Vojtech Chloupek – Partner in the Czech Bird & Bird office and Head of the Intellectual Property, Tech & Comms and Media groups in Czech Republic and Slovakia
EEGReport Magazine: Could you give us some details about your background and your expertise?
Vojtech Chloupek: I am a partner in the Prague office of Bird & Bird where I head the Intellectual Property, Tech & Comms and Media groups in the Czech Republic and Slovakia. My expertise covers primarily intellectual property and IT law, data protection as well as gaming and media law. For the past 5 years, I have been advising gaming companies on a broad range of legal issues including provision of online system operations, preparation of contractual documentation, related licensing and regulatory matters as well as enforcement of intellectual property rights. My clients include companies ranging from market leading operators to start-ups. As of 2017 I have become a member of the International Masters of Gaming Law, an association of lawyers specialised in gambling, and I believe I am currently the only member from the Czech Republic.
EEGReport Magazine: The Czech Republic’s online gambling sector has been subject to debate for quite some time now. What are the recent developments? Especially since the new legislation came into force on 1 January 2017.
Vojtech Chloupek: The adoption of the new Gambling Act (No. 186/2016 Coll.) was eagerly awaited by most of the gambling operators and perhaps even general public. The previous law (known as Lotteries Act) was rather outdated (being adopted in 1990) and even though there had been multiple attempts to improve it, none of the amendments were able to properly react to the change the Internet had on the gambling industry.
One of the most controversial topics in the new Gambling Act has been the power of the Czech Ministry of Finance to place gambling operators on a so-called black list and especially whether such power is not in violation of the constitutional law. In short, the Ministry can now initiate proceedings with gambling operators who provide their services in the Czech Republic without the respective Czech gambling licence and put them on a list of unauthorized gambling operators. Subsequently, Internet service providers are required to deny access to Czech residents trying to connect to such black-listed gambling operators’ servers and payment service providers are required not to carry out any payments in benefit or to the account of bank accounts of such gambling operators. It is perhaps worth noting in this respect that the wording of the Gambling Act suggests that an “operation” of gambling does not consist only of typical gambling activities but also of other activities that are organisational, financial and technical in nature and that are closely related to operating a game – for instance, domain hosting might be considered as a gambling operation and thus its provider may also be placed on the black list.
This concept was challenged at the Constitutional Court by a complaint of certain Senators of the Czech Parliament who sought to repeal the respective parts of the Gambling Act requiring the Internet service providers to deny connection to the unauthorized gambling operators’ servers. According to the complaint, such practice would amount to “unconstitutional censorship” and would place unreasonable burden on persons who are not actually breaching the law. The Constitutional Court did not find any violation with constitutional law and dismissed the action, suggesting however that the Ministry must take care that the constitutional rules are fully respected when implementing and enforcing the Gambling Act.
Besides this topic, there have been also several interpretation issues with respect to certain sections of the Gambling Act as well as relating legislation, such as anti-money laundering, advertising, tax, etc. These will need to be cleared out soon.
EEGReport Magazine: As we all know, there are different regulatory models in every jurisdiction, which makes operators look twice before entering legalized markets. Is this the case of the Czech Republic? There hasn’t been a huge interest shown by the large international operators with this new regulation, do you feel that there will be new changes which are going to pave the way for a much successful market in terms of tax revenues?
Vojtech Chloupek: As far as I know, a number of major online gambling operators have applied for the Czech gambling licence and are willing to comply with the new rules, or are at least considering it. Pokerstars, for example, obtained a Czech gambling licence earlier this year. I would therefore actually say that online gambling operators have generally been interested in the Czech market but it is also fair to say, on the other hand, that some of the requirements of the new law are rather restrictive and so is the Ministry in licence proceedings.
