Eye on Europe - March 24, 2006

24 March 2006

Fin Win -- Finish monopolist Veikkaus, one of the first Internet operators in Europe, had a turnover of 1,315.8 million euro in 2005. Web sales went up to 160 million euro, which is over twelve percent of Veikkaus' entire turnover. The Finnish operator returned 456.5 million euro (+1.8%) to the Finnish State, paying 60.6 million euro of lottery tax and 14.5 million euro of VAT to the State, in addition to returning the funds from its profits. Every week some 120,000 Finns play Veikkaus games via the Internet. The most popular Internet product is sports betting. Veikaus also offers Lotto, Keno and scratch card products on its website.

History -- Veikkaus, a Member of the European Lotteries, stated recently that it became the first national lottery to sell gambling products over the Internet when it opened its online services to the public in 1997. But for history's sake, Liechtenstein's Plus Lotto actually sold the first Internet tickets on Oct. 3, 1995 (at 12:04 to be precise). According to Cynthia R. Janower in "Gambling on the Internet": "The world's first virtual online casinos, Inc. (ICI), opened its doors on August 18, 1995 with 18 different casino games and online access to the National Indian Lottery..." (www.casino.org) 1995 - 2001 History at a glance.

Cashing In -- After the acquisition of the American firm GTech Holdings Corp., Lottomatica's CEO Rosario Bifulco is cashing in. He exercised a stock option of 1.75 million shares for a total of 57.5 euro million. Could this be a Code of Practice of the European Lotteries?

VAT: Very Apart Treatment -- Czech Republic lottery company Sazka, EU member since 2004 and member of the European Lotteries, could get a very apart treatment concerning the VAT. When purchasing goods they do not have to pay the VAT, however when they sell (tickets, for instance) they will get a return of the VAT. I'll bet that the Bill will not pass ,or otherwise the EU will not accept this...

Romania -- The last development around the Romanian Lottery, active member of the European Lotteries, is that Compania Nationala 'Loteria Romana' S.A. will be privatized even without the approval of the Senate. And it seems that after all this turmoil the original privatization plan will be realized. That means that 20 percent of the state shares of Romanian Lottery will be traded; 5 per cent of the shares will be traded on the Bucharest Stock Exchange and 15 percent to the Fund Proprietatea, which will compensate house owners whose property had been confiscated under the former regime.

Another Privatization -- For months and months the State-owned Hungarian Lottery Szerencsejatek is mentioned as an privatization object. Most of the time the source is the Budapest Stock Exchange Ltd., who likes to attract new domestic and foreign investors. Now, however, the Hungarian Democratic Forum (MDF), a small conservative opposition party, wants all state companies to trade 10 percent of their shares. And that includes the very well operated Hungarian National Lottery. International analyst are convinced that it will only be a matter of time, before all the former East-European countries will privatize their national lotteries. Lack of Governmental money in those countries is the main reason. Transparency is the second.

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.