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Shhh: Mr. Topolánek has a little problem ...


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April 25th, 2007 issue

Pieter Remmers, an authority on the rapidly rising fever in Europe known as the gaming industry, says the business is “not very regulated in the Czech Republic.”

Study after study confirms that electronic gambling machines are the most effective tool for turning the weaknesses of otherwise productive citizens into a pathological problem. Regulators throughout Europe, North America and Asia have instituted some controls and limits on this new wave of phenomenally profitable technology. But what is the Czech Finance Ministry doing about the hundreds of video gambling machines being installed throughout the country?
Requiring their owners to have deep pockets and pay someone a salary to shoo away underage players, who are unlikely to have any real money to spend. If you’ve got 100 million Kč ($4.9 million) and presumably no major felony convictions, you can go into business with video lottery terminals, the most high-tech gambling machines ever to hit the Czech Republic.
Addiction experts at the Bohnice Psychiatric Hospital, citing a 45 percent rise in gambling addiction over the five years ending in 2004, before the latest machines were in use, have urged the state to do more to regulate this threat, pointing out that things are bound to get worse than ever otherwise. With 90.6 billion Kč spent on betting last year alone, it seems the good doctors are right to be worried.
But the state, it seems, has a little addiction problem of its own — and it’s not alone. The revenues that will likely be generated by this new cash cow will go far to replenish the deficit budget that the administration of Prime Minister Mirek Topolánek has been trotting out a great deal lately (usually in the context of blaming his big-spending Social Democratic predecessors).
And the more of that green the state rakes in, the less it has to make politically unpopular moves like cutting social services or raising taxes.
If the thought of 2,800 cutting-edge gambling machines flashing diodes and generating cash streams is making Czech leaders heady, they are hardly alone.
The state Senate in California just last week cleared the way for a massive expansion of gambling in that state, approving deals that will let them skim mightily from the new additions to five American Indian tribes’ casinos. The predicted take? Possibly as much as $539 million, but more likely a mere $200 million, according to The Mercury News, which will go a long way to ease the budget deficit there. Governor Arnold Schwarzenegger is pushing hard for the state assembly to approve the deal fast, complaining that “Every additional day of delay costs the state millions of dollars.”
If that doesn’t sound like the feverish urgency of an addict, it’s hard to imagine what does.
In Europe, authorities are clearly just as drunk on the money gambling brings in. Other nations have gone further than the Czech Republic in regulating gambling, but not by much. Technical fine-tuning to slow down the rate of play on the new video betting machines or a 15-second pause in the action after a big payout, which some have implemented, isn’t going to make a bit of difference to a hardcore gambling addict.
Czech leaders need reminding of a law of economics, it seems: There’s no free lunch. All the millions that high-tech gambling brings in has a social cost — and treating hundreds more addicts, whose families have lost their breadwinner and whose employers have lost a worker, will balance the books in the end. It’s a losing bet, Mr. Topolánek.


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