• In early 2017, new gambling laws were adopted in the Czech Republic after its existing legislation was thoroughly overhauled. All of this came after the country was scolded by EU authorities, as its previous laws didn’t comply with the Directives and laws set out by the union. Weeks after the new regulations were put in place, PokerStars claimed the country’s first international operator.
• The Czech Republic is set to modernise its gambling regulation by adopting the new Act No. 186/2016 Coll., on Gambling (the 'Gambling Act').
• Under Czech law, gambling is generally defined as a game of chance, betting or a lottery in which a participant wagers a bet while no return of such bet is guaranteed, and the win or loss is entirely or partly subject to chance or unknown circumstance. This definition derives from Section 3 of Act No. 186/2016 on gambling (the Gambling Act).

In the Czech Republic, the gambling tax is calculated as a percentage of the difference between the total value of accepted bets or wagers and the total value of paid winnings, in other words the gross gaming revenue (GGR). Under Czech law, gambling business is regulated mainly by the Act No. 186/2016 Coll., on gambling as amended (“Czech Gambling Act” ), which defines all important terms and also rules for operating gambling business in Czech Republic and regulates offenses and sanctions for such offences in this area.

Gambling legislation is a complex issue and there are different approaches to the regulation of sports betting, casinos and online betting from nation to nation.

So if you live in the Czech Republic, or are planning to visit, what rules are in place to govern gambling activities and are there any exceptions?

Gambling types & licensing

It helps to start by looking at the kinds of activities which are explicitly defined as gambling within Czech law, of which there are eight. This includes lotteries with a cash prize, odds betting on sports or public events, bingo, slot machines, table games, raffles and card game tournaments.

There is a degree of ambiguity in the regulations with regards to activities which could technically be classed as gambling but are not yet covered by this legal framework. Things like fantasy sports leagues, for example, do not fall under the current definitions but may do in the future.

Back in 2017, the introduction of the Gambling Act helped to codify a lot of these activities, while also creating a licensing scheme which made it possible for operators of both land-based and online casinos like Casumo to operate legally in the Czech Republic.

This significant regulator shift was taken as a means of eliminating the black market for gambling and also to help generate tax revenues from this industry, while also regulating it closely and protecting players where necessary.

Municipal differences

While gambling in the Czech Republic has been legalised and is regulated at a state level, it is still within the power of individual municipal regions within the country to impose restrictions or outright bans on certain types of activities, according to their own policies. For example, some cities do not allow bingo halls or card tournaments to take place within their limits.

This is worth bearing in mind if you are visiting, since you may find that some parts of the country are more receptive to and supportive of gambling than others.

Online aspects

In order for online gambling sites to offer their services to people in the Czech Republic, they need to obtain a license from the government. Those that do not could be hit with various restrictions, such as having any payments made to or from them being blocked, or finding that their websites are no longer accessible to Czech players.

Several hundred operators have already suffered this fate, although many more have applied for and received licenses, meaning that they are now regulated locally and can continue to deliver services without hindrance.

Czech Online Gambling Law

Industry size

Interestingly enough although the legalisation and regulation of most forms of gambling came into effect fairly recently, there has already been some unexpected movement in the market. In 2019 there was actually a 21 per cent dip in profits, blamed in part on the fact that slot machine use declined at land-based locations.

It was not all doom and gloom, with table games managing to come close to achieving double-digit revenue growth, with both land-based casinos and online outlets managing to attract plenty of players to experiences like poker and blackjack.

In terms of the options that players have available to them, aside from using a computer or smartphone to access online casino sites, there are plenty of places to play in the real world, especially in larger towns and cities. Prague has lots of great casinos to consider, for example, many of which rival established venues found in other European capitals.

Today, the Czech Republic has one of the most liberal approaches to gambling on the continent and is helping to pave the way for more regulation and legislation in other countries.

Related

In early 2017, new gambling laws were adopted in the Czech Republic after its existing legislation was thoroughly overhauled. All of this came after the country was scolded by EU authorities, as its previous laws didn’t comply with the Directives and laws set out by the union.

Weeks after the new regulations were put in place, PokerStars claimed the country’s first international operator licence, becoming the Czech Republic’s first licensed online casino and poker operator on 28th January 2017.

Czech Gambling Laws

Despite online gambling revenue rising by more than one-half, the newly regulated gambling market eked out a very modest revenue last year. The local market was opened for licensed iGaming operations by the Czech Republic’s new regulations. While it was hoped that this would cause international operators to flock to the country and generate additional tax revenue, this was not to be.

Local players and international operators alike were far less pleased with the Czech Republic’s new regulations than expected, though Czech officials remained happy with their efforts. By the end of 2017, PokerStars remained the only international operator to have obtained a license from the country’s Ministry of Finance.

Czech Republic Gambling Law

While the country remains an international poker hotspot for land-based gamblers, the same cannot be said for online gambling. Citizens of the Republic may only gamble through officially licensed bodies, which does not leave users with a great amount of choice when only one international company holds this license. Many other international online gambling operators have decided that the online poker market in the Czech Republic is not worth their while when so many taxes and restrictions are in place.

In the midst of all of these legislative changes, major operators like GVC Holdings and William Hill pulled out of the Czech market. Owner of the PartyPoker online poker brand (among others), GVC Holdings has said that they do not intend to pursue a Czech license in the near future.

There are a few reasons for the Czech Republic’s failure to attract further international online operators, but it seems that the main reasons for the new regulations’ failure lie in unnecessary bureaucracy and heavy taxes.

Even with its prestigious license, the strict rules imposed by the country’s regulations mean that PokerStars have had to ban Czech players from tournaments that have guaranteed prize pools.
Online gambling operators are taxed the same as land-based casinos under the Czech Republic’s new gambling laws. This means that operators have to pay taxes of 35% on casino games revenue and 23% on sports betting. Compared to the taxes that operators are asked to pay in other European jurisdictions, these tax rates are simply too high to be worth the effort. At these rates, even the largest and most profitable online operators are put off the area.

The country’s new laws have succeeded in inconveniencing players and operators in almost every way possible. Even the “online” aspect of the system is altered unattractively, with local online players expected to sign up to play at designated physical locations. Many international operators suspect that these points have been favouring local operators over international sites. There are 7,500 of these sites around the country, with verification being carried out at special points like banks and notary offices. These verifications can take a number of days to complete.

These drawbacks haven’t made online gambling completely impossible for Czech gamblers, but they have meant that a number of poker rooms have taken to operating as “gray market” providers. It is, at times, necessary for such companies to get a little creative with regards to the law. While it’s safe for players to use these sites, the operators themselves are taking great risks to run the games.

A review of the new laws has been called for by industry stakeholders. However, as local officials have highlighted, a review like this will only be carried out two years after the initial implementation of the regulations. There is some hope that the politicians’ minds will be changed by the international operators’ new-found lack of interest in the country. Although it’s clear that the country is trying to modernise and improve its laws, the changes that have been made in the Czech Republic so far have been highly ineffective.