With respect to land-based gambling, even though the Czech licensing procedure and overall gambling legislation is not as strict as it may be in the case of some other European countries (no state run monopoly or any total limit on the number of issued gambling licences), it is hard to expect any boom in land-based gambling in the Czech Republic any time soon. The traditional Czech gambling land-based operators have strong market positions and, given the fact that not only the online casinos’ revenues are starting to catch up with those of the land-based casinos but also the amount of funds required to open and run a new gambling venue is lower, it is not surprising that the willingness of foreign operators to invest in the brick and mortar gambling might just not be there anymore.
Another factor that might be making the foreign operators hesitant as to whether to enter the Czech market might also be the fact that the regulator published certain secondary legislation a bit too late and some is not publicly known even now (e.g. decree setting out the technical requirements on remote access to gambling and financial data). This Ministry’s failure to establish clear rules and guidelines certainly does not allow the gambling operators to fully assess the operational costs of their business prior to entering the Czech market.
Let’s see whether this situation changes in future when the dust settles on the new Gambling Act, all the applicable legislation is final and all major interpretation issues are resolved.
EEGReport Magazine: What are the key sectors in the Czech gambling market based on niches? Sports betting, casino, poker?
Vojtech Chloupek: In my opinion the key sector, when considering the impacts of the Gambling Act, is online gaming. This may not be supported by any statistical evidence at this point. There are, however, hard numbers for traditional gambling published by the Ministry of Finance (for types of gambling as regulated by the old Lotteries Act), where the key sectors ranked by gross revenue for the year 2015 were: technical games with € 670m revenue, odds betting with € 208m revenue (of which € 154m came from online and € 54m from land-based), and lotteries with € 200m revenue.
Official revenue numbers for poker are hard to obtain, since cash games revenue numbers are accounted for in another gambling category. However, according to the Ministry’s official numbers, gambling operators’ revenues from tournaments in casinos for 2015 totalled over € 3m and internet card tournaments and games grossed close to € 1.5m which is considerably lower than traditional types of gambling.
All gambling types combined in the year 2015 grossed over € 1.1 billion in the Czech Republic.
To avoid any misunderstandings, I should note that I have been using the terminology of the Gambling Act, even though the Ministry’s analysis operates with the old terminology of the Lotteries Act and thus the Ministry’s findings had to be redistributed in accordance with the new categories. The above stated figures do not account for the revenues from all of the online games revenues, since the Lotteries Act did not allow the gambling operators to carry out most of the games online. Also, revenues of the gambling operators who operated in the Czech Republic despite not having a Czech licence were obviously not published and are not part of the above figures. The revenues of Czech licensed odds betting operators, as stated above, might therefore represent just a fraction of the whole market’s revenue.
EEGReport Magazine: Who are the key operators at the moment and how is the taxing done in percentages?
Vojtech Chloupek: I hope I will not omit anyone when I say that for technical games (VLTs, slot machines, etc.) the key operators are SLOT Group, SYNOT TIP, BONVER WIN and ADMIRAL CASINOS, whereas for odds betting and lotteries, the big players are SAZKA, FORTUNA GAME, TIPSPORT, CHANCE and SYNOT TIP.
The gambling tax rate is set at 23 %, except for technical games where it is 35 %. Land-based technical games operators have to account for a “minimum tax” for each licensed technical game device that is €340. The tax base is the difference between accepted bets/wagers and paid out prizes, while each game (odds betting, live game etc.) is calculated separately.
EEGReport Magazine: What advice would you give to potential new entrants considering the Czech Republic (operators, affiliates, suppliers etc.)?
Vojtech Chloupek: There is probably no one-size-fits-all advice for all the potential new entrants other than that their decision to enter the Czech market will obviously need to be based on a sound business (including tax) and legal analysis. Surely it may be necessary to jump over several legal and other regulatory hurdles but if there is a strong business case for the entry then it may pay off in the long term.
That said, I would certainly advise operators against providing gambling activities without the respective Czech licence. Although website and payment blocking of the blacklisted operators have not yet been put to hard practice test, it is clear that the approach of the Czech regulator will be much stricter than before 2017.
