Czech Online Gambling Operators Facing New Taxes

Published Monday, January 19, 2015 -
Czech Online Gambling Operators Facing New Taxes

The Czech Republic is now in the process of revamping its gambling laws after the European Commission requested changes in the existing regulations. The government expects to enact new gambling laws which will include online gambling, slot machines and lotteries by 2016 The gambling industry in the Czech Republic will at sometime be subjected to tax increases that it has been suggested will go from the now in effect twenty percent on all gambling services to a variable rate as high as forty percent on revenue from live slots.

Offshore operators cannot obtain Czech gambling licenses because of the requirement of a physical presence within the country. The new regulatory platform will eventually do away with this requirement. Unlicensed online gambling operators will be requested to submit  20% of revenue and possibly 30% at a later date. The move to acquire revenue from this source is justified by the obvious facts which the Ministry of Finance gleaned from the payment processing records which gives the government data on how much operators make as opposed to what they pay out. Deputy Finance Minister Ondřej Závodský was quoted as saying in the Hospodářské Noviny news  that the government might not be able to “block these illegal movements” but that didn’t mean they couldn’t “monitor them in detail.” The government is intent on reclaiming part of the annual CZK 1b (US $41.4m) in tax revenue.

The general counsel for UK online betting operator Betfair, Martin Lyčka said to Hospodářské Noviny that if the government move on the new tax plan it was “likely” that offshore operators such as Betfair might choose to remove their services in the Czech jurisdiction. The market would then be controlled by just a few Czech government licensed online operators, including companies Fortuna and Tipsport. This may be less advantageous for consumers who find that with more competition there are better odds and more variety of play options.


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