Slot decline hits Czech gambling market in 2018
Revenue from regulated gambling in the Czech Republic fell 21.3% in 2018 to CZK31.3bn (£1.1bn/€1.2bn/$1.4bn), with the decline down to a lower contribution from slot machines.
Players in the country wagered a total of CZK 249.4bn across all products and channels, up 11.3% from 2017, and won a total of CZK218.2bn, according to figures provided to iGaming Business by the Czech General Directorate of Finance.
However, slots, referred to as “technical games” by the Directorate, struggled during the year, with revenue dropping 39.3% to CZK14.8bn. Land-based slot revenue plummeted 42.4% to CZK12.9bn, and online revenue was down 4.8% at CZK1.9bn.
This follows the introduction of strict controls on what bonuses land-based venues can offer players from August 2017. Tighter rules around customer identification and registration were then issued in March 2018, requiring all casinos to verify the age and identity of all patrons.
Other casino products, such as table games - “live games” according to the Directorate - saw revenue grow 8.0% to CZK2.3bn, driven by a strong land-based performance. Online revenue amounted to CZK175.1m, compared to CZK119.5m in 2017.
Lottery revenue was up 13.8% to CZK6.7bn, driven by a strong retail performance, with the channel accounting for 89.9% of the total. Online lottery, which has been legal since January 2017, saw revenue grow 78.0% year-on-year to CZK670.6m.
Revenue from fixed-odds sports betting, meanwhile, was up 2.0% to CZK7.6bn. The majority of revenue for the vertical (84.3%) was generated online, with the land-based contributing falling marginally to CZK1.2bn.
Totalizer, which is only available in physical outlets, saw revenue almost double, albeit from a low base, to CZK4.7m. Bingo, another land-based product, saw revenue decline to CZK7.4m.
As a result of the decline in slot revenue, for which operators pay a 35% gross revenue tax, the government’s tax take from the industry fell 20.3% year-on-year to CZK9.7bn.
The figures are the second set of full-year results published since the country's revamped gambling regulations came into force in January 2017. While the new regulatory framework was designed to encourage international operators to secure licences, high taxes and lengthy administrative processes, such as in-person registration requirements for igaming sites, have limited its appeal.
The tax rate is set to grow even higher, after the Czech government agreed to increase taxes on gambling from January 2020, as part of a wider effort to limit the availability of addictive products, services and substances. This will see the tax rate on lotteries, non-slot casino games and bingo rise from 23% to 30% of revenue, with fixed-odds betting tax increased to 25%.
Image: Sébastien Avenet