EEGReport Magazine: Do you think that a common regulatory model that can be adopted on EU level would be a good practice? Economically speaking EU countries differ a lot, thus having an all governing law in every country regarding the online gambling sector could prove to be a major setback for many less developed countries in Eastern Europe. This is of course my opinion, what is your expert opinion on such a topic?
Vojtech Chloupek: Gambling has traditionally been the domain of national regulation and so introducing a single unified regulation at the EU level might be rather difficult to achieve from political perspective. And yes, you are correct to say that EU countries differ a lot in terms of economy and perhaps also general attitude of both regulators and customers to gambling. On the other hand, there is a clear overall tendency to regulate many areas on EU level and a lot of these areas will, more or less, affect also gambling operators. For example, I can think of data protection, AML, payment services, consumer protection and other areas of law that are and will become even more regulated on EU level. I can therefore certainly imagine that many aspects of online gambling will fall under one EU regulation (especially with respect to consumer protection) and it may perhaps be especially desirable for new things, such as e-sports, newly emerging games or games using virtual currencies, where even the less developed countries could benefit from unified approach and level playing field.
EEGReport Magazine: Online gambling has always brought along online payment processors. What is the current situation in the Czech Republic regarding such activity? Is there a second tier license for such services?
Vojtech Chloupek: There is no gambling specific second tier licence for payment processors. There are, however, quite a few new obligations that the payment processors have to comply with and should be therefore aware of. These relate for example to the above mentioned black list where the payment processors will be requested to block payments to unauthorized gambling operators. There are also certain anti-money laundering procedures to be complied with.
EEGReport Magazine: Looking further afield, where are the major emerging opportunities in Eastern Europe for operators at this moment?
Vojtech Chloupek: I believe the Czech market is not yet accustomed to the broad scope of online gambling offerings. While many consumers used to play at unlicensed operators in the past, the number of Czechs gambling online is likely to increase and may eventually surpass the traditional land-based gambling figures, partly also due to the introduction and promotion of new online games (e.g. fantasy leagues). This may be true also for other Eastern European countries where gambling markets gradually open up and where online gaming, in its broadest sense, picks up.
Well-run land-based casinos can be expected to thrive because they will still provide players with real life gambling experience that is hard to achieve on a PC or mobile phone. On the other hand, the number of gambling rooms (arcades) and revenues from land-based technical games may slightly decrease in the long run, assuming that the shift to online together with developments in mobile gambling technology will provide an appealing substitute to small gambling facilities with VLTs and slot machines who face increasing regulation from local authorities anyway.
Affiliate Superstars: Dan Bâra of Pariuri1x2 (EEGReport Magazine – Issue 6 – June – September 2017)
Meet Dan Bâra, a sports betting/tipster/editorial veteran who’s been active in this field for many years!!! Dan used to write for a famous newspaper, hosted a radio and TV shows as well.
Name: Dan Bâra
Living in: Bucharest
Favorite Food: Spaghetti
Must Read Book: Inverting the Pyramid: The History of Football Tactics by Jonathan Wilson
Profession/Job title: Journalist
Hi Dan, tell us a bit about yourself, we would like to know who Dan Bâra really is, one of the main persons behind Pariuri1x2.ro. What was the key idea of developing this great betting, tipster website?
Dan: Hi and thank you for your interest in our project. There are many ways to look at a game and people have different ideas and a lot of subjectivity. But what is the common element in this? That is what I always wanted to find out and the result I think is a very good start for making a bet. I was looking to simplify the knowledge and the ideas to one simple truth, like the one a 10 year old can tell in a heart beat.
Tell us a bit about your past, and we refer to your past in the betting/tipster industry!
Dan: I started by playing sports games. Especially football, but I was no stranger to any activity involving effort. I think I have a lot of energy and I need to spend it, so cycling, running, body building and playing tennis were current activities when I was young. Then I started to watch sports on TV after the Romanian 1989‘ so called Revolution. The TV programs were more generous with sports than they were before and I was eager to watch everything. A turning point was when I heard about sports betting. That looked very simple at the first glance. I was amazed how my friends were loosing on their tickets so I wanted to help. Therefore I started an website with sports analyzes and betting tips.
