Very Expensive Agreement: AZTN Fines Five Bookmakers 9.7 Million Kuna

The Competition Protection Agency (AZTN) has fined five bookmakers and imposed administrative penalties totaling 9.7 million kuna for entering into a prohibited agreement that seriously disrupted market competition and harmed consumers, the Agency announced on Monday.

AZTN determined that Favorit Sports Betting, Germania Sport, Prva Sportska Kladionica, Super Sport, and Bolus entered into a prohibited cartel agreement related to the calculation of the manipulative cost in March 2014. AZTN stated that based on direct evidence, it unequivocally established that the aforementioned entrepreneurs agreed on the future method of calculating the manipulative cost in games of chance in Croatia at a meeting of the Association of Sports Bookmakers held on March 26, 2014. The agreement began to be applied on April 1, 2014, thereby concluding a prohibited agreement that disrupted market competition from March 2014 to November 2015.

– The fact that the manipulative cost is not regulated by law and is entirely optional, as confirmed by the betting game organizers in their statements, gives game organizers the opportunity to compete in their offerings with different levels of manipulative costs, which was excluded by this agreement, stated AZTN in its announcement.

It is assessed that their agreement represents a serious restriction of market competition since it concerns an agreement on a component element of price. At the same time, it is emphasized in the announcement that the newly agreed method of calculating the manipulative cost is less favorable for consumers than the one applied before April 1, 2014. This cost was previously calculated as a percentage of the stakes, and after the conclusion of the agreement, as a percentage of the deposits.

– Considering that consumers use the services of sports bookmakers to achieve winnings in betting games, the reduction of stakes due to the change in the method of calculating the manipulative cost also represents a reduction in potential winnings. At the same time, game organizers achieved higher revenue by reducing player stakes based on the new calculation of the manipulative cost, the announcement states.

It is added that when imposing administrative penalties, AZTN, taking into account the severity of the violations and aggravating and mitigating circumstances, assessed that the amounts of administrative penalties would have both a specific and a general preventive effect as a warning to all other entrepreneurs not to engage in violations of competition law.