Influence of the amendment of the Lotteries Act on financing sport

Abstract

Contents of this contribution are analysis of changes in financing sport caused by the amendment of the Lottery Act and comparison of condition of sport funding before and after the amendment had enter into force. The literature review was used for comparison of the amendments of the Lotteries Act. Act No. 458/2011 Coll. on changes to acts relating to the establishment of a single collection point has among others amended also Act No. 202/1990 Coll. on lotteries and other similar games, as amended in the name of the effort for better regulation of gambling. Lottery companies were exempt from corporate income tax (profit tax) and they are liable to donate part of their income to public interest purposes. The amounts paid by the lottery companies to public interest purposes varied depending on amount of income, ranging from 6 % to 20 %. The Amendment unified the lottery companies’ donation to public interest purposes at 20% for all operators without distinction. Unification appears to be a tool for ensuring the same conditions for all lottery operators. However, this amendment had great impact especially on smaller companies in this field, having essentially no effect on the major players, who had already been paying the 20% donation before the amendment. The real result is therefore elimination of smaller lottery companies and reinforcement of the influence of the large ones. The final result is overall decrease in contributions to public interest purposes, which therefore creates a gap in financing Czech sports. An adequate substitute for the loss of contributions to sport, caused by the gradual elimination of small lottery companies, has not been implemented as of yet.