What were the bumps on your road when you got started and how did you overcome them?
Dan: In 2006, after one year of struggling on my own, I had the chance to get a job at the Gazeta Sporturilor newspaper. They had an opening in sports betting so we started to walk together on a 9 years long road. First, I had the chance to write on their website and soon I even made my debut in the newspaper. Again, an year latter, I was on TV and radio. Amazing opportunities! However, it wasn’t easy. I had to overcome my stage fright, I had to change and adapt, to learn more and to become very disciplined.
Next to your website you’re also hosting a TV show called “Un Pont Pe Zi” (A Tip per Day). Let us know how the show is going and also from where came the idea for it?
Dan: I left Gazeta Sporturilor in 2015 because of the changes in the press field. I wanted to start something new and I teamed up again with my old friend and colleague Sabin Pîrvan (from my previous job) in a new project. We knew that we had the experience on our side and still a lot of new ideas to put into practice. We started with a Internet blog and then we created our own website www.pariuri1x2.ro, our Facebook page and our TV show. They were the next logical steps. Now, they are all top quality products because we do it for our people, the ones who need them and the ones who are following us. We respect them and offer our best efforts every day.
We have surfed your website (Pariuri1x2.ro) and found some pretty high quality content. Are you writing it by yourself or you have a team of people writing for you?
Dan: Our main advantage was that we had a lot of trust in us. We invented before a lot of things in the betting editorial area and we felt that our approach makes a difference. So we kept doing our thing. Soon, we started selecting people for our editorial team. Only the best of them were selected and they are working with us now. Together, we make a very solid team, the best in the country and one of the best worldwide.
How do you keep the content fresh and devoid of clutter when a lot of fluff and nonsense appear on the Internet on a daily basis?
Dan: We are journalists and we do solid documentation. We check every information and we also have our very own point of view. The team is always watching the sports events and the ideas are at the first hand.
How about your Youtube Channel, we know that a couple of days ago the channel had it’s first million views?!
Dan: The Youtube channel is the biggest of this kind for the sports betting fans in Romania. It has an impressive increase and all of it it is natural, organic increase. At the time of answering this, it has over 1,2 mil views and 6k subscribers that receive daily updates. The channel hosts parts of the TV show ( most interesting moments ) , a weekly podcast , selections from a new sports TV show where I am co-host ( Unspe Metri ) and a twice per week episode series made by a very popular person in the betting world – Doru Craciun which is also commentator for the Liga 1 matches.
We are sure that you receive daily messages from Affiliate Managers showcasing their products. You of course select them by the brands they work with; but what are your thoughts on how Affiliate Manager-Affiliate relationships should be built?
Dan: The relationships should be based on trust and stability. We only work with long term deals and we select closely the partners which we work with. As we invest tremendous work and money into our project – we expect that our partners to take this into consideration and work with us to improve performance. A little over 2 years ago we started being a very low profile website and now we are number 2 in the market. This should say a lot to the affiliate managers that work or want to work with us.
How do you see the future of the online sport betting industry? For instance, will it become a truly global phenomenon in the near future?
Dan: Well, it is already a global phenomenon and as everybody saw in the last years everything is shifting more and more into online and mobile. Biggest names in the market already have over half of the bets coming from mobile. The expansion to e-sports and other new type of bets shows that this industry constantly adapts and grows no matter what. So betting is here to stay, to increase and to be a part of any new technology or gadget that might appear.
What is your opinion in regards to licenses for online gambling/betting affiliates? How does the Romanian market look, and how do you feel about the present legislation?
