The issue of gambling and the operation of gambling companies is not sufficiently regulated in Slovak legislation, and as a result, there are shortcomings. In this article, we outline the legal framework and conditions for operating gambling activities in the Slovak Republic, while attempting to highlight certain shortcomings, particularly in comparison with other legal systems.
The primary legislation governing gambling is Act No. 30/2019 Coll. on Gambling and on Amendments to Certain Acts (hereinafter the “Gambling Act”). Gambling legislation has undergone several significant changes in the past, with the current Gambling Act entering into force on February 8, 2019, and taking effect on March 1, 2019. It introduced significant changes, particularly in the area of online casino operations, and also ended TIPOS’s monopoly in this sector. Also, as of the date it took effect, a new authority was established—specifically, the Gambling Regulation Authority, which falls under the jurisdiction of the Ministry of Finance of the Slovak Republic. Its responsibilities include, for example, assessing compliance with the conditions for operating online casinos and subsequently issuing licenses for their operation.
The basic prerequisite for operating an online casino in the Slovak Republic is a valid permit and a license issued by the Gambling Regulation Authority. This resulted in the disappearance from the market of several “black market operators” who had previously provided online gaming services without any authorization, primarily foreign entities. Today, therefore, any entity, whether domestic or foreign, must hold a valid license; otherwise, it will not be permitted to provide such services. Currently, there are a total of 9 companies operating in the online casino sector with valid licenses, though this number seems negligible compared to the thousands of foreign online casinos, which often offer their players more favorable terms than Slovak online casinos. The question therefore remains: why should a potential player choose to play at one of Slovakia’s legal casinos when foreign operators offer far “more lucrative and advantageous” deals compared to domestic ones? The answer is very simple—under current legislation, it is illegal for a Slovak player to gamble at a foreign casino. While these foreign casinos could offer their services to Slovak players, they could do so only if they held a valid license. However, the conditions for granting a license in Slovakia are far stricter than in other countries, such as Malta; therefore, these entities have no incentive to enter the Slovak market but instead choose the jurisdiction that is most advantageous for their business.
Foreign casinos can subsequently be divided into two groups—first, those that do not even allow the registration of Slovak players, meaning a Slovak player cannot play at that casino, and second, casinos where the registration of Slovak players is permitted, but, in the context outlined above, we note that this constitutes a violation of the Gambling Act.
This raises the first issue, which is a potential conflict with the European Union’s single market, whose fundamental principle is to ensure the free movement of persons, goods, services, and capital within the European Union’s single internal market. In this regard, however, reference may be made to the Court of Justice’s judgment in Case C-347/09, Dickinger and Ömer, dated September 15, 2011, according to which, cit.: “moral, religious, or cultural particularities, as well as the morally and financially harmful consequences for individuals and society associated with gambling and betting, may justify the existence of a margin of discretion for national authorities to determine the requirements encompassing consumer protection and public order, in accordance with their own value systems.”
Based on the foregoing, it can therefore be concluded that it falls within the competence of the Slovak Republic to determine its own conditions for the operation of, for example, online casinos in this matter, regardless of foreign legislation. However, this only highlights the lack of legislation at the European Union level that would ensure harmonization in this area among member states.
Nevertheless, the legislation must not be discriminatory and must contain the same conditions for both domestic and foreign entities. This is also confirmed by the Judgment of the Court of Justice in Case C-49/16, Unibet International Ltd., dated June 22, 2017, which holds that if legislation already permits private entities to operate gambling activities, it cannot contain restrictions that would discriminate against foreign operators and, conversely, favor domestic operators. The assessment of whether a given restriction is discriminatory or not will always depend on the specific circumstances of the case.
Another shortcoming of the legal framework, whether at the national or European level, is the lack of sanctions against entities that significantly violate their obligations regarding the provision of online casino services. For example, as mentioned above, we noted that there are also foreign entities that allow Slovak players to register and, following successful registration, permit them to play in their casinos. However, such conduct clearly constitutes a violation and circumvention of the Slovak Gambling Act, at the very least because the entities in question do not hold a license to operate online casinos. However, since these are generally so-called imperfect legal norms—that is, those that do not contain a sanction, meaning they do not specify how a violation of a legal obligation will be penalized—it is not possible to impose a penalty on such entities, for example in the form of a financial fine, under the Gambling Act; but we believe that such conduct could meet the elements of a criminal offense under Section 230 of the Criminal Code, pursuant to which the crime of unauthorized operation of lotteries and other similar games is committed by anyone who operates a lottery or other similar game without a license. The basic form of this criminal offense is punishable by imprisonment for one to five years. However, we are currently unaware of any such conduct being prosecuted.
The law firm Hronček & Partners, s. r. o. also provides its clients with services regarding the acquisition of permits and licenses for specific activities, the performance of which is conditional upon obtaining the relevant permit. In such cases, our staff will handle all the necessary administrative work to obtain the required permit on your behalf, so that you can fully focus on your business. If, for example, you are interested in operating an online casino and obtaining the necessary license, we are fully at your disposal.
