New legislation could see fall in number of gaming machines in Czech Republic

Gaming machine bars – known as hernas – are an extremely common sight in the Czech Republic. But now, under legislation approved by the Senate on Thursday, many could disappear from the country’s towns and cities. However, critics say the change will hit theatres and other organisations that currently receive funding that local authorities have raised from gambling.

Czechs put over CZK 60 billion (around USD 3 billion) into slot machines in 2008, the most recent year for which there are figures, and herna, or gaming, bars and machines are to be found throughout the Czech Republic.

However, an amendment to the law on lotteries passed by the Senate on Thursday gives local authorities a far greater say when it comes to regulating gambling on their territory. If signed by the president, the legislation will take effect from the start of July.

Town and city councils can already remove classic fruit machines. But now they will also have the power to bar video lottery terminals in which gamblers bet on the outcome of a video game. Losses on these VLTs tend to be higher than on traditional slots.

The new amendment also includes other provisions. Local authorities have to publish information on how they use taxes raised from lotteries to help fund charities and cultural and other organisations. Lottery firms can no longer make donations to non-profits that they themselves run.

Many local politicians welcomed the vote. The mayor of Prague 6 said for instance that it would immediately implement steps to completely remove betting machines from that part of the city.

But not everybody was celebrating on Thursday. Critics say lower tax revenues will hit organisations, like theatres, that rely on money raised from gambling. Some could well go out of existence, they warn.

The Senate vote represents a significant defeat for the Czech Republic’s betting firms, who had been lobbying hard to preserve the status quo. The “big five” have said they could sue the state for CZK 38 billion in damages, while the largest, Sazka, has even been making noises about possibly leaving the country.