A Strong Short Term Annual Performance in the Czech Market is the First Step of Long-term GrowthPublished July 19, 2020 by Lee R
A shifting market and taxation system has the Czech Republic streamlining its emerging model.
The Czech market has turned in sweet figures for fiscal 2019, to the tune of 16.0% growth.
Drivers of Growth
The drivers of this growth were gained from upticks in online and land-based slots; and lottery and betting revenue, pushing total revenue reported by the Czech Finance Ministry to a peak of CZK36.27bn (£1.22bn/€1.36bn/$1.53bn).
Amounts wagered rose a whopping 56.1% to CZK389.19bn for the year, for a win of CZK352.93bn.
Online Sports Betting
A 15.8% boost to sports betting (to take CZK8.23bn) was accelerated by online punting as well: customers staked CZK78.41bn, which generated CZK7.73bn in revenue for operators, representing 87.5% of the full-year total.
The Slot Factor
The star performer in 2019 for the Czech market was slots, which recovered strongly from a rocky 2018 that saw bonus restrictions and customer verification requirements drive down revenue into decline.
The 2019 Rebound
The strong rebound in 2019 was bolstered by land-based performance: customers staked CZK196.45bn, to contribute revenues of CZK15.11bn (17.1% jump).
Online slots brought in a healthy gain of 47.4%, to reach CZK2.83bn.
Local specialty slot machines continue to dominate, both land-based and online, as the land-based market phases out.
The Greater Goal
Slot machines are a key towards a longer term rebound, with 2019 figures remaining 8.8% off 2017’s result, when stiff new taxes drove a segment of operators out of the Czech market completely.
Upon Closer Review
The Czech market authority appears to be playing the long game its specialty offering slots: in 2019 slots accounted for CZK196.5b of turnover to nearly double 2018’s total—driven by a taxation system based on sums wagered per spin rather than customer deposits.
Tax Impact on Slots
This pushed slots revenue growth up some 21% to almost CZK18b, with CZK2.8b contributed from the online verticals.
Land-based slots remained persistent, with a 17% even while despite the number of land-based slots available fell 16.2% last year to 36,464, a figure rerpesenting half of the 74k machines available in 2012—and while the country’s total number of slots halls fell a third last year.
It all seems to add up to a concerted push in the Czech market to move its specialty offering slots online, and reduce operating costs from land-based operations to increase net revenue benefits.