GAMING: Government Proposes Reduction of Gaming Licenses

Finance Minister Slavko Linic presented the government’s proposed legislation regulating the issuance of licenses allowing gaming providers to operate gaming machines in Croatia. The present legislation allows for a maximum of 70 licenses nationally, while the new legislation would reduce this to 40. Under the present legislation, the majority of gaming providers’ licenses, which were given as concessions, will expire this spring.  Since the government had previously amended the national concession legislation, which excluded the gaming industry, this would mean that the government would not have a legislative framework to issue licenses to replace the previously issued concession.

In mid-2012, the government proposed new legislation to regulate the industry.  However, after the 1st reading of the legislation in the Sabor, the 6-month deadline for the government to return the amended legislation to the Sabor for the 2nd reading expired in December 2012. Therefore, this proposed legislation will no doubt be sent to the Sabor under the urgent procedure in order not to have a “black hole” in legislation, which would essentially halt all gaming operations.

Linic explained the reduction of gaming licenses to 40 as a means of increasing the state’s ability to supervise and regulate the industry.  He also stated that their analyses show that 40 licenses are adequate to cover the Croatian market.  This is an odd rationale, since it means that the government is directly influencing the gaming industry market, as opposed to regulating the industry.

In general, it would be in the state’s interest to issue as many operating licenses as possible and allow them to compete equally for the industry’s market share; it is interesting to note that the state-owned Croatia Lottery gaming provider has proposed that they be the exclusive distributor of gaming machines.  This would mean that every gaming operator would be required to procure their gaming machines from the Croatia Lottery, who imports the machines, since no machines are produced in Croatia.

See more