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Czech Republic - online gambling regulations

Published by Niki | June 23, 2020

Country Specifics

It seems that every country in the world has been caught up in the phenomenon known as online gambling. Every day more players make the move to sign up for online casino entertainment.

The main problem is that most do so without proper research on the legalities regarding this activity. In most countries, online gambling has been legalised in order for the country to regulate it properly while keeping players safe.

Online Gambling Regulations in Czech Republic

Other countries choose to ban the activity, and then there are some like the Czech Republic that has some confusing laws and regulations. For Czech citizens, there have been a lot of changes in the online gambling industry which could affect their gambling habits.

The Czechs are known for their love of gambling, and with this guide, we aim to provide all the necessary information needed for players from this region. We’ll take a look at the history, laws and upcoming challenges which the online gambling market is facing in this country.

History and Laws of online gambling in the Czech Republic

Gambling is an extremely popular form of entertainment in the Czech Republic. It all started with the rise of land-based casinos in the 1990s. With the Czech Republic being recognized as the top European country where most residents gamble, many problems arose. In fact, throughout the years the laws have been changed in an effort to curb gambling and help players break free from potential gambling addictions.

Throughout the years, gambling has been legal with only limited restrictions being put in place. The main restrictions, however, were on the number of land-based casinos in the country. Online gambling, on the other hand, was a completely different story.

The Ministry of Finance is the country’s institution that handles all licensing applications awarded to online casino operators. The main problem with the laws of the country was that licensed operators were watched closely while unlicensed operators were free to do as they please. Thus, it made no sense for the government to award licences, seeing that any foreign operator could enter the market without the fear of being hunted down or punished.

This led to a massive dispute, as licensed operators felt their business was being harmed by the illegal sites that had a larger offering. They urged the authorities to amend the laws and pay more attention to the current situation in the online gambling market.

It was only when the European Commission started questioning the adequacy of the gambling laws and demanded amendments be made, that things started moving in the right direction. The EU insisted that the gambling laws in the country be reviewed and changed to meet the EU required standards.

The changes in the laws made it possible for more foreign operators to enter the market, but due to limitations being placed on their offering these changes were not as successful as one would have hoped. That being said, the Czech Republic is determined to expand its online gambling sector. Before the latest legislation was put in place, there were only 5 operators providing online gambling services within the country.

The existing Gambling Act which dates from 1990 is the one that has been used and amended throughout the years. With the most recent changes to the law, foreign operators are allowed to obtain gambling licences within the country. One of the most important factors of the bill is that all licensed operators will be forced to provide responsible gambling tools to help players avoid gambling problems.

The latest amendments to the laws were implemented in 2017. According to these laws, online gambling is now fully enabled and regulated. That being said, the new laws also come with massive tax rates applied to the annual revenue of operators.

With the new regulations, the government has also made it clear that the unlicensed sites that have been enjoying free reign over the Czech market up to that point will do so no more. Since the new laws have been implemented, various ISP’s have been blocked and banned from the country. There have been various arguments on this and even the higher authorities have questioned whether this is legal or not.

By the end of 2017, the Czech Constitutional Court concluded that it is not illegal, and the blacklisting can continue. It has been said that the fines are rigorous, so operators who still ignore the newly implemented laws can get into serious trouble when caught.

Are gambling winnings taxable?

For players who participate in online gambling activities in the Czech Republic, there is some good news. All winnings made from online gambling are tax-free. Thus, if you score a big win on any online casino site it is yours to keep. Players are not required to declare winnings for income tax. There is, of course, the downside of not being able to claim back your losses, but keeping your wins is definitely a bigger perk.

For online casino operators, the tax situation is quite brutal. In fact, with the new amendments to the laws operators have to pay 23% tax on annual revenue from gambling. The tax situation is quite confusing as lotteries and sports betting wins are taxed at 23%, and slot machine winnings taxed at 28%. It seems that government officials really aren’t making things easy for online casino operators.

Is online gambling legal in the Czech Republic?

In short, online gambling is completely legal in the Czech Republic but only on licensed sites. The problem is that the government is still finding its feet in terms of imposing regulations and regaining control on the market.

It also doesn’t help that the new laws are extremely off-putting for any foreign operators who were hoping to enter the market legally.

For residents in the country, it is still okay to find gaming entertainment on unlicensed foreign sites. There are no laws prohibiting individuals from within the country playing on foreign sites. Take a look at the top-rated online casinos that are still offering their services to Czech Republic players.

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