(Podgorica, 4 November 2011) – Today MANS directed a set of comments to the Ministry of Finance concerning the draft amendments to the Law on Games of Chance. We called on the Ministry to abolish monopolistic provisions in the law – which would favor companies associated with controversial businessman Branislav Mićunović and to levy higher taxes on earnings in this sector.
The monopolistic provisions of the current draft Law favor the Lottery of Montenegro AD, which is the sole holder of a concession for the organization of lotteries in the country. Andrea Mićunović, Branislav Mićunović’s daughter, sits on the Lottery of Montenegro’s board of directors. The law stipulates that the concession for lotteries may only be awarded to a single firm (which needs to be registered as a joint stock company). The law also lists an additional criteria for granting this concession, stipulating the number of concessions previously held as an important requirement. As it stands, only the Lottery of Montenegro holds such a concession (for a period of ten years). Furthermore, Montenegrin law does not prescribe an obligatory fee for awarding this concession. Such a fee is to negotiated in a separate agreement (not available to the public).
Instead of eliminating these monopolistic provisions, the Ministry of Finance has prioritized the interests of the Lottery of Montenegro by essentially granting them a monopoly in this highly profitable sector.
It is also interesting to note that in August, during public hearings on amendments to the law, the Ministry presented a number of good provisions in the draft law at that time. Nevertheless, the October version indicates that the Ministry yielded to the gambling lobby (rendering meaningless attempts to regulate this sector and secure a greater inflow of funds into the state budget).
First, under the influence of the lobby, the October version of the law’s amendments no longer contain a provision obliging casino’s to track payments in excess of 15,000 euros (meant to prevent money laundering). It is interesting that out of the seven casinos in Montenegro, three of them are owned by Jackpot, which was founded by Branislav Mićunović and Sava Grbović (the majority owner of the Lottery of Montenegro). The fourth casino was owned by the late Dragan Dudić “Fritz,” while the fifth is located in the Hotel Avala, which is owned by yet another controversial businessman Zoran Ćoća Bećirović.
Thus, while the burden of the economic crisis is permanently being shouldered by ordinary citizens, the new law fails to raise taxes on controversial businessmen behind the numerous casinos, bookmakers and slot clubs in Montenegro. These types of premises continue to pay lower compensation than their counterparts in the region.
For example, in Montenegro each casino pays an annual fixed fee of 50,000 euros and a monthly fee that is calculated at a rate of 10% of revenues. In the region, however, the fixed annual fee paid per casino can be as high as 500,000 euros, while monthly fees are calculated at a rate of 15%. Furthermore, the monthly fixed fee per slot machine is 50 euros, and for each betting hall 500 euros (while the variable part is calculated at a rate of 10%). In neighboring countries betting halls and slot clubs pay a number of fees, all at higher rates.
It is interesting to note that the Ministry, in its initial version of amendments to the law presented in August, foresaw special fees for casino tournaments (similar to the ones levied in neighboring states). Nevertheless, following pressure from the gambling lobby, casino tournaments are no longer even mentioned in the law.
At the same time, it is symptomatic that the Ministry failed to further regulate online and mobile gambling, in spite of their growing popularity. Once again, our regional neighbors have gone further in regulating this realm. It is also telling that in the October version of the law the Ministry withdrew a provision requiring that those organizing online gambling pay the state a one-time fee of half-a-million euros.
In the end, we must also highlight the fact that following pressure from the gambling lobby, provisions relating to state oversight of the printing of betting cards, lottery tickets, etc. were totally erased from the proposed legislation. That is, according to the latest draft amendment, the owners will effectively supervise themselves and report to the state (which won’t have a clear insight into whether or not the firms are deceiving citizens by failing to place winning cards into circulation).
MANS calls on the Ministry of Finance not to remain submissive before the gambling lobby, at the expense of the public interest, but to ensure instead that stronger mechanisms for preventing money laundering and for securing higher returns to the state budget are incorporated into the law. Given the costs of the global financial crisis, it is reasonable to ask that part of the related costs should be born by so-called “controversial businessmen” who are accumulating extra-profits through their gambling ventures.
