Lobbyists of the gambling act

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Several dozens of entities (entrepreneurs, associations, organizations, law firms) and plenipotentiaries of the companies concerned have already submitted remarks to the draft law on gambling. Proposals of changes are being submitted by basically all sectors of the gambling industry: poker players, bookmakers, gaming machine operators, casinos, but also foundations and associations concerned with the fact that the government is trying to interfere too much with the Internet content.

The poker world represented by the Wolny Poker (Eng: Free Poker) or “Poker to nie hazard” (Eng: Poker is no gambling” associations have called, first of all, for legalizing on-line poker and “cash” games as well as tournaments organized outside casinos. They also objected introducing a state monopoly on this form of entertainment in the Internet. The Ministry recognized all remarks of the sector as outdated or did not take them into account. Now wonder, as it is the draft legislation of the government after all, not a contrary to it proposal of Minister Gowin. It seems that the efforts of the poker world to include poker as one of the Olympic games will be put off again. The question whether poker would be played during the summer or winter Olympic Games still remains unanswered. We are waiting for the IOC to join the discussion.

lob1Operators of gaming machines, affiliated in Izba Gospodarcza Producentów i Operatorów Urządzeń Rozrywkowych (Eng: the Economic Chamber of Manufacturers and Operators of Gaming Equipment), called for the withdrawal from introducing the state monopoly in the gaming machine sector. They argued that giving the state the exclusive right to organize games violates the principle of entrepreneurial freedom and proposed to introduce a licensing system that would allow to avoid the costs to be paid by the state budget if the state monopoly is introduced.

Similar proposals aimed to prevent eliminating private entities from the gaming machine market have been filed by: Forgame Sp. z o.o., Forta Sp. z o.o., Fortuna Sp. z o.o. and representing this company the Budnik, Posnow i Partnerzy law firm. They argued that if the proposed solutions enter into force, they would not only fail to remove the shadow economy from the gaming machine sector, but contribute to its growth with all the social and economic consequences of this phenomenon.

lob2Also, Ogólnopolski Związek Pracodawców Branży Rozrywkowej (Eng: the Polish Association of Entertainment Industry Employers) insists on rejecting the monopolistic proposals in the scope of better supervision of the state over the organization of slot machine games. The Association suggests that this kind of business activity should be subject to restrictions similar to those adopted in the act that limits alcohol sales, and tighten up the possibility to organize slot machine games to restricted areas only.

The representatives of a dominant player on the market, which runs casinos and (until recently) amusement arcades, have presented interesting (mainly from the point of view of their own business) arguments. Zjednoczone Przedsiębiorstwa Rozrywkowe company (Eng: the United Entertainment Companies, ZPR) and Stowarzyszenie Menedżerów Firm Działających w Zakresie Rozrywki, Komunikacji i Kultury (Eng: the Association of Entertainment, Communications and Culture Managers) – being, in fact, an internal organization of the ZPR – describe without beating around the bush, foreign producers of slot machines (in particular Novomatic from Austria) as top beneficiaries of the new solutions.

lob3In their lobbying notification, the ZPR also accuses specific producers of deliberate supplying Polish entrepreneurs with slot machines that were later drawn into the illegal market. As an alternative to the market monopolization project, the ZPR proposes to entrust the operation of amusement arcades to licensed private entities, while maintaining a total number of slot machines limited to 20,000.

In the further part of ZPR’s notification, its proposal forwarded to the legislator is even more interesting. They suggest to assign the monopoly to the Bingo Centrum company and the resale of shareholding in that company to the State Treasury. The shareholders of the above mentioned company include ZPR S.A., Finkorp and Casino Sp. z o.o., all from Zbigniew Benbenek’s stalls. They believe, with all their naiveté, that as a significant market player, they are authorized to monopolize it only through the change of a brand name and hue of a casino operator.

The only participant of the discussion from outside the gambling sector is Polski Klub Biznesu (Eng: the Polish Business Club, PKB), the oldest and the most respected in the Polish business world organization. Their notification includes two interesting proposals.

