Slovakia Government Carries Out Biggest Gambling Crackdown On Illegal Operators

Slovakian authorities and comptrollers launched a huge illegal gambling crackdown from June 28 to 29, resulting in the seizure and closure of gaming machines across 100 gambling facilities in the country.

The Diamant Operation

The Diamant operation was launched by the Financial Administration, where 180 comptrollers and custom officers simultaneously checked and raided hundreds of facilities offering gaming services. The raid was conducted after a tip was given to the Financial Administration that some of the so-called “quiz machines” that are in operation are being used as a form of gambling.

According to Ľudovít Makó, chief of the Financial Administration’s criminal department, they found that these quiz machines required players to answer simple questions, which changed the game being played from one based on skill to one based on luck. These machines were also being used by players who were below 18 years.

Officers also found that the servers of the quiz machines were based outside Slovakia, which is a violating of gaming regulations. Currently, over 800 quiz machines are registered in the Bratislava, Trnava, and Žilina Regions and the law requires that all gaming servers should be based inside Slovakia.

Many of these quiz machines were found cut off from internet connections and power supplies, which could be a step taken by illegal operators to hide the true nature of their gaming machines. The authorities seized these machines since they were not able to inspect them.

Tax officers also collected the accounting books for the year 2017 and 2018 till date. These books were taken from four companies who were believed to be operating these quiz machines. The officers will also begin checking whether these companies are evading VAT and corporate income taxes. If found guilty, these operators will be facing criminal charges.

Heavy Fines Will Be Issued To Guilty Operators

Slovakian authorities ended up sealing dozens of these gaming facilities and confiscating many gaming machines which were sent to the Technical Testing Institute for examination. In total, 5 quiz machines and 75 gaming machines were seized by the comptrollers. If the tests show that these machines were used for illegal gambling operations, the machines will be confiscated for good and these operators will be hit with hefty fines.

Fines being issued by the Slovakian government have spiked up significantly in the last few years. The government issued as many as 210 fines totalling to €378,660 in 2017. The number of fines issued last year were at least 153 more than what was issued in 2016. In 2015, only 10 fines were handed out.

Dominika Lukáčová, spokesperson for the Association of Entertainment and Gambling, said that while these indicate the alarming number of violators in the country, it is a welcome fact that the government is finally cracking down hard on illegal gambling operators.

New Gaming Laws Impact Land And Online Gaming

The raids and the fines come after Slovakia rolled out new gambling laws January 2017. The changes to the Gaming Act required gaming and slot machines in restaurants and hospitality establishments to be removed for good. The government compensated this reduction by increasing the number of gaming machines in gaming halls from five to 12.

However there are still a few operators in the country who defy these gaming law amendments and continue to offering gaming machines under the pretext of quiz machines. The Slovakian government’s crackdown on land-based gaming has severely affected the industry, reducing the number of operations since the new amendments were put in place. With lesser physical venues to gamble, Slovakians are now turning to online websites to play.

The Slovakian government expected this to take place and made provision for safeguards and regulations to be put in place to protect online players. Slovakia has blocked the IPs of all online operators offering online gambling services to its citizens without a license from the government. Advertising and organizing of non-licensed foreign gambling games in the country is also heavily restricted and subject to fines.

Legislators introduced a new online gambling bill in May encouraging all interested operators to apply for a Slovak online gambling license as long as they meet three criteria: one, that the operator should have an office in Slovakia or in another EU member state; two, that they pay an online licensing fee; and three, that they pay their online taxes. This new Gambling Bill is expected to come into force in March 2019.