Eye on Europe - Dec. 20, 2006

20 December 2006

Tip-and-Run -- Playing lotto online is still possible in Germany; the State Gaming Treaty was not signed at the Minister President Conference in Berlin on Dec. 13, 2006. There were obviously still doubts with regard to constitutional and EU legislation. Meanwhile, an EU notification process is taking place concerning the new draft State Treaty. The EU must approve the treaty for it to come into force. In any case, a transition period is included for private brokers until Dec. 31, 2008. Jens Schumann, a member of the executive board of Tipp24 AG, says that for now everything is business as usual. "We will continue to operate our Internet business in the same way as before," Schumann said. "We are very confident that there will be a positive decision on a European level, as the current draft contains serious infringements of EU legislation. We will continue our numerous talks with the state parliaments, as the brokerage of state lotto and lotteries has to be excluded from the planned Internet ban." A recent representative survey carried out by the Bremer Institut für Drogenforschung (Institute for Drug Research Bremen) indicates that that lotto should not be classified as addictive.

Tipee -- Founded in 1999, Tipp24 brought in 204.7 euro in 2005. The group offers virtually all state lottery products. Customers can participate in the state lottery, GlücksSpirale, the Oddset sports betting product, class lotteries (NKL/SKL) and the ARD TV Lottery around the clock throughout Germany. Tipp24 offers the keno number lottery and scratch cards only to customers living in federal states where the state lottery companies make these products available online. Tipp24 additionally offers its customers the option of participating in lottery teams.

New EU Member: Bulgaria -- After more than 12 hours of debate in the Bulgarian National Assembly, including four official breaks, the Members of Parliament adopted on second hearing the draft 2007 State Budget of the Republic of Bulgaria Law. "With the adopted 2007 budget, we have ensured the resources needed for the EU membership while having all preconditions to continue the policy of macroeconomic and fiscal stability," said Minister of Finance Plamen Oresharski after the adoption of the 2007 budget. According to Bulgarian news networks, organizers of toto and lotto and of betting on the outcome of a sports competition and uncertain events will pay a 10 percent tax on income, Bulgaria's Parliament resolved, passing conclusively the new Corporate Income Tax Act. The collected income tax from gambling in 2005 was around US$17 million. A 10 percent rate for all gambling activities will result in extra budget revenue of $3.7 million of which $1.3 million would come from the Bulgarian Sports Totalizator. Eurofootball Ltd. (sports betting) and the Bulgarian Sports Totalizator (toto) are the main players. Both organizations are member of the European Lotteries.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.