One regards making games of chance, card games and slot machine games – casinos, in other words – subject to the state monopoly. In the justification, the Polish Business Club points at the currently observed meager revenues and lack of proper management. The revenues are expected to grow significantly when the management and the investing system are changed. It proposes to make slot game machines, online gambling and casinos subject to the state monopoly to shape the policy of the gambling industry in a responsible manner and contribute to the significant increase of the state budget revenues, while entrusting the operation of this kind of business to the most competent entities selected by the State Treasury.

The other proposal regards changing the taxation of bookmaker bets to 20 percent of GGR (gross gaming revenues, difference between the amount of bets received on the game and the amount paid out as winnings on the game), as competitive to the currently used system. It needs to be emphasized that the above proposals are constructive, objectively justified and backed by empirical experience, especially that one of PKB’s experts is Cezary Gizka, the most competent person in the industry without a doubt.

Also proposals of changes in the draft legislation forwarded by representatives of bookmakers are very interesting.

Among the organizations responsible for particular sectors of the market, an interesting proposal was placed by the European Gaming and Betting Association (EGBA). It calls for changing a restrictive form of blocking websites of companies offering online gambling products to a Danish model, according to which all online products are available under reasonable taxation. As one could expect, this voice of reason got lost in the thicket of other proposals, mainly due to the fact that it goes beyond the principle of monopolizing the majority of gambling products, as stated in the draft legislation.

The other sensible proposals of the EGBA were also rejected, including the change of the turnover tax for bookmakers, legal advertising by all bookmakers, or introducing a transitional period or transitional licenses.

It is a pity that this voice of reason came to nothing, The organization that reaches beyond our national boundaries has more experience and practice than our local lobbyists.

lob4Stowarzyszenie „Graj Legalnie” (Eng” the „Play Legally” Association) – basically, the only proposal filed by this organization was to block websites offering illegal gambling services and prohibited advertising, as well as blocking payment. As this remark is in line with the draft, it can be said that the Association echoes the government proposals, without making any conscious effort into their in-depth sense.

Advertising that should bring profits to companies involved in activities related to sports (because this is where it is largely addressed to), will be put off for the next few years. Neither clubs nor sports as such will have any chance for support provided by bookmakers. The Register of Prohibited Websites will also effectively impede the affiliation of entities. What is more, blocking payments to beneficiaries of illegal games is simply impossible as today, no online player uses his or her bank account as financing means. For this purpose, numerous legal currency portfolios have been created. They cannot be blocked in the European Union, as they are used in various kinds of transactions, not only those gambling-related.

Another key representative of bookmakers is the Remote Gambling Association (RGA). Its suggestions do not differ from the other reasonable change notifications, unfortunately not taken into account during the works on the new gambling law. It is a pity, because the RGA proposed the modification of taxation rules: replacing the turnover tax with the GGR tax. Also the idea to withdraw from blocking websites and make the scope of gambling products, mainly domestic, more available was not understood properly.

In view of the above mentioned solutions, the lobbying of Adam Lamentowicz, CEO of Totolotek S.A., sounds quite interesting. Eight proposals were submitted and none of them was accepted by the Ministry. To remind, Totolotek is owned by Greek company Intralot anlob5d its business operations are not very intense at the moment, due to huge legal problems caused by a former representative of the Greeks, with the knowledge of the current management board of the company. The interpretation of advertising regulations has led to numerous lawsuits brought by the Ministry of Finance, also against the current management board. Apogee occurred when a daughter company placed slot machines at bookmaking activity sites without permission. In his notification, Mr. Lamentowicz opts for removing the article that prohibits to award licenses to the entities which grossly impinged concession provisions. It rightly seeks to eliminate the situations which could lead to Totolotek’s bankruptcy, due to no possibility of performing further business activities.

And the intense but short flirtation with the former management of Totalizator Sportowy turned out to be of no effect, as it did not manage to take Totolotek over. Well, Totolotek’s Greek owner should give more careful attention to his representation, especially when the company is managed by the person without any competence in this business. Family ties hardly ever guarantee success in business.

But the history of gambling saw bigger miracles than this.

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