In recent years, Moldova's economy has fallen on hard times. Negative examples are a dime a dozen, and the positive ones, on the contrary, are very few and far between. The latter observation, however, is no more than a widespread opinion. There are plenty of positive economic examples. You just have to want to see them! One of them is Loteria Naţională a Moldovei, a joint-stock company (JSC) with 100% state capital. Its phenomenon is that in 2020, due to the operational problems of previous years, as well as the coronavirus pandemic, it ended with more than 10 million lei in losses, and in 2021 already with a net profit of 105 million lei.
This is the second such strong positive financial indicator among enterprises with state capital participation (only Termoelectrica JSC has a higher one). Loteria Naţională a Moldovei" JSC contributed more than 80 million lei to various budgets in taxes, contributions and fees. In addition, it transferred to the state budget 52 million lei in dividends. Moreover, ten years ago, the authorized capital in dollar equivalent was $12 thousand.
To understand what kind of "phoenix from the ashes" the economic observer of B & F Vladimir Sidorenko went to see the general director of JSC Loteria Naţională a Moldovei Vadim Dermenji.

B & F: Mr. Dermenji, what did the last year help your company turn a financial fairy tale into reality?

V. D.: It was not a wave of a magic wand. The basis of our financial success is strenuous and effective work of the united and professional team, a profound and comprehensive analysis of previous activities, the subsequent optimization of processes and determination, excuse the tautology, in decision making.

B & F: Who are the founders of Loteria Naţională a Moldovei JSC?

V. D.: The state, represented by the Agency of Public Property of the Republic of Moldova.

B&F: On the basis of which legal acts does Loteria Naţională a Moldovei JSC perform its entrepreneurial activity?

V. D.: In accordance with the laws on joint-stock companies, on the organization and conduct of gambling, on public-private partnership and other normative acts. JSC "Loteria Naţională a Moldovei" has been delegated the right to hold and organize gambling monopoly in the Republic of Moldova.

Being guided by the Law on Public-Private Partnership, contracts were made with the Austrian company "Novomatic" and the Bulgarian enterprise "NGM Company".

B & F: What types of gambling does the company perform and control?

V. D.: One of the activities of JSC "Loteria Naţională a Moldovei" is to give customers the opportunity to test their luck in "battles" with slot machines. For this purpose, in 2018 the agency of public property and our company signed a triple agreement of joint activity with "Novomatic" company, which is the largest manufacturer of slot machines on the world market and the developer of software for the gaming industry, which provided us with machines and IT technology for them. Loteria Naţională a Moldovei" SA has 15 gaming halls opened in different cities of Moldova.

B & F: How is the profit of the company distributed?

V. D.: According to the contract approved by the Government Decision No. 237 of 25.04.2017, the share of JSC "Loteria Naţională a Moldovei" is 51% and that of "Novomatic" - 49%.

Our company signed a contract with "NGM Company" for the organization of acceptance of sports betting, as well as for conducting instant and electronic lotteries.

B & F: Is the profit distributed in the same proportions?

V. D: We have delegated to a private partner the right to be the operator of these gambling games as well. The financial results are distributed according to the percentage of sales set out in the contract - 75 and 25 percent in favor of the state.

B & F: Do foreign companies have the right to do business in Moldova?

V. D: They founded subsidiaries in Moldova in accordance with the legislation in force in Moldova.

B & F: Why didn't "Novomatic" and "NGM Company" sign contracts directly with the Public Property Agency of the Republic of Moldova?

V. D.: Because the Moldovan legislation stipulates that the organization and holding of gambling is a state monopoly, and this function is delegated by the state to  Loteria Naţională a Moldovei.

B & F: Do the casinos also receive permission to carry out their activities by concluding contracts with JSC Loteria Naţională a Moldovei?

V. D.: No, because this kind of gambling is licensed. And our company doesn't need a license because we have a monopoly on other types of gambling.

B & F: The profits made in 2021 and the payments made to various budgets impressed even the unimpressed. But the total legislative ban since January 1, 2022 of any kind of advertising, whether outdoor or virtual, has not lowered the interest of Moldovan citizens to gambling? If so, how much did the financial indicators of Loteria Naţională a Moldovei SA of the first half of this year, for instance, drop compared with those of the same period last year?

