Evaluation of Gambling Sector Activity in Lithuania, Latvia, Slovak Republic and Czech Republic

. Research background: Gambling is a specific activity that has an undoubtful impact on the national economies, however the evaluation of this sector still has been analysed very little by economists. This article comparatively analyses the peculiarities of the gambling sector activity in Lithuania, Latvia, Slovak Republic and Czech Republic in the period from 2015 to 2020. Purpose of the article: The purpose of the article is to evaluate the activity of the gambling sector in Lithuania, Latvia, Slovak Republic and Czech Republic. Methods: The following methods are used in the article: comparative analysis and synthesis of scientific literature and legal acts, analysis of graphical and statistical data. Findings & Value added : An analysis of scientific literature and legal acts revealed that definition of gambling is defined differently and in some countries certain types of gambling are not even considered as gambling or does not exist. The evaluation revealed that during 2015-2019 the highest AAGR of the gambling sector’s GGR was in Latvia (11.09%) and in 2019 Latvia also had the highest GGR per inhabitant 199 Eur. On the contrary, during 2017-2019 in the Czech Republic AAGR of the gambling sector’s GGR was -5.63% and in 2019 GGR per inhabitant (39.51 Eur) was the lowest. According to the mentioned statistical data, total GGR and the population size, Latvia has one of the largest gambling sector in the evaluated countries, so gambling sector in other countries still has great potential to growth. Although because of COVID-19 Latvia experienced huge losses of GGR, Slovak Republic online gambling sector showed a great potential to grow and it can be assumed that in Lithuania online gambling sector didn’t took over all of the potential revenue from land-based gambling sector.


Introduction
Gambling is a specific type of entertainment causing a lot of debates among politicians and scientists about its harms and benefits to the society and the state. Taking into account the diverse gambling traditions between countries the understanding of what activities are considered as gambling is different. Consequently, the development of gambling sector is uneven and in some countries gambling is more traditional form of entertainment than in others. Although gambling sector affects state's economy no less than other sectors, gambling sector is poorly analysed by economists, especially in the comparative approach. According to [1], gambling is becoming more global and the rapid global growth of gambling sector, especially online gambling and marketing, requires an analysis of these issues that transcend national borders.
This article comparatively analyses the specifics of the gambling sector activity in Lithuania, Latvia, Slovak Republic and Czech Republic. First of all, the different understanding of the definition of gambling in the evaluated countries is analysed. Then the specifics of the legal regulation of the gambling sector in the analysed countries are discussed. Thirdly, in Results part, changes of gambling gross revenue are estimated and changes in development of land-based gambling venues and remote (online) gambling services of the gambling sector is evaluated in the period from 2015 to 2020.
The object of the article is the activity of the gambling sector. The purpose of the article is to evaluate the activity of the gambling sector in Lithuania, Latvia, Slovak Republic and Czech Republic. The tasks of the article are: 1) to analyse the concept of gambling in scientific literature and legal acts of the evaluated countries; 2) to discuss the specifics of legal regulation of gambling sector in the analysed countries; 3) to evaluate the changes of gambling gross revenue of gambling sector and development tendencies of land-based and remote (online) gambling sector in Lithuania, Latvia, Slovak Republic and Czech Republic in the period from 2015 to 2020.

