karlovy Vary.
“In the case of video-lottery terminals the technology really overtook the legislative process,” admitted Zuzana Chocholová from the communication department of the Ministry of the Interior. “We are trying to adjust the system in cooperation with the Ministry of Finance and want to give municipalities not only a possibility to decide on gambling on their own territories, but also an opportunity to get their share from the revenues of gambling operators,” she added.
The operators want to have as much freedom as possible in their line of business, of course. The municipalities, on the other hand, want to have the industry under control and now and then to chip away a little from their profits. And the state in its top position does not like to lose influence in any domain whatsoever. The discrepancy among these three subjects will have to be solved. According to insiders, there are three variations of a new gambling law being prepared. The interim government, which has no session planned before the end of the summer holidays, will probably leave the issue to the new government after the October elections.
“It is a surprisingly hot topic and in this time of growing joblessness, accompanied by lowering incomes to local budgets we will perhaps have to look for a quicker solution,” remarked an independent expert, preparing materials for decision making by the Ministry of Labor and Social Matters. The expert believes that a decision should be made quickly, particularly before next year’s budget is approved. [rc]
© 2009 Stanford, a. s.
August 26, 2009
CZECH REPUBLIC: Reigning in a wild horse
.
PRAGUE, Czech Republic / Czech Business Weekly / August 26, 2009
By Jiří Němeček
Is it better to smoke and drink, or to push coins into gambling machines? A puritan would say that out of these possibilities the best one is to eat yogurt and to jog in the park.
Nevertheless many people have different ideas how to spend their leisure time. Last year Czechs gambled Kč 130 billion—and that only for “official” games. New technologies bring new possibilities, though, and unlike “classic” gambling, video gambling is not subject to municipal regulations.
Gambling laws give ordinary citizens the right to choose for themselves whether or not they want to gamble. But a harmless hobby can easily develop into addiction. Psychiatrists in contact with addicted gamblers say that for a certain period it is easier for addicts to hide a gambling addiction from family and friends than it would be with alcoholism or drug addiction.
“These addicts run into debt, taking their families with them, and because of the fast development of technology they get virtually no chance to recover,” said Klára Soutenská, who helps addicted people with money from a special European fund.
Many mayors have stated that they do not intend to just stand by and do nothing. On the other hand, larger powers in the domain of issuing gambling licenses can bring millions to municipal budgets. The long overdue and now nearly dead amendment to the gambling law offers virtually no solution to the problems caused by modern betting technologies. So after the elections in October expect another wave of gambling industry lobbying to press their interests in the newly formed Parliament.
“Because of the big amendment to the gambling law that is being prepared, we gambling operators have unified in the Association of Fixed-Odds Betting Operators (APKURS) to defend our common interests,” said Jiří Hrabovský, spokesman of betting company Synot Tip. Executive manager of APKURS Marek Herman explained that operators negotiated with state and municipal representatives about a new distribution of powers. At stake is not only who will have the power to authorize gambling rooms, but also how the profit and fees are to be distributed among the operators, the state and municipalities. Photo by Martin Siebert
Even the Ministry of Finance is not content with the draft currently in the Senate. “We believe it is a nonsystematic move. The situation on the lottery market does not need partial adjustments in the form of several amendments, but a brand new law, reflecting the onslaught of new gambling technologies and projects,” said Minister of Finance Eduard Janota.
“Gambling attracts crime and it breaks apart families,” Christian Democrat (KDU-ČSL) chairman Cyril Svoboda stated. His party wants a fee of Kč 1 million to be paid for every new gambling machine.
The Social Democrats (ČSSD) introduced a proposal that gambling operators should be prevented from stashing away a part of their revenues—which they are already obliged to return to purposes beneficial to public—to foundations created by themselves. Instead, they would give them to a state-controlled fund to further distribute them. Some municipalities are even demanding total control of all gambling on their territories.
“We estimate that municipalities could be earning about 1 percent of their incomes from gambling. Of course it is only an average number. We also have to take into consideration the local government’s expenses connected to removing all the negative effects, like disintegrating families, homelessness and crime,” explained Jaromír Jech, executive vice chairman of the Union of Towns and Municipalities of the Czech Republic (SMOČR).
