Czech Republic Kicking Off 2017 with New Set of Gambling Laws

A new Gambling Act will become effective as of January 1, 2017, in the Czech Republic. The new set of various gaming laws was adopted unanimously adopted by the Czech Senat earlier this year and subsequently signed by President Miloš Zeman. Its primary goals are better regulation and increased taxation.

Aligning with EU Regulations

Laws becoming effective in 2017 will bring the Czech Republic in line with EU regulations. Current provisions effectively violate EU laws, as they prohibit EU business entities from operating gaming ventures in the country. This will change on January 1, as interested EU operators will be able to apply for gaming licenses, provided they meet the stipulated criteria.

License Requirements

In an effort to bring order to online gambling market in the country, new laws provide clear guidelines on what conditions need to be met for a business entity to successfully apply for a gaming license. These provisions relate to businesses in the EU and EEA countries.

Apart from having an official seat in one of the EU or EEA countries, applicants will also need to show transparent organizational and ownership structure. An applying company also needs to have €2 million in own equity and make a security deposit of €1.1 or €1.9 million, depending on the type of games offered. Additionally, an applicant mustn't have any outstanding public debts, criminal history, or history of bankruptcy or liquidation.

Following the adoption of these laws, several major operators including William Hill withdrew from the Czech market. They are expected to return in the near future, however, as it is probable to assume that they will get to applying for and obtaining relevant licenses.

Increased Taxation

Apart from strict licensing processes, new laws will also bring much stiffer taxation policies. Online casino and, most likely, online poker operators will have to pay 35% tax on their gross gaming revenue. Sports wagering businesses and lotteries will be a part of a lower tax bracket, paying 23% on their GGR. These new taxes are added to the already existing 19% corporate tax.

These gaming law changes could make the Czech Republic less appealing to some gambling operators, but it is expected that big names of the gaming industries will apply for local licenses nonetheless.