V. D.: Within 30%. But the decrease in financial results is not a direct proportional consequence of this ban. There are other factors influencing the drop in interest in gaming. Such as, for example, the reduction of family and personal opportunities due to a sharp rise in inflation, anxiety from military action in the region, migration, interest in other sites and much more ...

It should be understood that a certain number of Moldovan citizens will make sports bets, regardless of whether this type of gambling is advertised or not. Therefore it is important for us to provide them a transparent functioning of the site www.7777.md, guarantees when they receive their winnings, answers to their questions, the possibility to pay taxes legally.

It is also necessary to combat illegal sites operating on the territory of Moldova and encouraging Moldovan citizens to bet on sports through them.    

B & F: How does Loteria Naţională a Moldovei JSC combat them?  

V. D.: Together with partners we inform the competent authorities of the state about the appearance of such sites in order to block them. And in the near future we plan to install special technical equipment and methodology to detect them effectively.  

B & F: And suppress them?

V. D.: We have no such authority. This is a function of the competent authorities.

B & F: The employees of Loteria Naţională a Moldovei strictly observe the provisions of the law prohibiting any kind of gambling advertising because, as they liked to repeat in ancient Rome, "Dura lex, sed lex" ("The law is harsh, but it is the law"). But there is one "but". One of the options of the instant lottery is to determine the cash winnings directly during television commercials. But since the ban on advertising has already been in effect for nine months, such an option is not carried out. At the same time, Article 4 of the Law on Consumer Rights Protection of RM states that "consumers, when purchasing goods and using services, have the right to state protection of their legitimate interests". How does Loteria Naţională a Moldovei SA intend to provide the consumer with the promised service? Or doesn't the postulate "Dura lex, sed lex" apply to it?

V. D.: We are currently working with the Public Property Agency and our partner "NGM Company" to solve this problem. In the near future we will announce the decision through mass media. "Loteria Naţională a Moldovei" always remembers that the most important thing for us are the players, and we try to build a trusting and mutually beneficial cooperation with them.

B & F: Many citizens of Moldova and some of the leaders of the country, to put it mildly, have ambiguous attitude toward gambling and propose, for example, based on the experience of other countries to ban it in Moldova. Are you familiar with this public attitude?

V. D: Yes, only with this kind of decision, as the experience shows, not much can be achieved. Gambling has been around since ancient times. Banning them is impossible to eradicate. They will simply fade into the shadows. To avoid this it is necessary, on the contrary, to take them under the wing of the state.

In modern conditions, the organization and conduct of gambling is a dynamically developing entertainment industry around the world. There is a stable demand for them, and there is considerable money in circulation. Therefore, the authorities should not remove themselves, but take this industry under their control. In Moldova, I'm not saying this to praise myself, a lot of positive things have already been done in this direction. Thanks to the public-private partnership, many things are concentrated in one hands. Financial laundering schemes are strictly monetized, the control of preventing minors from gambling is strictly implemented, as well as the tax component of this segment of the Moldovan economy is respected.

Studies conducted in many developed countries show that gambling is inherent to people of different ages. This is a given, which cannot be ignored! Many even make provisions in their family and personal budgets for participation in gambling. And not for the sake of enrichment, although such a desire is present, but to test their planuda to good luck.

And players also experience unique feelings in the process of the time interval from the moment of purchasing a ticket or paying a bet to receiving information about the result. For many people, the drive is the process, not the outcome! However, as many people, so many opinions!

B & F: What's it like to be in the midst of gambling all the time?

V. D.: It's not boring and it's interesting! The activity of the regulator in the gambling market is a special activity. If a part of civil society thinks that in this segment of the economy there is a deception of those who want to test their luck, they are wrong! The law on organisation and holding of games of chance prescribes that, depending on the type of game, from 70 to 95% of the draw should go to the winning fund.

Gambling is an industry. And in Moldova it is under serious state control. We operate on this market not to cheat anyone, but to provide customers with quality, honest and controlled services!

B & F: Thank you for your informative conversation, which I would like to end with the words of the singer, poet and composer Oleg Gazmanov: "Let your wishes come true to the inevitable!

See source here www.profit.md