Different understanding of what is gambling
The history of gambling seeks ancient times, first gambling games begins in India, Mesopotamia and Egypt approximately 2000-4000 B.C. [9]. Because demand for gambling was always in every society, prohibition of gambling never worked, so these days gambling is no longer seen just in a negative way, gambling became a form of entertainment [7].
Although the word gambling has been used since ancient times, but it has always been associated with negative things, so the gambling industry representatives have tried to change the word gambling to gaming by associating gambling with entertainment [10]. It is interesting that words gambling and gaming are usually used as synonyms. In [10] opinion, gambling involves risking money or something valuable on an event with unknown result. So, gambling normally consist of following elements: consideration, risk and a prize, differently gaming can be understood as a formalized definition of play [10]. Nowadays, with the help of technological development the differences between online gambling and gaming are becoming less noticeable [10]. According to [11] online gambling is symbolizing an internet revolution and the technological innovations of this century.
Understanding about what is gambling and what type of entertainment can be considered as gambling is complicated. The first reason why this understanding is complicated is because SHS Web of Conferences 92, 0 (2021) Globalization and its Socio-Economic Consequences 2020 In the Slovak Republic gambling is defined as a game where: 1) a gambler pays a stake (can be various types); 2) gambler may obtain a winning (provided that they have fulfilled the conditions specified in advance); 3) the result depends (wholly or partially) on luck or a previously unknown result of a certain circumstance or event [12]. In the Slovak Republic gambling games do not include games in which the result is determined exclusively based on skills. In the Czech Republic the definition of gambling is very similar to Slovak Republic definition, there gambling means a game of chance, betting or a lottery in which: 1) the participant wagers a bet; 2) no return on such bet is guaranteed; 3) the winning or loss is entirely or partly subject to chance or unknown circumstance [13].
In Lithuania gambling is a game or mutual betting in accordance with established regulations where: 1) participants are seeking to win money; 2) participants voluntarily risk their stakes; 3) the gain or loss depends on chance, an occurrence of any event or the result of a sports match [14]. In Latvia gambling is a game where a natural person upon payment of deposit bet may get a prize fully or partially depending on the winning occurrence or circumstances being previously unknown [15]. In Lithuania all games that depends on a person's abilities or skills are not gambling, differently in the Slovak Republic, the Czech Republic and Latvia games that partially depends on skills are gambling. As can be seen, even the gambling definitions are different in all countries, the three main features are in all descriptions: payment, risk and unknown result.
After the analysis of the national gambling acts, all gambling types are being compered according to their descriptions (see Table 1) [12][13][14][15].
means that it is not considered as a gambling in that country, (--) means that this type of gambling game does not exist in that country, (+) means this type of gambling exist in that country. ** According to the description these types of gambling games are partially similar to slot machine gambling games. ***In other countries remote (online) gambling is not a type of gambling, but a way to gamble.
It is interesting that in Lithuania and Latvia lotteries are a different type of entertainment and it is not considered as a type of gambling. Also in the Slovak Republic bingo is as type of lottery, but in other countries bingo is a separate type of gambling (the similar situation with totalizator game). It is worth to mention that in the Slovak Republic gambling Act there is no exhaustive list of gambling types, other games can be considered as gambling if they are meeting the required conditions laid down in gambling Act [12]. It can be concluded that in all countries there is at least one type of gambling game which is not considered as gambling in another country or does not exist at all.

Gambling sector regulation in the evaluated countries
Land-based gambling was legalized in the Czech Republic and Slovak Republic in 1990, in Latvia first casinos established in 1991, however in Lithuania gambling was introduced just in 2001. According to that, Lithuanian inhabitants who wanted to gamble for a long time were traveling to Latvia. Differently from land-based gambling, online gambling was legalized much later (see Table 2) [16][17][18][19]. Five gambling regulation ways in the country may be: a free market, a liberal licensing system, a restrictive licensing system, a state monopoly and a prohibition of gambling [3]. Free movement of services is one of the fundamental principles in the European Union (hereinafter "EU") law [20]. Although, provision of gambling services has its specific regulation in two different levels -EU and national. So, in the context of the free movement of services in EU, these services are considered to be a different category of services [21]. According to [3], most of the literature still continues to focus on the regulation of land-based gambling, however online gambling is becoming the main choice between gamblers.
Remote (online) gambling services are a unique type of services that do not respect state borders. EU Member States (hereinafter "MS") have a discretion right to decide how gambling services could be provided on their territory. There may be two ways when provision of online gambling services could be legal in another MS: 1) first situation is when Member State accepts a license issued to service provider in another Member State and allows to provide online gambling services on its territory; 2) second situation is when a Member State requires a service provider to be licensed in that Member State and only then allows to provide services on its territory [21].
In all evaluated countries online gambling services providers have to be licensed in that country in which they want to provide gambling services, these MS don't recognize the licenses issued to service provider in other MS. It is interesting that in Lithuania a service provider has to provide a land-based gambling services in the Republic of Lithuania territory if it wants to get a permission to provide online gambling services in this territory. In accordance with the legal regulations in evaluated countries, measures against illegal gambling operators are being taken in these countries (mostly blocking illegal gambling operators' websites) [12][13][14][15].
In [1] opinion, measures for responsible gambling can be identified as a legal way for the development of gambling sector. Amendments related with responsible gambling were adopted in all analysed countries. The main measure to fight against this type of behaviour disorder is the establishment of self-exclusion system in the country. In Lithuania the Register of Self-excluded people from gambling was established in 2017, since then more than 15 000 requests were submitted (valid more than 3000). According to [14], person can submit a request to self-exclude from gambling just by himself or request can be submitted by a legal representative of mentally disabled person. In the Slovak Republic since 2019 in the Register of excluded persons are more than 100 000 people. The reason why so many people can't gamble in the Slovak Republic is not only because a person can ask for exclusion from gambling by himself, but there are other reasons why people can be included in this register. For example, more than 90 000 people from households who received assistance in material need can't gamble in the Slovak Republic. In Register of self-excluded people from gambling and interactive lotteries of Latvia since January 2020 are more than 11 000 people. In the Czech Republic the Register of individuals barred from the participation in gambling should be fully functional in December 2020 [16][17][18][19].
Analysis gambling. According to huge numbers in evaluated countries Registers, adopted measures related to responsible gambling showed a great necessity in a short period of time.

