Thus far the Czech gambling regulations have not been in keeping with EU regulations. The freedom to offer products EU wide as an EU company has been violated by Czech regulations. In other words, sports betting and online gambling operators within the EU that had legitimate EU licenses were not allowed to offer their products in the Czech Republic.
It’s not the only EU country where this is currently the case, but the Czech Republic follows in the footsteps of Romania and Denmark by opening up their market. Since the 1st January the new regulations have been in effect and a few consequences have already been felt.
The new laws have been devised to sort out the unstructured situation in the Czech gambling market, which includes new licensing requirements as well as new tax laws. Gambling operators that are henceforth applying for a Czech gambling license will need to belong to an EU or EEA country, which includes having their official seat in such a country. Operators will need to prove that they own at least 2 million Euros in own equity and they are also required to deposit 1.1 or 1.9 million Euros as a security. The amount for the security deposit will depend on the games offered.
Interestingly all applicants for Czech licenses also have to have a clean criminal record and can’t have a history of bankruptcy or liquidation or any outstanding public debts.
In addition to the strict licensing requirements, the taxes that will be imposed on gambling operators are also pretty stiff. Online casinos and perhaps other operators will be levied with a tax of 35% on their gross gaming revenue. Lotteries and sports betting operators ‘only’ have to pay 23%. These taxes, however, will be levied on top of the 19% corporate tax that has already been in place.
For the time being it has emerged that William Hill has pre-emptively withdrawn from the Czech market as of the 30th December. The operator advised that they would not be offering their services to Czech customers or affiliates and that customers should withdraw their remaining funds from their player accounts. The operator did express hope to return to the market in the future, however.
It is indeed expected that the biggest industry names will be applying for licenses for the Czech gambling market. It is infinitely more desirable to operate legally than in a grey zone. That said, the heavy taxation and strict requirements may not make the Czech market appealing to everyone, especially smaller or newer operators.