1. Relevant Authorities and Legislation
1.1 Which entities regulate what type of gambling and social/skill gaming activity in your jurisdiction?
1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.
The main law that regulates gambling in the Czech Republic is Act No. 186/2016 Coll., on Gambling ("Gambling Act"). It defines "gambling" as a game of chance, betting or a lottery in which a participant wagers a bet, while no return on such bet is guaranteed, and the win or loss is entirely or partly subject to chance or unknown circumstance. Both bets and winnings in a gambling game must be of monetary nature, except in case of in-kind lotteries, instant-win lotteries and supplemental lotteries, where the winnings can be in the form of other material things and services.
The Gambling Act specifically regulates and recognises only the following types of gambling:
- odds betting;
- totalisator games;
- technical games;
- live games;
- raffles; and
- small-size tournaments.
Any game that falls within the definition of "gambling" must also fall within definition of one of the above gambling types set out in the Gambling Act; otherwise, it is prohibited.
Each of the above gambling types may be operated in both land-based and online form, except for raffles and small-size tournaments, which may only be operated in land-based form.
Due to the above, the offer of Relevant Products in the Czech Republic is as follows:
- "social gaming" with no prize in money or money's worth and skill games and competitions with no element of chance are not considered "gambling" under the Gambling Act;
- fantasy betting is only permitted if it meets the requirements set out in the Gambling Act for the "odds betting" game type or the requirements set out in the Gambling Act for one of the other types of gambling; and
- all other Relevant Products are permitted.
2. Application for a Licence and Licence Restrictions
2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, "Licences") are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?
For operation of the Relevant Products in digital form, a "basic licence" issued by the Ministry of Finance ("Ministry") is required. For operation of "gaming" in land-based form, a "gambling premises location licence" issued by local municipalities is required, in addition to the basic licence.
2.2 Where Licences are available, please outline the structure of the relevant licensing regime.
Gambling operators are required to obtain a basic licence from the Ministry to operate any of the permitted types of gambling, with the exception of raffles and small-size tournaments. The licence application fee is CZK 5,000. For each type of gambling, a separate basic licence is needed. Therefore, if for example an operator wants to offer an odds betting game, a technical game, and a live game, it will be required to hold three separate basic licences.
In the basic licence, the Ministry will specify the type of gambling permitted under the issued licence, conditions of its operation and approval of the game plan and models of technical equipment through which the gambling shall be operated.
A basic licence is not required for operation of raffles and small-size tournaments. An operator of a raffle in which the game receipts exceed CZK 100,000 and an operator of a small-size tournament only have to make a prior notification to the municipal authority of the municipality on whose territory the respective raffle or small-size tournament will take place.
In addition to the basic licence, a gambling premises location licence is required for land-based operations of bingo, technical games and live games. Only the operator to whom the basic licence for the respective game operation has been issued is eligible to apply for the gambling premises location licence. A gambling premises location licence is issued, under delegated jurisdiction, by the municipal authority of the municipality within whose territorial jurisdiction the gambling premises are to be located. The gambling premises mean a gambling room or a casino. "Gambling room" means a standalone, structurally separated premises on which a technical game is operated as a core activity. "Casino" means a standalone, structurally separated premises on which a live game is operated as a core activity.
In the gambling premises location licence, the municipal authority will approve the location of the gambling room or casino, operation of the respective gambling type, opening hours of the gambling premises, and specification of terminal devices through which the game will be operated, including their quantity, types, serial number(s) and number of game access points of such terminal devices through which the game will be operated.
Based on Act No. 128/2000 Coll., on Municipalities (Municipal System), a municipality may by generally applicable decree:
- order that land-based bingo, technical games, live games or small-size tournaments ("Relevant Games") may only be operated at certain places and times;
- prohibit operation of the Relevant Games only at certain places and times; or
- prohibit operation of the Relevant Games throughout the municipality territory completely.