Methodology and research limitations
The following methods are used in the article: comparative analysis and synthesis of scientific literature and legal acts, analysis of graphical and statistical data. Part of statistical data was collected from Gaming Control Authority under the Ministry of Finance of the Republic of Lithuania, Lotteries and Gambling supervisory inspection of Latvia, Gambling Regulatory Authority of the Slovak Republic and Ministry of Finance of the Czech Republic (hereinafter "Gambling Authorities") official websites. Other part of statistical data, which was not presented in Gambling Authorities official websites, was conducted by a survey of Gambling Authorities. Statistical data related to population was collected from national statistics databases. After a comparative analysis of legal acts it can be concluded that evaluation of gambling sector activity can be difficult according to different understanding of gambling and different types of gambling in evaluated countries. In order to equalize a statistical data not all gambling types (indicated in Table 1) are evaluated in next part. Consequently, the following limitations of the analysis are determined: lotteries, charity lotteries and gambling games operated by means of video lottery terminals at not being evaluated, because in Lithuania and Latvia various types of lotteries are not considered as gambling. Other types of gambling (indicated in Table 1) are analysed is next part.

Results
In assessing gambling activity one of the main indicators is gross gaming revenue (hereinafter "GGR"). GGR is equal to the difference between the amount wagered and the winnings. According to GGR the development of gambling sector in evaluated countries can be analysed. In Fig. 1. total GGR from gambling in Lithuania, Latvia, Czech Republic and Slovak Republic is presented. According to statistical data during 2015-2019 average annual growth rate (hereinafter "AAGR") of gambling sector in Lithuania was 7.09%, in Latvia 11.09%, in the Slovak Republic 7.61% and in the Czech Republic -5.63% (not all statistical data was received from Ministry of Finance of the Czech Republic) [16][17][18][19]. As it can be seen, the biggest AAGR of gambling sector was in Latvia (11.09%), in the Czech Republic AAGR of gambling sector was negative (-5.63%). AAGR in Lithuania and the Slovak Republic was just slightly different. population size and total GGR of gambling sector in Latvia this type of entertainment is very popular (see Fig.1), so this sector still has great potential for growth in other countries. GGR per inhabitant (older than 18) describes how much GGR is created by one adult per year. According to population size in Latvia one adult creates 199 Eur, in the Slovak Republic 64.89 Eur, in Lithuania 49.07 Eur and in the Czech Republic 39.51 Eur of GGR (see Fig. 2). It can be assumed that in Latvia adults spends more money on gambling than in other countries [16][17][18][19][22][23][24][25] [16]. In the Czech Republic the massive reduction of gambling venues is related to the new requirements for gambling operators (see Fig. 3.). From 2017 technical games can be operated only on the gambling venues which are defined as a gambling room or a casino [17]. According to [9] before these legislation changes the gambling situation in Czech Republic was unique and it reflected the problems caused by the lack of regulation and control of this sector. The similar requirements for gambling operators are also set in the Act of the Slovak Republic No. 30/2019, so in the near future significant reduction of gambling venues could be also in the Slovak Republic.
After the legalization of remote (online) gambling in Lithuania the number land-based gambling venues started to decline (the number of betting offices have decreased significantly, but the number of gambling machine halls has been slowly growing) [18]. In Latvia quantity of gambling venues are slowly growing since 2015 [19]. The density of gambling sector can be evaluated by analysing the quantity of gambling venues in the country. According to the data of 2019 (see Fig. 4), per 100 000 inhabitants (older than 18) there were 33 gambling venues in the Slovak Republic, 25 in Latvia, 16 in Lithuania and 13 in the Czech Republic [16][17][18][19][22][23][24][25]]. This statistical data shows that according to the population the biggest density of gambling sector is in the Slovak Republic and the smallest is in the Czech Republic. It is interesting that in 2017 (before new requirements for gambling operators reached their purpose) in the Czech Republic there were 48 gambling venues per 100 000 inhabitants (more than 3 times higher than in 2019). Even though in the world online gambling sector is growing rapidly, online gambling in the Slovak Republic is open for private companies just from 2019, first private online gambling operators obtained a license in January 2020 therefore it will not be analysed in Fig. 5. In other evaluated countries (see Table 2) online gambling was legalized earlier. Unfortunately not all statistical data was received from Ministry of finance of the Czech Republic, so online gambling sector of this country is not being analysed in this article. Fig. 5. presents the comparison of remote (online) gambling GGR in Lithuania and Latvia [18][19]. According to statistical data in Lithuania during 2016-2019 and in Latvia during 2015-2019 GGR from online gambling sector was constantly growing and had AAGR of 38% and 48.18% respectively. In 2019 GGR in Lithuania reached 40.49 mill. Eur. and in Latvia 54.68 mill. Eur. Even total GGR from online gambling sector was higher in Latvia but percentage of online gambling GGR from total GGR was higher in Lithuania (36% versus 17.8%). Since Lithuania and Latvia are similar countries with culture and population size it can be assumed that online gambling sector in Latvia still has a lot of growth potential until it reaches similar GGR percentage from total GGR as in Lithuania.
In 2020 Q1 and Q2, during quarantine in the Slovak Republic, Czech Republic and Lithuania because of the COVID-19, all land-based gambling venues were closed for a certain period. In Latvia during quarantine, not even all land-based gambling venues, but also all online gambling websites were closed [19]. Fig. 6. shows GGR of gambling sector changes regarding COVID-19 (comparing 2019 and 2020 Q1 and Q2). Statistical data of the Czech Republic (without lotteries) was not received, so analysis includes just Lithuania, Latvia and Slovak Republic (until September 2019 license for operation of online gambling was issued only to one state company) [16,[18][19].
As can be seen from Fig. 6. in Q1 and Q2 2020 GGR from land-based gambling sector (comparing to Q1 and Q2 2019) mostly decreased in Latvia -59 %. In Lithuania GGR from land-based gambling sector decreased 41 %, in the Slovak Republic just 22 % during this period. In the Slovak Republic due to new legislation related to remote (online) gambling sector opening for private companies, in Q1 and Q2 2020 this sector increased more than 700 % comparing to Q1 and Q2 2019. In Lithuania GGR from remote (online) gambling sector increased 34 % during this period. Consequently, because of government decisions to close online gambling websites during quarantine all gambling sector in Latvia experienced huge losses of GGR. In the Slovak Republic remote (online) gambling sector showed a great potential to grow. According to the total GGR losses of land-based gambling sector, it can be assumed that online gambling sector didn't took over all of the potential revenue from land-based gambling sector during quarantine in Lithuania.

