Republika Srpska Lottery Tender Declared Unconstitutional

aleksandra.jankovic — Fri, 06 Nov 2020 14:08:41 +0000

Significant step in restoring the rule of law at the RS betting and gaming market

The Republika Srpska Constitutional Court (case number U-67/19) annulled as unconstitutional and illegal The RS Government Ordinance which served was legal ground for the Republika Srpska Lottery 2019 public tendering procedure to form a joint enterprise operating electronic games of chance. The process, resulting in joint-stock enterprise being incorporated with Swiss-based company Casinos Austria VLT AG, is now officially unconstitutional.

The decision is de facto a full acknowledgment of validity of arguments presented by EOGL members from March 2019 onwards. The unprecedented public tendering procedure caused serious market distortions and paved the way for state-sponsored cartel in Republika Srpska betting and gaming market.

Series of Breaches and Regulatory Misconduct of the Republika Srpska Lottery and Ministry of Finance

Back in 2019, the RS Parliament approved the new Gambling Law sponsored by the Ministry of Finance via urgent procedure and without public hearings. From the day one, its provisions blatantly breach the principles of the rule of law, inviolability of property rights and free enterprise. The Law skyrocketed the incidence of underage gambling. Terminals for electronic games are now allowed to be placed within catering establishments and entertainment facilities where minors are predominantly circulating each school day.

The most incomprehensible segment of this public tendering was a unproportioned legal and economic eligibility criteria – annual business turnover of at least 3 bn EUR in each of three financial years prior to public tendering, no participation allowed for consortium as a form of bidding entity to match the turnover threshold). This was a clear intention to create unfair barriers of entry to any company so far present in national gambling market.

EOGL members look forward and rightly expect the recent ruling will bring us closer to restoring the rule of law at the RS betting and gaming market.

EOGL INTERNATIONAL CONFERENCE IN BANJA LUKA: NEW GAMBLING LAW IN REPUBLIKA SRPSKA NEEDS TO BE URGENTLY REVISED, THE EXPERTS AGREE

aleksandra.jankovic — Thu, 11 Jul 2019 17:39:25 +0000

The de facto monopoly in gambling Industry will result in sharp decrease in public income and negligence of juvenile gambling expansion in Republika Srpska.

These are the main conclusions of July 11 EOGL International conference in Banja Luka, with the main topic New Regulatory Landscape in Southeast Europe – Implications for the Responsible Gaming Standards. On this occasion, the Europe’s leading Industry experts and the representatives of all Southeast Europe associations of legal gambling providers also emphasized the immeasurably damaging effects the legalized monopoly, taxation of sports betting winnings and exclusive right to operate electronic games to State Lottery will have for the growth of juvenile gambling, black market and sharp decrease of public income to the country’s economy.

More than 2.500 workplaces to be closed

Apart from the comprehensive overview of latest regulatory changes in Southeast Europe region, the Conference panelists warned that latest changes to Republika Srpska Gambling Law are directly contravening the EU Internal Market, anti-monopoly and state aid rules and seriously threaten to cancel all the standards relating to consumer, underage and vulnerable groups protection. As a direct consequence, representatives of private operators informed the public that, should the current regulatory regime remains in force, they would not have other choice but to close their operations and lay off more than 2.500 of employees.

The model of lottery-sponsored gambling monopolies

The presenters explained the overwhelming regulatory model by which the lottery-sponsored monopoly in gambling sector is illegally established throughout the region. By introducing the changes to gambling laws via urgent procedure (without any legal grounds), legal and licenced private operators are unilaterally revoked their licences, disabled to pursue their legitimate economic interest and to enjoy property rights guaranteed by national Constitution and EU conventions.

Lessons learned in the region: The Constitutional Court of Montenegro

All the panelists provided valuable insights and arguments on why monopolies in gambling markets, such as in the case of Republika Srpska, endanger the responsible gambling standards and protection of minors at the first place. It has been pointed out to the case of Montenegro, where the Constitutional Court assessed as illegal and unconstitutional the practice of deploying betting terminals within catering facilities.

Unequal market position of sports betting operators

The Conference also underlined the non-sustainable and unequal regulatory treatment of sports betting providers throughout the region, usually articulated through taxation of winnings and total ban of cash deposits to fund player online accounts, in spite of the fact both national and EU and European Central Bank regulations guarantee the equality of cash and payment cards as legal payment methods. Such practice directly encourages player migration to unlicenced websites and black market.

Given that the industry representatives in Republika Srpska have already filed a number of lawsuits against the state officials, all the participants have once again urged the competent authorities to follow best examples of regulatory and institutional order from the EU markets.