2.3 What is the process of applying for a Licence for a Relevant Product?
1. "Basic licence" application: The basic licence application shall specify which gambling type it relates to and shall be accompanied by the following documents, which cannot be older than three months at the time of submission:
- a list of persons who:
- are members (shareholders) of the applicant;
- are members of the applicant's statutory body;
- are members of the applicant's supervisory body;
- have general power of attorney issued by the applicant; and
- are the beneficial owners of the applicant; (collectively, "Relevant Persons");
- proof of the provision of the surety to the Ministry;
- proof of the "debt-free" status of the Relevant Persons;
- proof of clean criminal records of the Relevant Persons;
- a game plan;
- a document certifying a professional assessment and approbation of service worthiness of devices used for operation of gambling by the applicant; and
- a document identifying the location of its server – this will have to be a contract stipulating where the server is located. If the contract was entered into more than three months prior to the date of the licence application, the applicant will also have to submit a confirmation from the counterparty stating that the agreement is still valid.
With a licence application for a cash-prize lottery, in-kind lottery or instant-win lottery to be operated in a land-based form, the applicant must also submit a specimen lottery ticket marked as such and documents proving that the lottery tickets are secured against abuse or documents on their production specifications.
With a licence application for odds betting or a totalisator game to be operated in a land-based form, the applicant must also submit a list of places (premises) where participation in the odds betting or totalisator game will be enabled.
With a licence application for odds betting or a totalisator game, to be operated in a land-based or a digital form, the applicant must also submit a contract with the person who will monitor influencing of the sport results. If the contract was entered into more than three months prior to the date of the licence application, the applicant will also have to submit a confirmation from the counterparty stating that the agreement is still valid.
With a licence application for a live game to be operated in a land-based form, the applicant must also submit a set of marked specimen cheques and chips.
The operators must satisfy the following conditions ("Conditions") in order to obtain and keep a licence:
- The operator must be a corporation with:
- its registered office in the Czech Republic, in another EU Member State, or in a state that is a party to the Agreement on the European Economic Area;
- an organisational chart that sets clear and comprehensive definitions of realms and decision-making powers;
- equity totalling at least EUR 2,000,000;
- transparent and unobjectionable origin of its resources;
- transparent ownership structure, clearly identifying its beneficial owner(s); and
- substantive personnel and organisational capacity required to carry out its activity in the extent to which it foresees to operate gambling – this means that at least five persons engaged by the operator must each have at least three years' experience in the relevant gambling type – for example, in a live game, this condition will apply to a croupier.
- The operator must have "debt-free" status. This means that neither the applicant nor any of the Relevant Persons will owe any money to tax/financial/custom/health insurance/social security/employment authorities in the country where they have their registered office, place of business or residence, or in the country in which they stayed and developed activities for more than three months in the last five years preceding the date of the licence application.
- The operator must have a clean criminal record. This means that neither the applicant nor any of the Relevant Persons have been sentenced for a deliberate criminal offence, or for an economic criminal offence, or for a criminal offence against property.
- The operator must provide a surety for each gambling type
either by depositing funds to a special account of the Ministry or
by way of a bank guarantee. The surety deposited on the special
account of the Ministry must remain on the account of the Ministry
during the entire period for which the licence is issued. The
surety in a form of a bank guarantee must be provided for a
definite time period that must be at least one year longer than the
period for which the licence is issued. The surety is:
- CZK 5,000,000 for odds betting on animal races and for totalisator games operated at animal races;
- CZK 30,000,000 for odds betting and totalisator games whether operated in land-based form or digital form and for bingo operated in digital form; and
- CZK 50,000,000 for lotteries whether operated in land-based form or digital form and for technical games and live games operated in digital form. A bank guarantee may be issued only by a bank, savings bank or credit union, by a foreign bank with its registered office in the EU/EEA, or by a foreign bank with its registered office outside of the EU/EEA, provided such bank carries out its activity through its branch on the territory of the EU/EEA.
- The operator has not been declared bankrupt or entered liquidation within the last three years prior to licence issuance.
- The gambling operations will not contravene public order.
- The operator guarantees proper operation of its gambling activities and ensures that appropriate technical equipment is used.