Discussion and conclusion
The definition of gambling is different in all evaluated countries, but in all definitions there are three main features that characterize gambling: payment, risk and unknown result. The comparative analysis of the legal acts revealed that in all countries there is at least one type of gambling game which is not considered as gambling in another country or does not exist at all, for example lotteries in Lithuania and Latvia are a different type of entertainment and are not considered as gambling.
Also, the assessment of legal regulation showed that all countries took actions against negative gambling sector effects to the national economies: illegal online operators and problem gambling. Adopted measures related to responsible gambling (Registers of excluded people from gambling) showed a great necessity in a short period of time and given the benefits of these measures they should be as well applied in the other countries.
The assessment of gambling sector revealed that GGR in Latvia increased at a highest rate during 2015-2019, AAGR during this period in Latvia was 11.09%. The lowest AAGR during 2017-2019 was in the Czech Republic (-5.63%). According to the statistical data of 2019, in Latvia GGR per inhabitant (older than 18) was 199 Eur., in the Slovak Republic 64.89 Eur., Lithuania 49.07 Eur. and in the Czech Republic 39.51 Eur., so it can be assumed that in Latvia adults spends more money on gambling than in others countries.
Also, analysis revealed that in 2019 the largest density of the gambling sector was in the Slovak Republic (33 gambling venues per 100 000 inhabitants), and the smallest in the Czech Republic (13 gambling venues per 100 000 inhabitants). In 2017, Czech Republic had the most gambling venues (48 per 100 00 inhabitants) and the reason for this reduction was new requirements for gambling operators. According to statistical data during 2016-2019 AAGR of online (remote) gambling sector in Lithuania was 38% and AAGR of online (remote) gambling sector in Latvia was 48.18% (during 2015-2019). Although AAGR in Latvia is higher than in Lithuania, the percentage of online gambling GGR from total GGR is higher in Lithuania, so it can be assumed that online gambling sector in Latvia still has a lot of growth potential until it reaches similar GGR percentage from total GGR as in Lithuania.
According to the mentioned statistical data -total GGR and the population size, Latvia has one of the largest gambling sectors in the evaluated countries, so gambling sector in other countries still has a great potential to grow. Consequently, during quarantine because of COVID-19, Latvia experienced huge losses of GGR, Slovak Republic remote (online) gambling sector showed a great potential to grow and it can be assumed that in Lithuania online gambling sector didn't took over all of the potential revenue from land-based gambling sector. The results of the research showed that it is meaningful to conduct further researches in such aspects: online and land-based gambling development tendencies in all European Union Member States (comparatively and separately) during and after COVID-19 and positive and negative impact of gambling sector to the national economies.