2020 was a tough year for the global economy thanks to a pandemic that disrupted the lives of millions and sent many companies out of business. Yet for some sectors, it wasn’t exactly doom and gloom.
The success of Amazon and Zoom is well documented, but the boom in online gambling is often overlooked by the media. Already on the rise before the pandemic, lockdown saw a sharp spike in activity across the globe.
The picture was no different in Slovakia. Since the 2019 Gambling Act opened up the online market to foreign operators, more internet players than ever are drawn to a wider range of betting games. This had led to fears of a related increase in problem gambling, with internet players often playing alone and at higher risk of developing a habit, according to some experts.
Rather than suffering from more competition, state-run operator Tipos – who held a monopoly prior to the Act – has yielded a 29% increase in profit after tax in 2020, no doubt helped by its continued sole control of online lottery and bingo games.
Calls for tighter internet regulation have intensified in light of the trend, yet Slovakia’s Finance Minister Eduard Heger and Tipos CEO Marek Kanka appeared to ignore the issue in a joint press conference. Their focus was on praising Tipos’ performance and management change as key components of its success, rather than acknowledging that changing gambling habits might have played a part.
The event was a worrying sign to gambling safety experts, who believe that increased regulation should be a priority for the country’s government as a means of keeping gambling addiction in check.
Stricter measures in other countries
When compared to other countries, Slovakia’s gambling regulation appears lax. In Europe, laws vary drastically with each country having its own legislation, however many nations offer players more protection than in Slovakia.
The UK, for example, has some of the most liberal industry regulations on the continent following its 2005 Gambling Act which legalised betting advertising. Yet this is governed by the UK Gambling Commission (UKGC), an official regulatory body that ensures operators follow strict conditions. The government also moved to outlaw using credit cards to place bets in 2020, after studies showed they contributed to gambling addiction.
In Sweden, the explosion in online gambling during the pandemic led to the government taking swift action. They introduced new regulations that set a weekly deposit limit of 5,000 SK (around £500), with a cap on online bonuses that casinos could offer players. Swedish operators must also lower their annual spending on advertising.
Compare this to the situation in Slovakia where an increase in licensed operators has naturally led to a much higher number of betting adverts. The 2019 Act took no action against restricting these promotions, instead of raising the license fee to a huge €3 million – causing operators to advertise more aggressively in a bid to recoup this cost. Such a cost also favours bigger operators, leading to a situation where a few major players dominate the market to their advantage.
The lump-sum fee contrasts with many other countries, such as the UK, where the cost is determined according to revenue, removing much of this desperation to meet costs. Operators in the UK have also received heavy fines for aggressive advertising recently, something that has yet to take place in Slovakia.
Tipos has been one of the more prominent advertisers, no doubt motivated by an upturn in competition. Their advertising campaign has hit Slovakian TV screens in a big way, with some of their promotions displaying a questionable attitude to betting. It doesn’t take a financial expert to assume that this may have contributed to their bumper profits, yet little has been heard from the government on this matter.
A joyous tone
The joint press conference to announce Tipos’ much improved financial year struck a joyous tone in front of the country’s media.
Kanka hailed the company’s turnaround during the pandemic but put the success down to an effective marketing strategy and a change in management, rather than any cultural changes. His speech even mentioned secondary factors such as ‘adjusting internal processes’, taking the spotlight away from calls for tightened regulation.
Those looking for a cautious approach from the government would also have been disappointed. Minister Heger supported Kanka’s comments, failing to mention gambling reform when talking about the company’s future growth. It seemed that the pair were more interesting in providing ‘value’ for shareholders rather than protecting online players from aggressive ad campaigns and more betting options than ever before.
The first step towards solving a problem is by acknowledging that it exists. The fact that the Slovakian government appeared to skirt over the issue is a worrying sign to anti-gambling activists and a backward step towards improved regulation.
A government responsibility
The growth of online gambling worldwide is good news for betting companies who foresaw the rise in internet iGaming but might be bad news for society. Studies say that individuals prone to addictive behaviour find it easier to get hooked betting online than in person – you can sign up to a betting site in a few minutes and use a credit card to spend money you don’t have. What’s more, this money doesn’t even feel real for a lot of people: at least not the same as having notes and coins in your hand.
While there are some great online campaigns that aim to tackle betting addiction, it’s also the government’s responsibility to introduce effective legislation. Slovakia’s finance minister would do well to shine the spotlight on this, rather than Tipos’ recent leadership change.