Moldova’s Public Property Agency (APP) is no longer holding the monopoly over gambling after the country’s latest change of course regarding the provision of services of this nature, news outlet the Balkan Insight reports.
It is understood that two EU companies have been allowed to enter the local gambling market as part of a public-private partnership, greenlighted by lawmakers. The announcement emerged nearly two years after a massive crackdown that resulted in the adoption of a new law, under which gambling and lottery activities could only be conducted legally by a state-run monopoly.
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The responsibilities for the provision of gambling services will now be split between that state-run entity and two foreign companies. Novo Gaming M Technologies GmbH, a subsidiary of Austrian gambling giant Novomatic, has won the first of the two contracts.
Led by Austrian billionaire Johann Graf, the company boasts geographical presence across 45 countries and supplies gaming equipment to over 70 countries.
NGM SPC Limited, representing a partnership between National Lottery AD, Market AD, and NGM SPC Ltd., has won the second gambling contract. It will allow the winning bidder to provide lottery and sports betting services in Moldova.
National Lottery AD is currently the largest gambling operator in Bulgaria. It is the leader in the sale of scratchcards in the Southeastern European country. The scratchcards sector is among the largest ones in the local gambling market with annual revenue of BGN320 million in 2016.
It is also interesting to note that National Lottery is owned by Bulgarian businessman Vasil Bozhkov, known to be one of the country’s richest people. Over the years, Mr. Bozhkov has been subjected to extensive media coverage over reported mafia links.
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Revenue Sharing Agreement
Under the terms of the two contracts, the National Lottery of Moldova will receive a significant portion of the gambling revenues produced in the country. The two foreign companies are thus required to contribute 75% of their lottery revenues to the state-run entity.
The National Lottery of Moldova will also receive 90% of the sports betting revenues generated from local betting customers, and 51% of slot machine revenues. The APP has previously said that the revenue portion the National Lottery of Moldova is set to receive is higher than in other European countries where a similar public-private partnership is in place, with neighboring Romania being among these.
It was in June 2016 when the leader of Moldova’s ruling party, Vlad Plahotniuc, launched a crackdown on illegal casinos in the country as gambling addiction rates were growing among nationals.
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In November of that year, police officers raided and closed all the casinos in the country in an operation that Mr. Plahotniuc declared a success. In December 2016, a draft law was introduced by the ruling party, under which the provision of gambling services in Moldova was to be granted to a state-run entity.
The law came into effect later that month.