Slovakia Prepares for Online Gambling, Blacklists Some Sites
Slovakia continues on the path to online gambling liberalization, which is set to begin on March 1, 2019, though the process so far has been rocky. Throughout the summer, the Slovakian government has identified illegal operators and added them to a growing blacklist.
In 2017, the Slovak Republic introduced amendments to the Slovak Gambling Act which introduced a blacklist of rogue operators and censorship — an IP block for certain banned gaming sites.
In May 2018, the Slovakian Ministry of Finance introduced draft legislation to end the 26-year old state-run lottery monopoly, TIPOS, and allow private online gambling companies to operate in the country.
Under the Finance Ministry’s proposals, online casino gambling would be taxed at 23%. As a way of comparison, current locally-licensed online sportsbooks in the Slovak Republic currently pay a 27% tax.
Slovak Gambling Act 2018
In much of the gaming media, the proposed 2018 amendments to the Slovak Gambling Act were portrayed as a good sign. That question is still in doubt, though gaming groups should have their answers in the coming weeks and months.
The Finance Ministry’s proposals are supposed to be based on similar reforms in other European countries — specifically Denmark, Sweden, the Czech Republic, and Romania. If that happens, then Slovakia’s online gambling industry could flourish, though iGaming taxes are high in the nearby Czech Republic. Transparency and openness are key.
Radko Kuru’s Blacklist
It is the blacklisting of gaming operators and the blocking of IP addresses which have some concerned. Since the Finance Ministry backed its proposed legislation, Slovak officials have continued to build their blacklist. Finance Ministry State Secretary Radko Kuru said the summer crackdown was made possible by the new legislation.
Secretary Kuru told the TASR newswire changes were needed to catch up to the technological innovation in the online gaming field. He told a TASR reporter, “The global gambling market has developed dynamically in recent years. Legislation has reacted to an expansion of gambling in virtual space and has brought new challenges in terms of supervision.”
Slovak Association of Betting Companies
Peter Papanek, president of the Association of Betting Companies of the Slovak Republic, said in an interview with Slovak news source Sport Aktuality, “The state began blocking illegal companies. But that was only the first step. Now comes the second, clear rules for everyone — anyone who wants to offer online casino games will be able to do so if they meet the prescribed conditions.”
At the time of the May reforms, a 3-month moratorium was placed on new gaming legislation. The blacklist was supposed to be a first step to liberalization, but the second step is now supposed to unfold. If the plan followed other countries, then that part was borrowed from Romania.
End of TIPOS Monopoly
Part of that is ending TIPOS’s monopoly. TIPOS was created in 1992 as a part of opening up former Warsaw Pact nations to capitalism. TIPOS was formed as a state-run monopoly controlled by the Slovak Finance Ministry, Culture Ministry, and Physical Culture Association.
The idea was to raise revenues for the newfound Slovak Republic, but that idea appears to have served its purpose. More than a generation later, many Slovakians have grown up never knowing communist rule. Private enterprise is now favored over state-run companies, which were supposed to be a stepping stone to full privatization.
Peter Papanek on Online Gambling Process
Peter Papanek explained what the thinking of Slovak officials are: “Experience from abroad shows that, if the state wants to intervene against tax evasion and illegal gambling, it must go through the liberalisation of the market and the setting of fair conditions, inter alia, to motivate operators to operate legally.”
“Illegal companies thus lose the incentive to circumvent the rules, and the state, in addition to income, also gains the certainty of consumer protection. The countries that have been chosen liberalisation have rapidly reduced the share of the black market.”
If Papanek’s suggestions are correct, then Slovakia will enter a brave new era of open and transparent online gambling on March 1, 2019. If that is to happen, then the Slovak Republic’s Finance Ministry soon should announce a licensing process. If sites are to launch in March of 2018, they need several months to apply for licenses, have their applications vetted, test their sites with a soft launch, and eventually be approved for operations. Between now and the end of 2018, the gaming community should await news from the Slovak Republic that blacklisting and blocking phase is over and the licensing phase has begun.
The Slovak Finance Ministry has won praise under the leadership of Peter Kazimir (pictured above), who won the 2018 European Finance Minister of the Year by The Banker, a notable British publication. In receiving the award, Peter Kazimir said, “I’m glad that our accomplishments are being recognised abroad as well. It’s a result of our efforts, but also the fact that we represent an equal partner for others in Europe.”
If the process is meant to ban bad actors and provide equal status for other online gaming companies from EU countries — as other Slovakian financial programs have done since Kazimir took over in 2012 — then the March 2019 rollout should be successful and positive. Embracing technology to improve the deliverance of gaming and regulations of the gaming companies is a positive. As Kazimir said, “I hope that our economy will fare well in the future, mostly by virtue of investments in the automobile industry and technological innovations.”