In some cases the introduction of a new generation of gambling machines incurs financial losses to municipalities. The gambling companies ever more often come voluntarily to municipalities requesting permission to open a gambling place. The reason can simply be an effort to maintain good relations with the local government or perhaps they believe that the law could be changed soon. The municipal council in question has to consider such a request, which costs money.
In central Ostrava alone the town budget last year obtained some Kč 30 million (€1.17 million) in form of various fees from traditional gambling machines. The amount is divided approximately into three equal parts—licensing fees, administrative fees and shares of the profit from each gambling machine.
A garden instead
But even in the domain of games of chance local customs vary. The town of Mikulov, South Moravia, may serve as an example. With joblessness at 11 percent and little chance of creating new jobs the town has no need to solve problems with gambling. Although the Town Hall at one moment thought about issuing a strict public notice to chase gambling places away from schools and downtown, it eventually proved unnecessary. “I go to look there and see for myself, but I really think we do not have any drastic problems here, I do not see any indications of heavily addicted people,” said Mayor Rostislav Koštial. People in this region are more apt to cope with stress within their families by going to relax in their gardens.
“I can only envy the mayor. Here, we have to cope with hundreds of thousands of debts made by people who earn less then Kč 10,000 a month or who get only unemployment benefits,” said a social worker from Most, North Bohemia. The idea of inhabitants of the inglorious neighborhood of Chanov going to relax from their difficult living conditions in a garden is like science-fiction for her. At the same time she added there are not many ways to help these families. “I am not so surprised at their getting hooked on betting on sports or playing at gambling machines. They feel that this way they have at least a small chance to get some money,” she explained.
An analysis of towns and municipalities shows places with focal points of gambling addiction. They exist in areas with high social tension, unemployment, fear of the future and low chances to get a proper education.
The current government, including Minister of Finance Eduard Janota, is much more open to negotiations with municipalities than all the previous Cabinets were. “I do not know if the government will oblige us, but they are willing to talk. One proposal worked out at the Ministry of Finance even supposes to move all responsibility for decision making on gambling from the state to the municipalities. And this means a basic shift, although it is only one of several possibilities,” SMOČR‘s Jech pointed out.
According to the SMOČR, it is necessary to accept a long-time accord that society will, in a way, tolerate gambling—as it tolerates smoking and alcohol. “We only want to make it quite clear regarding the rules of such tolerance. It is better to have gambling at least a little under control of the law, otherwise it disappears in a gray zone. From history we know how mafia got strengthened in America in the period of prohibition. Total bans solve nothing,” Jech said.
Pushing rebels
WHERE AND HOW MUCH ARE CZECHS BETTING?
(in crowns per person per year)
Type of game.......2002 2008
Lottery.....................680 746
Fixed-odds betting..........954 1,194
Bingo........................20 9
Casinos...................1,007 977
Gambling machines.........4,120 6,335
Terminals...................207 3,590
Source: Ministry of Finance
Despite its relatively obliging approach the Ministry of Finance has to defend itself against lawsuits filed by certain towns.
Bohumín, which leads the way, was joined by Bystřice pod Perštejnem during the holidays. The reason is the licensing of video-lottery terminals without the consent of the municipality. Three years ago Bystřice already banned similar facilities. People from Bystřice explain that at first glance the difference between a gambling machine and a video-lottery terminal appears to be insignificant.
“You may lose your salary on a gambling machine within 10 to 12 hours, but on a terminal it is gone within 45 minutes,” said Josef Novotný, a member of the municipal council in Bystřice pod Perštejnem. And the growing number of video-lottery terminals has quickly become the Town Council’s nightmare.
Bystřice pod Perštejnem Mayor Karel Pačíska said that last month 29 new terminals were installed in the town. Pačíska does not spare any criticism directed at the Ministry of Finance, where these terminals get their licenses. The same goes for the long-time anti-gambling activist Josef Novotný. They support their view by an expert opinion saying clearly that the facility is in fact a gambling machine, which is banned by a public notice valid in the town. But that is just the point where the opinions of lawyers differ.
