Insight SERBIA
The Law in its Article 19 points out that the State Lottery of Serbia has the exclusive right to operate the games of chance! The previous Article 14 defines the classic games of chance as 1) basic games of chance (lottery, instant lottery and other similar games that has lottery as their base: sports betting, lotto, keno and similar games, tombola, bingo and other similar games that have tombola as their base) and 2) other classic games of chance (phonto, SMS lottery, other games of chance in the sense of this article, contained in the catalog of the games of chance). By the previous Article 10, that defines prohibitions in points 20 and 21, the state prohibited the use of words lottery, lotto, bingo and names of other classic games of chance in the name of a legal person or an entrepreneur as well as in the names of the games of chance operated by an entrepreneur or a legal person, which is not the State Lottery of Serbia.
As far as special games of chance are concerned, meaning sports betting, slot machine games, games operated in game parlours such are games with pellets, cubes, cards, etc., they can be operated by any legal person or entrepreneur to whom the state has transferred the right of
оperation of these games of chance.
Also, the games of chance in goods or services can be operated by private entrepreneurs or legal persons if the state gives its consent.
Such a definition of the games of chance clearly shows that the only owner of operation of all games of chance, as an activity of general importance, is the State Lottery of Serbia. The law clearly defines who can be the only operator of the classic games of chance - and this is the State Lottery of Serbia - founded specially for these games. Therefore, nobody else but the State Lottery of Serbia, as a state-owned company, can operate the classic games of chance, because the State Lottery of Serbia, that is the Republic of Serbia as its founder, has the monopoly rights over these games! Hence, it is senseless to think about the sale of the State Lottery of Serbia, because prior to this the state would have to give up the monopoly and then the State Lottery of Serbia would no longer be the only one who can operate the classic games of chance but they would become free on the market and anyone could operate them, which would be the end of the lottery games as even in the situation when the state has the monopoly over them the subject of business of the State Lottery of Serbia is on decline because of the decreasing interest in these games.
Therefore, the provatization of the State Lottery of Serbia within the present legal framework is impossible. For it to happen, the law would have
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to be changed and the state would have to give up the monopoly over the classic games of chance, which is senseless as the state would by that give up its income, which however little does exist. As there is hardly a European state that has sold the state lottery - on the contrary, in many states the monopoly has been additionally strengthened regardless of the directives about the free market coming from Bruxelles, there can be seen no reason why Serbia should sell its lottery and give up the secure income. Also, the potential buyer of the State Lottery of Serbia, even if the state decided to give up its monopoly over the classic games of chance, would not profit much out of this business as these games would become free on the market and it would be realistic to expect that someone would eventually appear to organize lotto, bingo or instant lottery. In the competition, taking in consideration the conspicuous decline in interest for the lottery games, these games would probably completely dissapear and the potential buyer would fail financially and the state would lose its income. However, again it must be underlined that within the present legal framework the privatization of the State Lottery of Serbia is not possible!
OTHER MODALITIES The Law on the Games of Chance has defined
certain modalities which someone can realize in cooperation with the State Lottery of Serbia and a solution could be found within the framework if there is an interested investor that would enter the potential business.
Namely, Article 19, which lays down that it is only the State Lottery of Serbia that can operate the classic games of chance also defines the concept of the operator:
"The State Lottery of Serbia may, with prior consent of the Government, engage certain legal persons – operators for the operation of certain classic games of chance.
The operators, in the sense of this law, are considered to be the legal persons who, in the name and for the account of the State Lottery of Serbia, operate certain classic games of chance "
The State Lottery of Serbia has considerably used this possibility in organizing tombola, when certain entrepreneurs (operators) in the name and for the account of the State Lottery of Serbia in their premises organized tombola. Of course, it is almost impossible to find an adequate operator for lotto or bingo, or for instant lottery, as the manner of organization of these games does not require the existence of an operator, but this method was used for tombola, although tombola declined considerably because of the enormous development of the black market. In any case, it
is important to have on mind that if you wish to enter this business with the State Lottery of Serbia as an operator, you practically agree to operate certain classic games of chance in the name and for the account of the State Lottery of Serbia and not in your own name.
The same article defines the existence of the so- called agents that the State Lottery of Serbia can hire for the sale of lottery tickets. They can be entrepreneurs, legal or physical persons. The possibilities for cooperation may be found in the field of the selling network, which the State Lottery of Serbia could enlarge or even surrender. At any rate, it is desirable that a good estimation should be made, as the State Lottery of Serbia once before did sell its complete selling network and came out of this business enormously damaged, and the damage was even worse as at the beginnig of realization of this business no guarantee on the part of the buyer was given and all measurements before the business realization indicated a fiasco. Nevertheless, the business was realized, it failed and the selling network was returned to the State Lottery of Serbia, but the consequences were unobservable.
Mutual rights and obligations of the State Lottery of Serbia and the operator that is the agent are according to the law regulated by mutual contracts and the Government of Serbia is the one who determines the manner and conditions of engagement of the operator or agent from this article.
Article 20 of the Law on the Games of Chance defines the "Operation of the games of chance with foreing organizers" and through this article solutions can be found for potential investors in the State Lottery of Serbia. The article says:
"The State Lottery of Serbia may, with previous agreement of the Government, organize games from Article 14 of this law (classic games of chance, author’s comment) in cooperation with foreign organizations for operation of the games of chance to which a foreign country has ceded the right of operation of the games of chance.
With the application for consent from paragraph 1 of this article, a draft contract on joint organization of the games of chance containing the basic contract elements is enclosed.
Mutual rights and obligations between the State Lottery of Serbia and the organizer from paragraph 1 of this article are regilated by a contract, for which the Government’s consent is required."
This article practically defines a partnership that the State Lottery of Serbia could realize with a
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