Czech Republic's New Online Gambling Laws Come Under Scrutiny as GVC Exits the MarketPublished May 29, 2017 by Elana K
While 2017 dawned bright and hopeful for the Czech online gaming market, we find ourselves in the middle of the year looking at a bleak and dreary situation, with a number of large companies having exited the market altogether.
While 2017 dawned bright and hopeful for the Czech online gaming market, we find ourselves in the middle of the year looking at a bleak and dreary situation, with a number of large companies having exited the market altogether. What happened to the market between January and now? What caused this full-of-potential industry to crumble in a matter of months?
Disappointing New Laws
The new Czech online gaming laws were implemented on January 1, 2017, unanimously adopted by the Czech Senate with the primary goals bringing the country up to speed with the rest of the EU countries and as attracting both local and international companies to apply for iGaming licenses.
When these laws were implemented on January 1, UK-based operator William Hill withdrew immediately. It was anticipated that the international powerhouse would return to the Czech market, but instead of returning, it has lead other brands out the door.
Who Else Is Out?
GVC Holdings, the owner of bwin, PartyPoker, and many other online casino and sportsbetting brands, recently announced that they are leaving the Czech market. The withdrawal, unfortunately, does not come as a surprise, as the company had temporarily suspended its operations in the Czech Republic earlier this year, while it prepared to apply for new licenses.
PartyPoker released the following statement to its customers:
"Our goal is to always offer our customers a reliable and safe gaming experience and ensure that we offer our gaming products only if we are sure that everything is in full compliance with the law.
“As already mentioned, we asked about the release of a few licenses that allow you to use our services in the Czech Republic.
“However, the processing of these requests has revealed that the recent changes in the laws in force in the Czech Republic, along with their application in practice by the Czech authorities are incompatible with the principles of the European Union, and should not therefore be used."
The Real Reasons Behind the Withdrawal
Behind the scenes, GVC Holdings complained that the Czech government did not implement punishments for unlicensed operators, while licensed operators were expected to pay heavy taxes ranging between 23 percent to 35 percent.
Another sore spot was the controversial Czech Point program, which requires new online account sign-ups to take place at designated public administration centers. International operators complained that this unfairly favors local operators such as Fortuna and Sazka, while putting international operators at a disadvantage.
Is There Hope?
While Playtech debuted its products with Czech-licensed online operators in March, only one international operator has launched operations under a new Czech license, despite the new laws having gone into effect nearly six months ago.
It seems that if the Czech government wants international operators to stay and/or re-enter the market, it will have to reconsider some of its new laws and address these very-real complaints. The tax rate must come under special scrutiny, since that is a sore subject for both international and local operators.
Hopefully, the exit of GVC Holdings will be the wake-up call the government needs to get things back on track.