There are now 40,000 video-lottery terminals in the country, most of them in Prague and Brno, South Moravia. Further on other big agglomerations follow, such as in Ostrava, North Moravia; Chomutov, North Bohemia; Most, North Bohemia and Plzeň, West Bohemia.
Law lagging heavily behind
“Everybody in this line of business knows that after six years of efforts to prepare a better law, the technologies have overtaken all the expectations and ideas of our legislators. But then the crisis came and people have less money,” said Petr, a betting shop employee in Karlovy Vary.
“In the case of video-lottery terminals the technology really overtook the legislative process,” admitted Zuzana Chocholová from the communication department of the Ministry of the Interior. “We are trying to adjust the system in cooperation with the Ministry of Finance and want to give municipalities not only a possibility to decide on gambling on their own territories, but also an opportunity to get their share from the revenues of gambling operators,” she added.
The operators want to have as much freedom as possible in their line of business, of course. The municipalities, on the other hand, want to have the industry under control and now and then to chip away a little from their profits. And the state in its top position does not like to lose influence in any domain whatsoever. The discrepancy among these three subjects will have to be solved. According to insiders, there are three variations of a new gambling law being prepared. The interim government, which has no session planned before the end of the summer holidays, will probably leave the issue to the new government after the October elections.
“It is a surprisingly hot topic and in this time of growing joblessness, accompanied by lowering incomes to local budgets we will perhaps have to look for a quicker solution,” remarked an independent expert, preparing materials for decision making by the Ministry of Labor and Social Matters. The expert believes that a decision should be made quickly, particularly before next year’s budget is approved. [rc]
© 2009 Stanford, a. s.
Even the Ministry of Finance is not content with the draft currently in the Senate. “We believe it is a nonsystematic move. The situation on the lottery market does not need partial adjustments in the form of several amendments, but a brand new law, reflecting the onslaught of new gambling technologies and projects,” said Minister of Finance Eduard Janota.
“Gambling attracts crime and it breaks apart families,” Christian Democrat (KDU-ČSL) chairman Cyril Svoboda stated. His party wants a fee of Kč 1 million to be paid for every new gambling machine.
The Social Democrats (ČSSD) introduced a proposal that gambling operators should be prevented from stashing away a part of their revenues—which they are already obliged to return to purposes beneficial to public—to foundations created by themselves. Instead, they would give them to a state-controlled fund to further distribute them. Some municipalities are even demanding total control of all gambling on their territories.
“We estimate that municipalities could be earning about 1 percent of their incomes from gambling. Of course it is only an average number. We also have to take into consideration the local government’s expenses connected to removing all the negative effects, like disintegrating families, homelessness and crime,” explained Jaromír Jech, executive vice chairman of the Union of Towns and Municipalities of the Czech Republic (SMOČR).
In some cases the introduction of a new generation of gambling machines incurs financial losses to municipalities. The gambling companies ever more often come voluntarily to municipalities requesting permission to open a gambling place. The reason can simply be an effort to maintain good relations with the local government or perhaps they believe that the law could be changed soon. The municipal council in question has to consider such a request, which costs money.
In central Ostrava alone the town budget last year obtained some Kč 30 million (€1.17 million) in form of various fees from traditional gambling machines. The amount is divided approximately into three equal parts—licensing fees, administrative fees and shares of the profit from each gambling machine.
A garden instead
But even in the domain of games of chance local customs vary. The town of Mikulov, South Moravia, may serve as an example. With joblessness at 11 percent and little chance of creating new jobs the town has no need to solve problems with gambling. Although the Town Hall at one moment thought about issuing a strict public notice to chase gambling places away from schools and downtown, it eventually proved unnecessary. “I go to look there and see for myself, but I really think we do not have any drastic problems here, I do not see any indications of heavily addicted people,” said Mayor Rostislav Koštial. People in this region are more apt to cope with stress within their families by going to relax in their gardens.
“I can only envy the mayor. Here, we have to cope with hundreds of thousands of debts made by people who earn less then Kč 10,000 a month or who get only unemployment benefits,” said a social worker from Most, North Bohemia. The idea of inhabitants of the inglorious neighborhood of Chanov going to relax from their difficult living conditions in a garden is like science-fiction for her. At the same time she added there are not many ways to help these families. “I am not so surprised at their getting hooked on betting on sports or playing at gambling machines. They feel that this way they have at least a small chance to get some money,” she explained.
