Why is Synot suddenly stepping back from sports sponsorships?

Why is Synot suddenly stepping back from sports sponsorships?

Friday, January 22, 2016
The lottery operator has cancelled its title sponsorship in the Czech Republic

Lottery and betting company Synot Group has blamed the rise in gambling taxes as its reason for ending its sponsorship of the Czech Republic’s top-tier football competition less than 18 months into a four-year deal.

Synot became the title sponsor of the Czech Liga in the summer of 2014, but said in a statement that changes to duties introduced in 2015 meant it could no longer afford to spend large sums on sports partnerships in the country. On the announcement of the deal, Liga officials said it was worth “hundreds of millions of crowns” – a figure that Synot director Neofytos Neofytou repeated in this week’s statement as the estimated rise in the company’s tax liability, with Ck100m worth €3.7m and $4.0m.

Czech lawmakers recently approved a new tax regime, which saw them shift from 20 per cent on all gambling winnings to a tiered rate, with lotteries and betting taxed at 23% and slot machine tax increasing to 28 per cent.

As well as ending its deal with the Czech Liga, Synot has also given notice on its shirt sponsorship of Sparta Prague, the most successful football club in the Czech Republic, second-tier team FK Jablonec and basketball side CEZ Basketball Nymburk.

"Legislative changes have had a major impact,” said Neofytou. “The sudden increase in taxes in the lottery industry have meant the loss of hundreds of millions of crowns, with these funds being taken out of our marketing and promotion budget.

“The state has taken such a large amount of money that our activities cannot support sponsorship spending in the market.”
Czech Liga officials were sympathetic to Synot’s argument, with the two organisations choosing to issue a joint statement on the development.

Miroslav Pelt, chairman of the country’s football association, said: “In connection with the change of the lottery law, we expected this development.

“It’s obviously a great pity as co-operation with Synot was at a high level. Now we are waiting for negotiations with potential partners for the league so as to obtain a similar creditworthy partner for the upcoming season.”

Related article: Czech regulator explains changes to "outdated" legislation

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