The Chamber of Deputies of the Czech parliament has approved new gambling legislation which will completely overhaul the existing Gambling Act which dates from 1990. The new legislation will allow foreign based operators to obtain gambling licenses in the Czech Republic- something which has not been previously possible.

 

According to Robert Skalina, a senior advisor of WH Partners based in Prague, the new legislation which consists of three separate gambling related bills still needs to be considered by the Senate of the Czech parliament and be signed by the Czech President. However it is expected to come into full force on 1 January 2017, exactly a year later than originally planned.

 

It has been prepared by the Ministry of Finance which is the country’s gambling regulator.  It fully regulates online and land based gambling in all its forms including sports betting, lotteries, casino, bingo and slot machines.

 

Operators targeting individuals resident in the Czech Republic will be required to obtain a license issued by the Ministry of Finance. For the first time, foreign operators based in another EU Member State or in EEA country will be allowed to obtain licenses and these will be issued for a maximum period of six years. The applicant for licence will be obliged to provide a surety for each gambling type and for each online game type either by way of depositing funds to a special account of the Ministry of Finance or by way of a bank guarantee that will be accepted by the Ministry of Finance. The size of surety will depend on the type of gambling product offered and will be between CZK 5,000,000 (approximately €185,000 at the current exchange rate) and CZK 50,000,000 (approximately €1,850,000 at the current exchange rate).

 

The new legislation envisages that the Ministry of Finance will create and maintain a list of webpages with unauthorised online games. Internet connection providers in the territory of the Czech Republic will be obliged to block webpages included in the List and payment service providers will be forbidden to execute payment transactions to or from any payment accounts included in the List.

 

The new Gambling Bill also introduces responsible gaming practices and the operators will be required to offer and enable certain self-restricting measures to their customers depending on the type of game. Furthermore a register of individuals barred from the participation in gambling shall be created and administered by the Ministry of Finance. Gambling operators will be required to ensure that an individual entered in the Register will not be allowed to participate in gambling.

 

A tax rate of 23 percent of gross gaming revenue (calculated as deposits not returned to the customers minus the paid out winnings) will apply to all gambling business apart from so called ‘technical games’ such as slot machines and electromechanical games, which will be subject to tax rate of 35 percent of gross gaming revenue.

 

For further information on this topic and the licensing process please contact Robert Skalina, a Prague-based senior advisor at WH Partners

Email: robert.skalina@whparters.eu