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Commission called on to halt Polish government’s efforts to ban privately operated gaming machines

Date

25 May 2010

Sections

Trade & Society
Health & Consumers
Euro & Finance
Competition
Central Europe

A law swiftly enacted in January sees the demise of the use of privately operated gaming machines in Poland. The Polish Government’s new law has resulted in fury and indignation among businesses involved who will bring their plight to Brussels this month in a series of meetings with EU officials. The European Commission has already been called on to examine whether an infringement case could be brought against the Polish Government on the basis that it failed to notify the new law.

In essence, the new proposals were propelled into law following a dramatic scandal, where leading politicians governing: “Platforma Obywatelska”, were accused of forcing through legal solutions, beneficial for their “friends” working in the gambling field. However, instead of regulating the market, the new law, which is not evidence-based, still seems to favour a narrow group of casino owners and has strengthened the position of the state-owned gambling company and organiser of national lotteries: “Totalizator Sportowy”, while completely annihilating the small and medium-sized companies who privately operate gaming machines in Poland.

It is believed that the closure of this once legally-run sector will have a disastrous effect on local and regional jobs estimated in the region of 100,000 people. This is compounded by the fact that an inevitable consequence of banning the machines is the activation of an illegal network of games, impossible to monitor or control by public authorities.

Andrzej Sadowski, from the independent think tank: the Adam Smith Centre has expressed his alarm at the government’s action when he said. “Gambling existed during the times of deep communism in Poland and we know how repressive the system was. Now we are finding ourselves in a situation, where once again the return of the grey zone and corruptive solutions will begin”.

The Polish Chamber of Commerce of Producers and Operators of Amusement Equipment , representing private gaming machine operators, asserts that the Polish Government ignored EU internal market rules on freedom to provide services, failed to notify the Commission of the intent of the legislation and moreover abandoned the normal democratic process by enacting the law within three days of presenting it to Parliament. The association is bringing this flagrant abuse of the democratic process to the attention of key policy makers and politicians in the European Commission and European Parliament in the hope that they will stop the Polish government in its tracks.

For further details, please contact:
In Poland: Radek Popiel – GSM +48 795 566 633, e-mail rzecznik@izbagospodarcza.pl
In Belgium: EUROMAT Secretariat – TEL + 32 2 626 1993, e-mail secretariat@euromat.org

Additional Information

1. Financial considerations: The ban on all gaming machines outside casinos will amount to a total loss of tax revenue for the Polish state of almost 900 million euro in 2014, not including the cost to the state as regards unemployment benefits due to those currently working in the sector. The Polish Government has failed to clarify how this loss will be addressed.

2. Employment considerations: Gaming machines are currently operated in gaming halls, restaurants, cafes and bars and the sector employs (directly and indirectly) approximately 100,000 people. The vast majority of those directly employed by the sector and a significant proportion of those indirectly employed (cafes, pubs, restaurants) will, and have already begun to, lose their jobs as a result of the new law.

3. The advent of a black economy: Every EU Member State has a strict regulatory regime in place for the provision of gaming machines. These regimes provide a robust level of consumer protection in the gaming environment and by and large prevent the advent of unregulated gaming machine provision. A total ban on privately operated gaming machines will arguably give rise to a black economy for gaming machines in Poland which will essentially mean a total lack of consumer protection in Poland in this environment.

4. Violation of EU Internal Market rules: The new Polish law will effectively prevent any European operator from entering the Polish market to provide gaming machine services in Poland. This is a clear cut violation of Article 49 of the Treaty which underpins the freedom to provide services across borders in the Internal Market.

5. Failure to respect EU due process: The Polish Government failed to comply with an obligation to immediately notify their draft law to the European Commission, as per Directive 98/34. Now notified, the Commission is currently examining whether the new law violates EU rules and has applied a standstill period effective until July 2010.

IZBA GOSPODARCZA PRODUCENTÓW I OPERATORÓW URZĄDZEŃ ROZRYWKOWYCH
UL. WILCZA 54A LOK. 7, 00-679 WARSZAWA
TEL. +48 22 622 79 99 – FAX +48 22 622 19 68
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