Tipsport bets on its new lottery

Sazka, the embattled gaming company that once had a monopoly on lottery, is no longer alone on the market after the launch of Tipsport's lottery and impending unveilings of similar games by Fortuna and Synot, but it will likely remain the dominant player, analysts say.

Tipsport launched its Tipšestka lottery July 11, and boasted ticket sales in the hundreds of thousands of crowns in the first day. Fortuna, the second-largest gaming company in the country, will launch its own lottery July 18, and Synot has said it will launch a lottery in September.

Despite Tipsport's early success with Tipšestka, the company will likely end up a drop in the gaming bucket, analysts say, as access to customers is limited. Tipsport primarily offers bets on sporting events and will only sell lottery products in their branches, reaching far fewer customers than Sazka and Fortuna terminals in convenience stores.

"The segment of horse betting and that of lottery are very different. I can't imagine people doing lottery in a horse-betting branch," said Milan Lávička, an analyst at Atlantik.

Tipsport has said it aims to gain 10 percent of the market share, a goal numerous industry analysts have dismissed.

"It's not possible for them. The distribution is missing," Lávička said.

Despite Sazka's bankruptcy in late-May, the company is rebuilding, and overall sales for lottery and non-lottery products rose 20 percent in the first part of the year.

"Sazka's revenue for Sportka, their biggest lottery game, is rising fast. It's much lower than it was before the crisis, but it's stabilizing, and Sazka will stay the dominant player on the market for sure," Lávička said.

Fortuna is expected to come in second to Sazka, with 20 percent to 30 percent of the market share in the next three years, he added.

"The first step of Fortuna is to try to compete with almost the same game as Sportka," he said. "Then their strategy is to develop new and different games. There is a lot of room for increasing all markets, not just competing for customers."

Sazka also recently won a victory against Tipsport when the Prague Municipal Court agreed July 8 on an interim ban against Tipsport's use of the name Tipsportca for its lottery, which Sazka said was too similar to their lottery Sportka.

Currently, Sazka is headed by insolvency administrator Josef Cupka, while the controversial Aleš Hušák remains CEO and chairman.

Sports organizations are watching the developments closely, as their funding is reliant on gaming companies. The government is considering a measure to gain funding for sports organizations by taxing gaming companies directly, as opposed to requiring donations.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com