Czech Republic Plans to Tax Unlicensed Online Gaming OperatorsPublished January 21, 2015 by Elana K
Czech Ministry of Finance announces plans to levy high tax on unlicensed online gaming operators.
The Czech Republic is turning up the heat on unlicensed gambling companies operating sites within the country. The Ministry of Finance revealed a new plan on Thursday to levy these unlicensed companies with a tax that will make up for the estimated profit loss to the government through these sites. That figure is estimated to be £17 million annually.
Operators in the Czech Republic are scrambling to seek legal advice and see what this actually means for their companies; some think it might not be worthwhile to pay the tax, and will pull out of the Czech market altogether. The proposed plan is only in the initial stages, but should this motion be passed into law, unlicensed operators will face a tax of anywhere between 20%-30% on their profits.
Betfair’s Reaction to Proposed Czech Tax
Betfair general counsel Martin Lyčka confirmed that the passing of an unlicensed gambling tax could see Betfair and many of other firms leave the market. "If next year the Ministry chooses a new strategy, it is likely that the big players including Betfair [could] leave the Czech [market] and stop accepting bets," Lyčka said.
Another spokesperson from Betfair commented that the company was in the process of reviewing the tax proposal, and though the operator has no “immediate” plans to leave the market, it certainly considers the country’s tax rate to be “too high."
Czech Licensing Requirements
As of now, one of the current licensing requirements in the Czech Republic is that the company must establish a physical presence in the country. However, last year the Czech Republic had announced plans to amend its current licensing requirements to enable companies to gain a license without having to meet this requirement. This would enable more remote companies to gain licensing. The new tax is also another step in encouraging operators to obtain licensing; but the costs might just be too high and end up driving them away.