Law on Games of Chance
More resultsIntroduction
Since March 2019, the new Law on Games of Chance defines games of chance as an activity of public interest and the exclusive right of the entity of Republika Srpska (article 7).
- Country
- Bosnia and Herzegovina
- Sector
- Culture and tourism
- Type of Law
- Capturing a market, an industry or public resources
Description of the law
Since March 2019, the new Law on Games of Chance defines games of chance as an activity of public interest and the exclusive right of the entity of Republika Srpska (article 7).
This right is exercised through the state-owned enterprise Lutrija Republike Srpske a.d. Banja Luka (Lutrija RS). All lottery games and electronic games of chance can be organised by Lutrija RS solely or in cooperation with other legal entities, which it can independently select. The Ministry of Finance, which oversees implementation of the law, may grant licences for organising some games of chance to other legal entities besides Lutrija RS.
The law also introduced new forms of video lottery and electronic games of chance under the complete control of the state.
After adoption of the new law, Lutrija RS announced a public procurement procedure for the organisation of electronic lottery games. To take part in the procurement, companies needed to have three billion euro per year in turnover, which is more than half the GPD of Republika Srpska. The high threshold restricted local companies’ ability to bid.
The bid was won by Casinos Austria VLT AG, a company registered in Switzerland nine days before the procurement call was published.
Casinos Austria VLT AG and Lutrija RS created a joint venture called Electronic Video Lottery d.o.o. Banja Luka, with a ratio of 49 to 51 per cent control of the company.
In January 2021, Casinos Austria VLT AG became Casinos Austria International AG with the same top management. Casinos Austria International manages the group’s international operations, including that of National Videolottery of North Macedonia.
Video lottery companies in Republika Srpska and North Macedonia have the same ownership structure of 51 to 49 per cent between national lotteries and Casinos Austria subsidiaries, thus indicating attempts by the same actors to control a highly profitable sector in the region.
A significant provision of the law is that the Ministry of Finance now holds complete control over the payments from and to individuals who gamble (see here).
Full Law Name
Type of law
Act of Parliament
Scope of application
Substantive: games of chance
Personal: providers of lottery games and other games of chance operating in Republika Srpska
Territorial: Republika Srpska
Temporal: until abrogated
Time of adoption and entering to force
Adopted on 12 March 2019
Entered into force on 21 March 2019
Who drafted it
Ministry of Finance, Government of Republika Srpska
Who submitted it to Parliament or other collective body, such local council
Government of Republika Srpska
Relevant developments in the process of adoption that show signs it is tailor-made
After adoption of the new law, the government of Republika Srpska allowed the state-owned enterprise Lutrija RS to publish an international tender to establish a joint venture for the organisation of electronic lottery games (see here). The selection criteria for the bidders required at least ten years of international experience in organising lottery games and electronic games of chance, and three billion euro per year in turnover in the last three years. These conditions prohibited local companies from winning the tender.
Casinos Austria VLT AG, which registered in Switzerland exactly nine days before publication of the public call for tenders, won the bid (see here and here).
Based on the provisions of the new law, Lutrija RS and Casinos Austria VLT AG are now the exclusive providers of electronic lottery games, including a popular bingo game.
Similarly as in Republika Srpska (see here), the media has reported that Casinos Austria International had previously lobbied for a change in the law on lottery games and other games of chance in North Macedonia, whose government eventually changed the law in order to enable the company to establish a public–private partnership with the Macedonian lottery to organise lottery services (see here).
Who adopted it
National Assembly of Republika Srpska
Enforcement
Government of Republika Srpska, Ministry of Finance, Lutrija Republike Srpske
Initiatives to challenge it and their outcomes
According to media reports, the Association of Legal Gambling Providers submitted a complaint against the law’s damaging provisions to the Constitutional Court of Republika Srpska. Currently, however, there is no additional information on the complaint.
Affected sector
Culture and tourism
Direct beneficiaries and related networks
The direct beneficiaries of the law are Casinos Austria VLT AG and Lutrija Republike Srpske. These two companies now hold the exclusive right to provide lottery and games of chance services in Republika Srpska, which are a highly profitable sector (see here).
Direct victims
Primarily, the direct victims are privately owned companies who are providers of lotteries and games of chance and are now denied the right to organise these services in Republika Srpska.
Also, citizens of Republika Srpska could be direct victims of the new law if the government of Republika Srpska loses in court and has to pay damages to the private lottery companies. This could result in payment of damages of up to €120 million, according to Bosnian media reports, and the money would be taken out of the public budget (see here and here).
Socio-economic impact
After adoption of the new law, the government decided to rescind the licences of private companies that provided lotteries and other games of chance. The Association of Legal Gambling Providers sent a letter to Parliament arguing that the government’s decision would directly affect the jobs of 2,900 people (see here).
Some media reports claim that the law could indirectly affect thousands of employees in related companies (see here), such as equipment providers and software developers.
Impact on rule of law
The law affected the economic rights of legal entities, the free market and the protection against monopoly.
Is there any corruption case that is linked to the tailor made law?
No
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