The Czech Republic is a land-locked country located in central Europe. It borders Poland to the north-east, Slovakia to the south-east, Austria to the south and Germany to the west and north-west.
Gambling in the Czech Republic has a long and interesting history, with the earliest operators dating back to 2009. At the time, the country allowed five land-based operators to provide their services on the country’s territory – Sazka, Synot Tip, Chance, Fortuna and Tipsport. While one of these failed afterwards, the rest surprisingly managed to keep the industry going throughout the complex period prior to 2012.
During those years, offshore operators were given all the market access privileges…
… as these onshore licensed establishments.
Moreover, foreign sites didn’t have to subject their revenue to tax fee cuts, license and penalty charges and the likes. Such circumstances left them thriving in a foreign country, while domestic operators were struggling to sustain their operations.
Amendments to the Lottery Act in 2012 imposed some regulations – offshore companies’ advertisements were forbidden, while casino games were somewhat formally legalized. However, true legalization came soon afterwards, in 2014.
The Czech government had gotten the statistics report on the money they were losing to the unregulated offshore operator base, which is why by the end of 2014, the first steps have been made towards issuing licenses to such platforms.
The new interactive gambling legislation was drafted, proposed and officially signed into law by mid-2016. It permitted all operators with headquarters in the EU or EEA territories to offer their online gambling services to the Czech population that is of age (18 years).
Gambling services allowed under the provisions of this act included sports betting, lottery, online bingo and tombola, online casino games and some smaller ranking poker tournaments. In exchange for this expansion in the online sphere, there have been some restrictions to the land-based gambling market, shutting down slots, gaming machines and similar bars and shops permanently.
The lottery is state-owned so far, even though some initiatives have been put forward to allow privatization. However, no fundamental changes have disrupted the monopoly maintained by the Sazka national lottery.
Ultimately, the government decided to resolve the matter of taxation, so as to allow the industry all the conditions necessary to flourish. After some fluctuations in taxing rates, both land-based and online gambling operators were applied the same 23% gross win tax for all products except bingo and casino games, which are alternately charged a 35% tax, as well as 19% corporate income tax.
While legislation was passed by the end of 2016, it was only in January 2017 that the first operator was officially granted a license. This was Pokerstars, a fairly reputable brand across the full European player pool that was able to cater to the Czech audience through a separate ‘.cz’ domain.
William Hill also made plans early on to enter (or rather ‘re-enter’) the industry as a licensed offshore operator. The responsible body, the Ministry of Finance and smaller organs within it, have not disclosed the actual fee and standards for licensing, but they definitely made their blacklist as public as possible.
Once the legislation for online gambling was passed, the Constitutional Court of the Czech Republic ruled the practice of ISPs blocking certain gambling domains as fully constitutional.
As such, the regulatory body issued a list of disreputable operators, and the respective ISPs in the country blocked all such domains. One major benefit of this access restriction measure is the improved statistics in terms of tax revenues lost to such unlicensed rogue operators accumulating bets from the Czech player base.
In line with the previous paragraph, an even advantage of this ISP blocking practice is the safety and protection of players from such corrupt websites. The respective bodies responsible for this industry have their own set of measures in case of complaints, as well as an escalation procedure should the need arise. Nevertheless, preventive restrictions have proven rather successful, improving and regulating the industry quite notably when compared to its early beginnings.
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