Not Czeching Out: Babis Does Not Sneak New Policy Past Citizens

Lee R. - August 13, 2016

Heavy taxes and ISP-blocking spur a national “hacktivist” protest.

Though legal in the Czech Republic as of a month ago, no one would really call online gambling permissions “free” in any sense of the world.

Minimal Entry

Despite legislation that Czech President Miloš Zeman signed into law a month ago to open up the Czech gaming market to non-Czech providers, a curious number of only five licensed providers currently operate in the country.

Discouraging Terms

Maybe that´s because the new law requires licensed online gambling operators to pay 35 percent of gross gaming revenues on casino games according to a random number generator (RNG), with sports betting and lottery games being taxed a flat 23 percent.  These levies all come on top of an across the board 19 percent tax on corporate income.

Heavy Levy  

The heavy taxes can explain the dearth of new applicants to the new Czech market.  Originally launched in 2014, the proposals are the product of Czech Finance Minister and Deputy Minister Andrej Babis´ staunch opposition to gambling. 

Babis had originally sought to levy a 40 percent tax heavy enough to make the money it brought into the government significant enough to offset the social ills it ostensibly causes.  

Cost of Doing Business

Babis explained his position to Business Week by saying “the indirect costs for the state stemming from such gambling are several times higher than the revenue it collects. That should be made even.”

Hacktivist Protest

The unpopularity of Babis apparently is not limited to online operators, as left-wing “hacktivist” collective Anonymous recently protested the new online gambling laws by attacking the online divisions of the billionaire´s food and agriculture empire.

Opposing Censorship

Anonymous was not advocating online gambling but taking issue with internet censorship in response to blacklisting provisions added by the new gambling regime against non-licensed gambling sites, giving rise to the possibility of continued ISP-blocking in the Central European state. 

Anonymous Position

Anonymous articulated its objection through a YouTube video stating that “The Finance Ministry led by Andrej Babis gets almost limitless power to censor the internet. It is time to move against it.”  The hack was that move, taking down two Babis’ holding websites Monday evening, including his holding company Agrofert´s website.

Contradictory New Regulation

The Czech Republic´s exploitative new gambling regime looks like the exception to the rule of free market idealism which most regulatory markets pursue.

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