Czech gambling operator Synot Tip has cancelled its high profile sports sponsorships in protest over the country’s new gambling tax hikes.
On Thursday, Synot Tip issued a statement saying it was scrapping “most of its sponsorship and advertising activities” with Czech sports organizations. The company says it is doing so due to the “sudden increase in taxes in the lottery industry.”
Czech legislators recently approved a new gambling tax regime, which saw them shift from a flat 20% on all gambling winnings to a tiered rate, with lotteries and sports betting taxed at 23% and slot machine tax rising to 28%. The increase was the second rate hike in the last four years.
Neofytos Neofytou, director of Synot Tip International Ltd, claimed to be “shocked” by Czech legislators’ “unprofessional and populist approach” to revenue generation. Neofytou said the new tax would cost Synot Tip “hundreds of millions of crowns” and thus it “simply can not support” sponsorship activities any longer.
Synot Tip had been the title sponsor of the Czech First League, the country’s top football division. Last July, Synot Tip signed a two-year deal wit the league’s top team, AC Sparta Prague. The company also sponsored First League team FK Jablonec and CEZ Basketball Nymburk, which plays in the country’s top b-ball league.
Ivo Valenta, chairman of Synot Tip’s Cyprus-based parent company WCV World Capital Ventures Limited, said it was “not possible” for a foreign company to be “subsidizing business in the Czech Republic.” Valenta said the company would use “the very limited resources” it had left after paying the new Czech tax to support sport in the other dozen or so countries in which it conducts lottery operations, including Latvia, Romania and Slovakia.