Economics of Gambling in Slovakia

The Slovak gambling market has a rather large number of players. It is divided among approximately 180 operators who supply gambling services in their respective sectors.

Tipos (the national lottery company) has a monopoly in so-called “state lotteries”. According to the Act on Gambling Games, a state lottery is understood as a gambling game that is made of numerical lotteries, especially bingo, and gambling games operated by means of the Internet. Other types of betting, besides the state lotteries, could be operated by any other entity under the condition of obtaining the license.

The new Act on Gambling Games was adopted in the year 2005. Gambling operators are exempt from paying VAT on its services in Slovakia, but are obliged to pay VAT on nongambling services. Before 2005, taxes were calculated on the revenue-payout basis, where every sector had a different tax rate (number lotteries had a tax rate of 34%). However, since 2005 the basis for calculating taxes is as follows:

Gambling Industry Taxation in Slovakia since 2005:

Gaming Sector >>> Tax
ticket lotteries >>> 15% of the gaming revenue to the state budget
number lotteries >>> 17% of the gaming revenue to the state budget
instant lotteries >>> 20% of the player losses (expenditure)
betting games, except horse racing >>> 5% of the gaming revenue. In case of sport betting, 4.5% goes to the state budget and 0.5% to the local town budget
Bingo >>> 4.5% of the gaming revenue, of which 4% goes to the state budget and 0.5% goes to the local town budget
Special bingo >>> 4% of the gaming revenue to the state budget
Horse racing >>> 1% of the gaming revenue to the state budget
Betting games in a casino >>> 27% of the gaming revenue, of which 24% goes to state budget and 3% goes to the local town budget
Gambling games operated via gaming machines >>> SKK45,000 (about €1,200) per machine per annum to the state budget
Gambling games operated via technical devices operated directly by gamblers and video games >>> 27% of the gaming revenue, of which 24% goes to state budget and 3% goes to the local town budget
Gambling games operated via telecommunication devices >>> 10% of the gaming revenue to the state budget
Gambling games operated on the internet >>> 27% of player losses to the state budget

Note: One Euro equals approximately 40 Slovak koruna (SKK)

Source: Submission to the Enquiry from TIPOS

License fees are paid once a year. In the Act on Gambling it is called “financial guarantee”.

Annual Gambling industry License Fees in Slovakia:

Gaming Sector >>> Tax
ticket lotteries and raffles >>> 5% of the turnover (tickets sold times price of tickets)
betting games, except for course bets >>> SKK1,000,000 (€25,000)
Bingo, except special bingo >>> SKK500,000 (€12,500)for one operation of bingo
Course bets >>> SKK10,000,000 (€250,000)
Gambling machines in a casino >>> SKK15,000,000 (€375,000)
Gambling machines >>> SKK10,000 (€250) per machine
For other gambling games >>> SKK3,000,000 (€75,000)

Source: Submission to the Enquiry from TIPOS

GAMING SECTOR ANALYSIS

Lotteries

There is only one company which operates and has a monopoly in the sectors of number lotteries, instant ticket games and games over the internet (number lotteries and betting) in Slovakia. TIPOS (národná lotériová spoločnosť) is a joint-stock company that was established in 1992. The company operates lottery and betting games in accordance with the provisions included within the Act of Slovak National Council No 194/1990 on lotteries and other similar games and according to the licenses of the Ministry of Finance. Since 1994, TIPOS has been wholely State-owned, and represented by the Ministry of Finance.

In 2003 TIPOS offered a total of 16 games. Lotto 6/49 retained its position as the most popular game with sales of SKK 908.9m (€23.4 million) or a third of the Tipos’ total. Overall sales were up by 5.4% to SKK 2.732 billion (€70.3 million) in 2003, the equivalent of SKK 617 (€15.90) per adult.

TIPOS commenced offering two internet gaming products, E-Keno and E-Tipos, in 2002 under a license granted by the Ministry of Finance which provides the company. All games are available only in Slovak and payments are accepted only directly from Slovak banks into players’ accounts. During 2003 TIPOS’ Internet sales reached SKK 470k (€12,100), accounting for just 0.02% of its total sales. (Source: GBGC Report) Tipos’ Lottery Sales (1993-2003)

Gambling operators are exempt from paying VAT on its services in Slovakia, but are obliged to pay VAT on non-gambling services. Before 2005 number lotteries had a tax rate of 34%. However, since 2005 the base for calculating taxes is as follows:

Gambling Industry Taxation in Slovakia since 2005:

Gaming Sector >>> Tax
ticket lotteries >>> 15% of the gaming revenue to the state budget
number lotteries >>> 17% of the gaming revenue to the state budget
instant lotteries >>> 20% of the player losses (expenditure)

Source: Submission to the Enquiry from TIPOS

License fees are paid once a year and in the 2005 Act on Gambling it is called “financial guarantee”. Ticket lotteries and raffles are required to pay 5% of the turnover (tickets sold times price of tickets) annually in license fees.

In addition to taxes and license fees, Tipos is also obliged to pay an additional amount of money to the state budget for good causes.

Despite the introduction of the new Gambling Act in 2005, there are no expected significant changes in good causes contribution in Slovakia.

Casino Gaming

Slovakia has seven casinos in operation. According to the Finance Ministry, during 2002 Slovak casino GGR was approximately SKK 330 million (€8.5 million.) (Source: GBGC Report)

Machine Gambling Outside Casinos

Taxes on gaming machines were doubled in 1998 to SKK 80,000 (€2,100) per machine per year. This had the effect of reducing the number of machines in circulation. Prior to the tax increase, there were approximately 13,000 machines in operation, but as of 2002, there were fewer than 10,000. The vast majority of these are in the control of approximately fifty companies. (Source: GBGC Report)

Betting

At the end of the year 2005, there were twelve operators of betting in the Slovak Republic. TIPOS did not participate directly in the betting market (excluding the state lotteries), but via its subsidiary firm – TIPKURZ. Total betting market turnover (stakes) was 7.90 million SKK (€200,000) and betting GGR was approximately 1.03 million SKK (€40,000) for 2005. The market share of TIPKURZ in the betting market, beside state lotteries, was approximately 0.5%.

Bingo

The Ministry of Finance granted TIPOS a license for the operation of the betting game TIPOS-BINGO, which was renewed during 2003. According to the Act on Gambling Games, Tipos has a monopoly in offering bingo games.

Media Gambling Services

No information was found or contributed by stakeholders approached as part of this research endeavor that allowed meaningful discussion of this sector.

Sales Promotional Gambling

No information was found or contributed by stakeholders approached as part of this research endeavor that allowed meaningful discussion of this sector.

Charity Gambling

No information was found or contributed by stakeholders approached as part of this research endeavor that allowed meaningful discussion of this sector.