In the past few years, the profits of Czech bookmakers have started to drop. With more and more foreign online betting companies entering the market, Czech betting firms face some tough competition. Czech law prevents local companies from taking advantage of Internet betting. At the same time, the government seems unable to force illegal foreign entities out of the market. Petr Knybel, director of the biggest Czech betting chain, Tipsport, talks to The Prague Post about how damaging the situation is and how local betting companies could outfox the government unless it creates fair conditions on the market.

Let me start with some hot news. The Finance Ministry has announced that it would not lift the ban on online betting in a new lottery law that should be submitted to Parliament next year. How do you feel about that?

Honestly, I have not received that information. Earlier this year, the Finance Ministry planned a completely different thing — to legalize online betting. However, the government considered changes that would prevent Czech betting companies from being competitive on the market.

Given that the government seems unable to fight off foreign online betting firms from operating on the Czech market, would you consider appealing to the Anti-Monopoly Office or the courts because you're being virtually discriminated against by the state?

Former Finance Ministry officials used to claim that they were, and would be, fighting companies offering illegal online betting. Their failure to pay taxes costs the state hundreds of millions crowns every year. Unfortunately, no apparent measures have been put into force. Abroad, effective measures have already been discovered — taking away particular licenses, locking Web sites, banning banks from transferring money to those betting companies, or even arresting leading representatives of those companies. Should the situation in this country remain the same, and the government fails to act, we'll be forced to take our defense into our own hands.

Foreign online betting companies base their activities on licenses issued in countries where online betting is legal. Is it possible that Tipsport or some other Czech betting firm could launch an affiliation in some offshore country and start Internet betting to Czech punters?

This is certainly an option that we consider. Still, we believe that we'll be able to continue offering our services transparently and based on Czech laws. We want to do our business fairly, even from the moral point of view. I do not think it would be good to point at the loopholes of enforcing the law here by launching a Tipsport office spelled with a 'y' and pretend that it's a completely independent entity that operates here legally. We do believe that the government will be able to ensure fair conditions for everyone, and that it'll be able to carry out efficient supervision of the market.

This year, Tipsport expanded to Poland and Slovakia. Were the saturated Czech market and the inability to launch Internet betting services at the root of this expansion?

Tipsport expanded abroad once it completed its growth in the Czech market. It has nothing to do with the Internet. Today, Tipsport has more than 1,000 branches throughout this country, and they are located in every town with a population over 2,500 people, with a few exceptions. We had to look for other room to expand.

With the growth of online betting, is it reasonable to pursue foreign expansion through new branches? Wouldn't it be more effective to launch online services on foreign markets?

Some 30 years ago, when video spread to households, there was speculation that cinemas would become extinct. And just look at the current boom of multiplexes all over the world! I believe that odds-betting represents a certain form of entertainment, and there will still be people who do not want to seek entertainment from a computer.

When talking about expansion, what other development plans are you considering?

At the moment, we are not considering any other foreign expansion, but we do not rule it out. Now, we need to focus on integrating our new foreign acquisitions into our operational systems.

The country's first regional lottery recently launched in Přerov, north Moravia. Do you think such a lottery will succeed?

As far as I've been informed, that company is only considering launching such a lottery, and it does not yet hold the license or the money. Promising lotteries have been launched in the past that, in the end, brought about losses worth hundreds of millions of crowns. Lotteries based on the combinations of numbers are, however, different from odds betting, so we do not perceive this as competition. That's why I haven't considered the issue very much.

Tipsport launched individual bets that enable punters to name the subject of the bet. Aren't you afraid that regular probability schemes will not apply to such limited bets and become too risky?

Well, it's obvious that we won't accept any bet. We will not accept bets whose results could be affected by punters — such as someone betting they will lose 20 kilograms — or some unethical bets, like about whether or not someone will die. In fact, this would be against the law anyway. But we will not even accept bets that could be unclear or dangerous for us. In other cases, our bookmakers will be able to calculate the probability, and I hope that individual bets will become popular with punters. This should help us demonstrate that Tipsport has its own bookmakers, and that we are capable of opening various bets, rather than just copy opponents' schedules as some do.

If you were to make your own individual bet, what would it be about?

In terms of the number of branches and revenues, Tipsport is the market leader. I'd bet that Tipsport will keep that lead through 2007. Do you want to set the odds for me?

What is the highest bet you've ever placed, and what was the result?

The highest bet that I've ever placed was 50,000 Kč [$2,237] with the odds standing at 2:1, and I won that one. Such a high bet was exceptional for me. When I get betting, I usually bet 1,000–10,000 Kč at odds ranging from 2:1 to 5:1.