In order to stop a grey economy in the gaming sector, Serbia aims to follow models used by the EU and other countries in the region.
By Ivana Jovanovic for Southeast European Times in Belgrade -- 10/11/12
Gaming industry officials in Serbia are hoping to work with the government to curb a grey economy that is costing the sector 30 to 50 million euros per year. [Nada Bozic/SETimes]
Irregularities in Serbia's gaming sector have cost the country 30 to 50 million euros annually for at least the last four years, prompting industry leaders and gaming operators to call for greater oversight.
The new government that took power this year eliminated the department that ran the gaming industry and brought the sector under the control of the Republic Tax Administration.
Vlajko Senic, state secretary at the Ministry of Finance and Economy, met with gaming sector representatives on September 17th and agreed the industry is in need of reform. He expressed the will for co-operation and said he expected proposals from experts in the field about regulations and improvements.
“We'd like to believe that, finally, we have positive signals from the ministry and that some experts will start to work on regulation and control of gaming in Serbia," Mirjana Acimovic, chairman of the European Gaming and Amusement Federation's committee for responsible gambling, told SETimes.
While Serbia has a considerably larger population than its neighbours, unregulated activity has left the country with the lowest gaming revenue in the region.
According to Belgrade-based Jakta, the association of gaming organisers, authorised technicians and producers of gaming equipment, Serbia's annual revenue from slot machines is 45 million euros.
In Croatia, where the population is nearly half the size, slot machine revenue is 90 million euros per year. In Macedonia, where the population is less than a third of Serbia's, slot machine revenue is 120 million euros. Industry experts say a lack of oversight legislation, monitoring systems and technical standards are among the reasons Serbia lags behind its neighbours in gaming revenue. There also exists a significant grey economy in gaming, which causes unfair competition.
"Accumulated money in the grey area is huge," Acimovic told SETimes.
Acimovic said unchecked software, unregistered workers and unpaid taxes and fees are a significant part of the problem.
"Another [issue] is online gaming where the world's leading companies provide services to our citizens while they do not have license and do not pay fees and taxes, but they damage people who participate in these games, country's budget in millions, and they are unfair competition, too," Acimovic said.
She added that quality regulation of gaming processes and institutions could lead to a 10-fold increase of industry revenue in a span of three years. Acimovic recommended measures that other nations have taken, including independent laboratories for equipment testing and real-time insight into casino operations and betting.
Serbian gaming law is mostly in line with the EU, but provides only a framework. Specific rules and regulations are lacking.
"Numerous models and some good solutions for this area were already found, and Serbia doesn’t have to create anything new," Ana Kolesan, a lawyer at Kovacevic-Kolesan, told SETimes. "It can use just one model or combine few of them. Croatia is good example, especially when it comes to accordance between the gaming law and the criminal code."
Kolesan explained that Serbian criminal code has just one crime related to gaming, punishing those guilty of unauthorised organisation of games of chance. The penalty is less than three years in jail or, alternatively, a fine. In Croatia, punishment for the same crime is up to eight years in jail, and fines are not an option.
"Benefits of new measures are numerous," Kolesan said. "The state budget will grow, crime will be combated especially in the area of money laundering, which used to follow this sector, competitors will be loyal and, at least, the influence on youth and risk groups will be much better since regulated systems rarely have negative influence."
Gaming operators said improved industry oversight will help their business.
"If we would have regulations as EU states have, the grey economy will be smaller and we will have more chances for better profits, more employers and better conditions for them," Milija Tanaskovic, director at BeoGaming, told SETimes.