Czech Government Opens Online Gambling Market

Published Monday, April 18, 2016 -
Czech Government Opens Online Gambling Market

The jurisdictions in Eastern Europe such as Croatia and the Czech Republic are still working out issues related to their current laws regarding online gambling. In the Czech Republic there has been some efforts made to change the laws on online gambling but not without some controversy. After a delay the Czech lower house has approved legislation that will finally open the online gambling market up to offshore enterprises as well as a tax increase on existing companies offering gambling services.

The new regime will be rolled out in 2017 after the formality of approval from the Czech Senate. The current legislation was considered to be insufficient to regulate the online market, and restrictive for those operators that are licensed by the State Supervision of Gambling and Lotteries Department of the Ministry of Finance, of which there are five licensees including  Sazka, Synot Tip, Chance, Fortuna and Tipsport. The licensed operators have been critical of the current tax laws which have restricted their growth leaving the licensed operators unable to compete with unlicensed operators. The European Commission has been alerted to the possible illegality of the Czech Republic’s gambling laws.

Gambling is a popular form of entertainment in the Czech Republic and represents a major percentage of Czech economic output. In 2015 Czechs spent around $5.8 billion on gambling related products making that approximately 3.5 percent of annual economic output. More than fifty percent of the totoal spend was on video slot machines as well as the traditional mechanical versions.

The Finance Ministry estimates that the bill will garner an estimated increase of 1.5 billion crowns revenue each year. The new legislation is applying preventative gambling addiction measures, with a second bill proposed for harsher rules for the use of slot machines and video-lottery terminals.

The tax rate the new legislation imposes has created the most controversy with slot machine operators saying the increase is unfair to them in particular.






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