In this two part series we take a closer look into the impact Prague’s new legislations will have on the market and companies operating in the area.
Following on from part one, we take a further look at the impact of Prague’s two new legislations which ban slots.
SlotBeats spoke to Ondrej Lapidses, CEO of Tom Horn Gaming, about the financial ramifications of the ban, their diversification plan and if the decision could see operators look at other regulated markets.
SlotBeats: Recently, the Prague City Council approved a blanket ban on slots within the city. What are the impacts of these new legislations to operators and developers moving forward?
Ondrej Lapidses: The Czech Republic has recently embraced several initiatives to ensure that responsible gaming becomes one of the most important aspects of the Czech gaming market, in both online and land-based environments.
Investing in efforts to prevent and reduce gambling-related risks and protect players makes unassailable sense. New regulations introduced across the board will make sure that things are done properly from the outset so that we won’t create a need for further regulations.
A recently introduced ban on all technical gambling games including slot machines in Prague, with other cities in the country likely to follow suit, will see a rapid shift to the online environment as players will simply not stop playing. Online environment features a set of strict measures to ensure safe and fair gaming experience for everyone, as well as to protect players from the unfavourable consequences of gaming.
It encompasses control mechanisms such as deposit and bet control, unified register of players, fraudulent and criminal behaviour control among many and as such online gaming creates a safer environment for players to enjoy a gaming experience.
Looking ahead, I believe these measures will have a positive impact on the industry and its perception among the wider public.
SB: Does this make the Czech regulated market less appealing to operators outside of the market?
OL: Not necessarily. It is clear we are gradually witnessing the rise of a completely new regulatory landscape for gaming in the Czech Republic. One of the important changes is the introduction of an alternative verification method to the current face-to-face registration of players.
This method proved to be a showstopper and hindered the growth of the online gaming segment. Based on a new procedure introduced by the new bill, online gaming operators will be able to identify their customers via a set of new KYC tools which have previously been accessible only to financial institutions.
This more careful identification of players will definitely provide a safer, more transparent gaming environment, protecting gaming customers from any illicit activities or helping fight addictive gambling.
With a ban on slot machines and many gaming venues closing down their operations, the Czech government is likely to rake in much lower amounts in tax revenue. It is possible that declining tax revenue might lead the Czech Ministry of Finance to propose higher tax rates for gambling operators and this might make the Czech gambling market less appealing to foreign operators in future.
However, the shift to online gaming, with a more practical approach to KYC presents significant opportunities for growth and online operators are sure to investigate these new market opportunities.
SB: What are the financial ramifications for you within the Czech market following the decision?
OL: As we are operating in the online environment this ban shouldn’t affect our business operation. The Czech Republic is an exciting place to be as it is a market with a huge potential and a long gambling tradition.
We’re seeing some incredible developments to revitalise the country’s gaming market already and we believe we will be able to capitalise on its vast potential when we start offering our content.
SB: What are your plans for diversification as a result of the legislation?
OL: Diversification has had a huge impact on the phenomenal growth of the igaming industry. Any disruption is a driving force behind something new. It makes us find new, more creative ways to keep up our business and adapt to new circumstances.
In this instance, the new legislation is sure to prompt land-based operators to look into the possibility of entering the online gambling market and thus diversify their business.
SB: Is increasing regulation across Europe encouraging more developers to consider emerging markets such as Latin America and Africa?
OL: All businesses constantly seek new revenue streams to increase their profits. Emerging markets continue to be topical across the gaming industry as LatAm and Asia, in particular, open their doors to regulated gaming. Africa is also a continent full of potential.
Players’ huge desire for entertaining gaming and betting experience has proved to be the catalyst for increased presence of gaming operators tapping into many national markets on the continent. It will, however, take a very strategic approach and much needed expertise to create a fertile, yet safe and transparent, gaming soil.
It is no surprise that the demands of negotiating new or newly regulated markets can prove challenging at times, but the benefits far outweigh the obstacles. The future of gaming is sure to be as bright as it is going to be interesting. We just need to unlock a potential hiding in global markets.
