An attractive girl appears on a TV screen in a live nighttime program and invites viewers to join in what looks like a lucrative game of chance. "All you need to do is count the number of triangles in the picture behind me and call in the right answer," the girl says while waving a stack of banknotes in her hands. "This is what you can get if you dial the number shown below and tell me the correct answer."

Phone gambling and other "Fast Win" games of chance air on Prima TV nightly after midnight and the offerings are on the rise. In fact, betting over the telephone or the Internet is rapidly gaining in popularity among Czech punters.

"The Czechs like betting, and the online form [of betting] allows them to place bets virtually any time from anywhere," observes Martin Hájek, who runs online server esazeni.cz.

However, the government has outlawed betting via the Internet because it is a nontransparent business where money flows are hard to track. Phone betting is quickly taking its place.

A recent report by Hospodárské noviny says the volume of phone bets is tens of millions of crowns a year and the market is growing quickly.

The first phone gambling company to land on the Czech market was Erika, but as profits rolled in two more companies decided to try for a share. Earlier this year the Finance Ministry certified Media Games and Ceskomoravská loterijní.

The industry is attractive because providers don't need to build up a network of terminals as regular odds-betting and lottery providers do, according to Erika's CEO Milan Jelínek. "To enter the [phone betting] market, the provider only needs to invest in its IT systems," Jelínek says.

To get a license, a phone gambling provider must guarantee that 22 percent of the placed bets is paid out in prizes, says Finance Ministry spokesman Marek Zeman.

Last year Erika's revenues were 245 million Kc ($9.8 million), and half of that sum was attributed to phone betting revenues," Jelínek says. He predicts the market could rise as much as 10 percent this year.

Illegal Internet

Over the past few years, the gambling industry has been growing. Last year Czechs spent a record 84.6 billion Kč on legal betting — 8.5 percent more than the year before, the Finance Ministry reported. The 2004 betting market included around 400 lottery and betting firms.

Interest in slot machines and casinos is also increasing, but the amounts spent on lotteries and odds betting are declining. Lotteries saw their sales drop 13.6 percent to 6 billion Kč and odds betting dipped by 5 percent to 10.6 billion Kč last year.

Gamblers spent 47.8 billion Kč on slot machine play in 2004, up 8.2 percent year on year, and 11 billion Kč in casinos, for growth of more than 9 percent over 2003.

The Czech Republic ranks fourth in Europe in terms of betting sales as a percentage of gross domestic product (3.1 percent), behind Spain, Great Britain and Italy. Its share of revenue via Internet betting is up despite the government's effort to outlaw the practice.

Last year four British online sports betting companies, Betsson, Worldbet, Eurobet and Sportingbet, launched Czech Web sites to capture Czech punters' money.

Finance Ministry spokesman Zeman admits the government's effort to push the international betting firms out of the Czech Republic to date are unsuccessful. "We do all we can in order to force them out of here," Zeman said. "The problem is that the Internet has no borders, and so it's very difficult to get the upper hand in this situation."

Czech-Slovak financial group Penta certainly isn't put off by the government's lack of recognition. Penta says it may enter the e-betting market despite it. Penta became the largest odds-betting network in Central Europe in June, after completing a takeover of six betting companies including Fortuna, a Czech network.

"The government should realize that it is losing increasing amounts of money [with its policy]," observes Fortuna's board chairman, Martin Štefunko.