Dan: Not to leave the „betting“ field, I would say that the legislation for the online gambling in Romania was a winning bet placed by the government. The licensing costs for affiliates are not the lowest ( 7000 EUR/year ) but any decent person who has a little knowledge can do an affiliate business that would recover this money in a year. It is also a guarantee of trust between operators and affiliates and it ensure a fair competitive market.
How about the situation of the Romanian sports betting market, how does it look in the present, and in which direction is it evolving?
Dan: Regarding the market – it shows a month-to-month increase since the „regulated“ era has begun and based on the size of the traditional land based market it will continue to go up. Players are more and more attracted by the online and companies invest big part of the money in advertising.
Can you name one change that you want to see in the sports betting affiliate ecosystem?
Dan: Taking into consideration that affiliates account for 15-30% of an operator’s revenue I think that affiliates should have a stronger voice in regards with what an operator plans. Being in contact with the players all day long, an affiliate has a great feedback and knowledge of what the market wants and can constitute the key to delivering a more appealing and successful product which in the end would benefit everybody.
What advise you would like to offer to the new affiliates who are looking to venture into this great industry?
Dan: The best advice is that they need to be ready to change, adapt and improve every day. It is not a complicated business and it still can generate a good income – even if started from 0, but as in every industry – success can be achieved only after many hours of hard work and study.
Who is your favorite celebrity/sports person?
Dan: I grew up with some incredible sports legends and the best of them was Diego Armando Maradona. Old school!
If you would just open your YouTube search bar, what would you search for?
Dan: Iron-man contests from Kona, Hawaii.
Back to work. Do you attend any online gambling/sports betting conferences? If so, which one is your favorite and what is your most fun experience?
Dan: Yes, I am attending to conferences and if I am not present then my partners or the marketing team are present. The most constructive ones are the London conferences and the most fun are Amsterdam and a long time ago Barcelona.
How do you rate the chances of Eastern Europe becoming potential gaming hotspot of the future? Where do you think the region must improve upon?
Dan: It is for sure that this region will influence a lot the face of the gambling in Europe. Compared with markets like UK, France, Italy, Spain or Denmark which are saturated and competition is very big – Central and Eastern Europe is like a virgin market. We could compare it with the gold rush. The only problem that this region has it’s the geopolitical stability and sometimes the fact that the markets are not really predictable. ( any day you can be put in front of a situation in which a country decides to ban online gambling )
Alright, here comes the fun part…., where would you like to travel in Eastern Europe, some part of the region maybe that you haven’t visited yet and favorite destination around the world.
Dan: Moscow, I think, from the Eastern Europe. Also, from the rest of the world I would like to see the beautiful city of Rome and travel to Africa.
Where you wouldn’t want to travel in Eastern Europe?
Dan: There isn’t such place.
What is your opinion about GAV (gamblingaffiliatevoice.com)?
Dan: I will be very short and clear about this. I think that it should go on and should evolve into an association at EU level which could stand up for affiliates and the industry. This is something missing since a long time and all affiliates must understand that even if we are all competitors on the same market – together we are stronger and only in this way we can fight for our rights.
Event Report: Affiliate Grand Slam – Mission Accomplished, Wheel Reinvented! (EEGReport Magazine – Issue 6 – June – September 2017)
The demand was there for all to see, then the organisers behind SiGMA came up with the magic formula: limit the conference to five affiliate managers and open the flood gates (with strict due diligence) for affiliates.
Affiliate Grand Slam represents the first conference in the history of affiliation where affiliates could apply for an all-inclusive VIP treat, including flights, five-star, two-night stay at the Hilton, excursions, lunches, dinners, and parties thrown in the mix.
Only five operators were allowed to host the Grand Slam, plus another five non-operators were allowed to sponsor it.
The event started off with 250 affiliates flying in to Tallinn from all corners of the world on Thursday 27th April. The SiGMA crew greeted each affiliate at the brand new, five star Hilton Park.
That same evening, each operator sat down privately with give-or-take fifty affiliates for a dinner within the hotel itself. Betting Gods, Olybet, PlayOJO, Quasar and Videoslots lavished with affiliates and nurtured new working relationships in a friendly environment. Good wine in abundance.
