Land betting shops in the Czech Republic are taking strain following the government's decision earlier this year to regulate and licence online gambling, reports the Prague Post. Local companies welcomed the move to free up the Internet and enable them to compete with offshore firms, but initial indications are that it has led to a decline in land business.
The newspaper reports that as a result many of the country's largest betting companies, such as Tipsport, which owns 1 020 shops in the Czech Republic, are now planning to close dozens of locations. After only three months, online gambling accounts for 30 percent of Tipsport's business, said spokesman Lubomír Ježek, who expects an even greater interest in online gambling in the future.
"We see the Internet as a new opportunity, rather than something to replace brick-and-mortar shops," Ježek said.
Ježek hopes that Czech firms will now lure Czechs away from foreign gambling companies. "After the first analysis, we see that many clients who used to bet online with foreign companies are coming to Tipsport," he said. "Czechs like to bet with Czech companies, and we think this will continue."
Tomáš Bahník, a spokesman for the Fortuna betting group, which has about 650 shops in the Czech Republic, told the Prague Post that Internet betting has skyrocketed since the new legalization, accounting for 25 percent of total business and causing a 5 percent decline in business in their land outlets. Like Ježek, Bahník expects that Internet gambling will increase, resulting in the closure of some of Fortuna's less frequented shops.
"We will optimise our branch offices system in the long term," Bahník said. "We will reduce the number of [land] offices to work more effectively."
The Prague Post report highlights a complaint by local betting companies on the prevalence of foreign online betting firms doing business in the region. Local operators say that such companies have an unfair advantage because they are not subject to Czech law and taxes.
"Foreign companies have always worked here illegally," Bahník said. "Making the market free for all companies was the solution for all interested parties. But Czech companies still have worse conditions than foreign betting companies, which don't have to pay taxes."
Radek Ležatka, a spokesman for the Finance Ministry, said that the regulation of online gambling was only accepted by the government when Czech companies found a way to monitor their online users and exclude underaged gamblers..
Under the new Czech law, those who want to gamble online must first register in a shop, providing verification that they are over 18. If they cannot provide identification, they are not allowed to access the online gambling portal.
The latest figures from the Finance Ministry show that gambling is a significant industry in the Czech Republic, accounting for more than 108 billion Koruny (180 CZK = Euro 6.61726) in bets in 2007. Ježek explained that most Czechs like to bet on sports results, specifically soccer, which accounts for 60 percent of Tipsport's business. Business in branches may be down, he said, but there is no sign that the gambling industry is losing popularity.
"We have the same odds on the Internet and in our locations, and we see it as a big advantage to be able to offer both types of gambling to our customers," he said.