An analysis of towns and municipalities shows places with focal points of gambling addiction. They exist in areas with high social tension, unemployment, fear of the future and low chances to get a proper education.
The current government, including Minister of Finance Eduard Janota, is much more open to negotiations with municipalities than all the previous Cabinets were. “I do not know if the government will oblige us, but they are willing to talk. One proposal worked out at the Ministry of Finance even supposes to move all responsibility for decision making on gambling from the state to the municipalities. And this means a basic shift, although it is only one of several possibilities,” SMOČR‘s Jech pointed out.
According to the SMOČR, it is necessary to accept a long-time accord that society will, in a way, tolerate gambling—as it tolerates smoking and alcohol. “We only want to make it quite clear regarding the rules of such tolerance. It is better to have gambling at least a little under control of the law, otherwise it disappears in a gray zone. From history we know how mafia got strengthened in America in the period of prohibition. Total bans solve nothing,” Jech said.
Pushing rebels
WHERE AND HOW MUCH ARE CZECHS BETTING?
(in crowns per person per year)
Type of game.......2002 2008
Lottery.....................680 746
Fixed-odds betting..........954 1,194
Bingo........................20 9
Casinos...................1,007 977
Gambling machines.........4,120 6,335
Terminals...................207 3,590
Source: Ministry of Finance
Despite its relatively obliging approach the Ministry of Finance has to defend itself against lawsuits filed by certain towns.
Bohumín, which leads the way, was joined by Bystřice pod Perštejnem during the holidays. The reason is the licensing of video-lottery terminals without the consent of the municipality. Three years ago Bystřice already banned similar facilities. People from Bystřice explain that at first glance the difference between a gambling machine and a video-lottery terminal appears to be insignificant.
“You may lose your salary on a gambling machine within 10 to 12 hours, but on a terminal it is gone within 45 minutes,” said Josef Novotný, a member of the municipal council in Bystřice pod Perštejnem. And the growing number of video-lottery terminals has quickly become the Town Council’s nightmare.
Bystřice pod Perštejnem Mayor Karel Pačíska said that last month 29 new terminals were installed in the town. Pačíska does not spare any criticism directed at the Ministry of Finance, where these terminals get their licenses. The same goes for the long-time anti-gambling activist Josef Novotný. They support their view by an expert opinion saying clearly that the facility is in fact a gambling machine, which is banned by a public notice valid in the town. But that is just the point where the opinions of lawyers differ.
There are now 40,000 video-lottery terminals in the country, most of them in Prague and Brno, South Moravia. Further on other big agglomerations follow, such as in Ostrava, North Moravia; Chomutov, North Bohemia; Most, North Bohemia and Plzeň, West Bohemia.
Law lagging heavily behind
“Everybody in this line of business knows that after six years of efforts to prepare a better law, the technologies have overtaken all the expectations and ideas of our legislators. But then the crisis came and people have less money,” said Petr, a betting shop employee in Karlovy Vary.
“In the case of video-lottery terminals the technology really overtook the legislative process,” admitted Zuzana Chocholová from the communication department of the Ministry of the Interior. “We are trying to adjust the system in cooperation with the Ministry of Finance and want to give municipalities not only a possibility to decide on gambling on their own territories, but also an opportunity to get their share from the revenues of gambling operators,” she added.
The operators want to have as much freedom as possible in their line of business, of course. The municipalities, on the other hand, want to have the industry under control and now and then to chip away a little from their profits. And the state in its top position does not like to lose influence in any domain whatsoever. The discrepancy among these three subjects will have to be solved. According to insiders, there are three variations of a new gambling law being prepared. The interim government, which has no session planned before the end of the summer holidays, will probably leave the issue to the new government after the October elections.
“It is a surprisingly hot topic and in this time of growing joblessness, accompanied by lowering incomes to local budgets we will perhaps have to look for a quicker solution,” remarked an independent expert, preparing materials for decision making by the Ministry of Labor and Social Matters. The expert believes that a decision should be made quickly, particularly before next year’s budget is approved. [rc]
© 2009 Stanford, a. s.