The night was far from over. After dinner, all guests headed down to Olympic Casino within the Hilton itself for welcome champagne, dark chocolate, cigars and a free-roll, networking poker tournament.
The organisers were hoping the night would end there and that affiliates won’t head out in the wilderness of Old Town, but, as anticipated, half their hopes went up in flames.
Still, next morning, breakfast was brimming with activity and all affiliates, bar a few casualties, seemed eager for the conference to start. Each operator gave a small presentation, followed by a series of quality workshops. Mini stalls, an exquisite buffet lunch table, coffee and Baltic treats cluttered the meet-market outside the conference hall, where handshakes and business cards were being exchanged.
Following a few hours at the Hilton spa, it was time for the big traditional dinner! Everyone headed to Olde Hansa, walking through the narrow, cobble streets of charming Old Town, for a feast back in time. Traditional cuisine made its way on all tables for everyone to share while more business cards exchanged hands.
Shortly after dinner, the closing night awaited at the Olympic Casino for a VIP, strictly by invite nighter-bender. Few guests joined the party, but the organisers would not elaborate. We can only guess how the night unfolded with 250 affiliates in this charming Baltic city.
The success of Affiliate Grand Slam was such that the industry won’t wait another year for the organisers to launch the second edition. A new city to uncover, new hosts, new affiliates. This is Affiliate Grand Slam. The wheel has been reinvented.
Log on to www.affiliategrandslam.com or www.maltaigamingsummit.com for details about the next event. If you’re interested in hosting or sponsoring the next AGS get in touch with organisers on +356 99263626, by email at email@example.com or by skype at eman.pulis.
Event Report: First International VR|AR Gambling Conference in Prague (EEGReport Magazine – Issue 6 – June – September 2017)
On April 3, 2017 in Prague, Smile-Expo held the first international specialized VR|AR Gambling Conference, dedicated to implementation of innovative technologies in gambling.
Smile-Expo is a leader in carrying out large exhibitions and conferences in the field of advanced technologies. We’ve set a goal to create a communication platform for specialists of the gambling and AR/VR technology markets, and achieved it: our event brought together leading experts from all over the world (the USA, Spain, Austria, Germany, the Czech Republic, Israel, the Netherlands).
The conference included two subsequent streams: Business and Developer.
This section included presentations of six experts:
- founder of Advir.co Samuel Huber;
- founder of ViARsys Konrad Gill;
- CEO at Games fortuna Tal Zamstein;
- co-founder of Alea/SlotsMillion Alexander Tomic;
- owner of KWP Limited Kevin Williams.
The audience marked the two latter speeches with the following topics: “VR in eGaming” and “Mixed Realities Gaming’s Technology Jackpot”.
By the way, Kevin Williams thanked our company and marked that VR|AR Gambling Conference made invaluable contribution to the industry development.
Reports of this section were informative and topical as well. The floor was taken by:
- Artur Sychov, angel investor at I-MMERSIVE GmbH;
- Alexander Bragin, creative director at VR2GO;
- Amir Ebrahimi, team leader at Unity Technologies.
Lectures were practical and held attention of the audience from the beginning to the end. People have even taken photos of the presentation of Amir Ebrahimi from Unity Technologies on the topic “State of the VR Industry in 2017” in order not to miss useful information and apply it in practice.
We have chosen an ideally targeted line-up of speakers and guests, so VR|AR Gambling Conference was carried out in the format of a lively discussion: audience asked clear questions and received vivid answers.
There was a network demo zone from such companies as Advir, I-MMERSIVE GmbH, VR2GO, etc., which became a convenient platform for establishing relationships in the field of gambling. Visitors were able to test the latest developments of VR/AR products there as well.
The event organizer, Smile-Expo that always implements the most innovative and interesting projects, expresses gratitude to all guests and participants for their interest and engagement in the event. See you at the next conferences!
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