The Draft Act Opening the Slovenian Gambling Market is Pending in Parliament

Slovenia

The Slovenian and international gambling industry is closely monitoring developments around the Slovenian Gambling Act (the “Gambling Act”), which is expected to undergo changes that will open up the Slovenian gambling market to international operators and will ensure compliance with EU legislation. After the last attempt to amend the Gambling Act in 2018, which was ultimately unsuccessful, the Slovenian Government has proposed a new Draft Act, which is currently pending in Parliament.

Key changes to the Gambling Act or New Rules of the Game

At the outset it is important to explain the terminology used by the legislator. The Gambling Act differentiates between classic games of chance, including lotteries, raffles, betting, lucky draws and similar games, and special games of chance, namely, poker, roulette, blackjack, craps, slot machines, and similar games played in person in a casino or on gambling machines in gambling saloons falling within this scope.

The proposed Draft Act, if passed, will establish a legal framework that will enable concessions to be granted on the basis of a public tender. The award of concessions and their extension is currently decided by the Government and the Minister of Finance at their own discretion.

The number of organisers of classic games of chance (including betting) is envisioned to increase. Currently only two organisers in Slovenia can organise classic games of chance, the Lottery of Slovenia and the Sports Lottery, which between them have 20 concessions for individual games of chance. According to the Draft Act, there could be a total of five organisers. However, it is not clear whether there will be a two-stage concession procedure, with the first step being the grant of an umbrella concession to the 5 organisers, which could then apply for concessions for individual games of chance in the second step, or if there will be a different set up. Moreover, special conditions will be established for betting, as a form of classic games of chance, but it is worth noting that the Draft Act is very vague on this matter.

The presence of new organisers would potentially create a competitive market, putting pressure on the existing two market leaders, which would have to adapt their respective current business models to the new market conditions. Nevertheless, they would at least have a considerable advantage in the beginning as they already have an established network, and they hold several concessions (which they will keep until they expire). However, this transitional period might not last long as Slovenians are already using services from foreign providers, even though they are not yet formally present on the market.

Furthermore, the changes abolish the requirement that companies wishing to obtain a concession for classic games of chance and special games of chance in casinos have to be organised as joint stock companies. It will no longer be required that the applicant for a concession for special games of chance has to be based in Slovenia either. Land-based presence will still be required for classic games of chance.

Moreover, for concessionaires that run special games of chance in casinos, the restrictions related to ownership will be loosened. Currently only the state, local communities, legal entities 100% owned by the state and private companies can be owners, but the last of these (however many private companies are involved) can account for a maximum of 49 percent of ordinary shares, and they must meet a number of other conditions. Under the Draft Act, the state share may not be less than 25 percent plus one share in the case of a joint stock company and not less than 51 percent in the business share of another company form. Although, it is not clear why this distinction is made.

Comprehensiveness and clarity will open the door to foreign investment

The proposed changes to the Gambling Act are very welcome as they will potentially open the door to the Slovenian gambling market to international operators and will ensure compliance with EU legislation, yet it is worth pointing out that the Draft Act is still in the early stages and is very unclear on certain topics. We will have to wait until the end of the parliamentary legislation procedure to see whether the final draft will be clear and comprehensive.