2. "Gambling premises location licence" application: In its application for the gambling premises location licence, the operator shall set out the type, address and opening hours of the gambling premises, type of gambling intended for operation on such gambling premises, type, serial number(s) and the precise quantity of the game access points of the terminal device through which the game will be operated. The following documents, which cannot be older than three months at the time of submission, must be submitted with the gambling premises location licence application:
- the basic licence;
- a document proving that additional surety for land-based operations was deposited/bank guarantee provided;
- a certificate of the operational worthiness of each technical device through which the game is operated;
- a document proving the legal basis upon which the operator uses the premises intended for the gambling operations; and
- a closed-circuit TV scheme.
An applicant for the gambling premises location licence must provide additional surety either by depositing funds to a special account of the Ministry or by way of a bank guarantee. The surety deposited on the special account of the Ministry will have to remain on the account of the Ministry during the entire validity period of the gambling premises location licence. The surety in the form of a bank guarantee must be provided for a definite time period, which must be at least one year longer than the period for which the licence is issued. The surety amounts shall be as follows:
- CZK 1,000,000 for each gambling room; however, CZK 10,000,000 at the minimum and CZK 50,000,000 at the maximum for all gambling rooms of one operator; and
- CZK 10,000,000 for each casino; however, CZK 20,000,000 at the minimum and CZK 50,000,000 at the maximum for all casinos of one operator.
2.4 Are any restrictions placed upon licensees in your jurisdiction?
Licensees shall not offer any game that:
- enables participation by minors (under 18 years of age);
- does not ensure fair conditions and a fair chance to win to all gambling participants;
- contravenes moral standards or public order;
- does not enable reliable verification of the participant's age prior to commencement of the game;
- makes the chance of winning dependent, whether partly or fully, on a deposit by a subsequent player;
- does not enable a player to terminate the game at any time prior to wagering the bet;
- uses national emblems of an EU or EEA state, EU emblems or their imitations;
- allows the win or loss to be decided, whether partly or fully, by a chance or unknown circumstance which may be influenced by a player or the licensee; or
- has its outcome known in advance.
Licensees are also prohibited from providing any benefits to players in connection with a gambling operation, be it foodstuffs, drinks, tobacco products or stimulating substances.
2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.
The basic licence is issued for a maximum period of six years. It cannot be assigned to a third party. If, due to the transformation of the licensee, such licensee is dissolved, the basic licence may be assigned to the successor corporation, provided that the Ministry has pre-approved such transformation.
If the Ministry finds out that the operator ceased to comply with the Conditions (see question 2.3 above), it will call upon the operator to comply with them by a certain deadline, provided the Conditions enable such compliance and no threat of delay arises.
The Ministry shall revoke the basic licence, if:
- the operator, while called upon by the Ministry, fails to comply with the Conditions;
- facts come to light subsequently due to which the basic licence issuance would have been impossible;
- the operator breaches, repeatedly or grossly, the obligations laid down by the Gambling Act, by the Gambling Tax Act, or by the basic licence; or
- the operator ceases to comply with the Conditions and the procedure set out above (i.e. the Ministry calling upon the operator to comply with the Conditions by a certain deadline) cannot be applied.
Gambling premises location licence
The gambling premises location licence is issued for the duration of the basic licence – but for three years at the maximum. It terminates when the basic licence terminates or is revoked.
If the municipal authority finds out that the operator ceased to comply with conditions set out in the Gambling Act, it will call upon the operator to comply with such conditions by a certain deadline, provided the conditions enable such compliance and no threat of delay arises.
The municipal authority shall revoke the licence for the gambling premises location if:
- the operator breaches, repeatedly or grossly, the obligations laid down by the Gambling Act, by the Gambling Tax Act, or by the basic licence; or
- the operator ceases to comply with the conditions set out in the Gambling Act and the procedure set out above (i.e. the municipal authority calling upon the operator to comply with the conditions by a certain deadline) cannot be applied.
2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.
Player registration is required for participation in any game operated in digital form and for participation in odds betting and technical games operated in land-based form.
A game of bingo and a live game in land-based form may be operated only in a casino. A technical game in land-based form may be operated only in a gambling room or a casino.
Gambling operations are not permitted at schools and schooling facilities, leisure facilities for children and youths, social care service facilities, health-care facilities providing outpatient, day or inpatient care, on the premises serving the purposes of churches or religious societies, and at the member facilities of the integrated rescue system. Additionally, operation of odds betting and totalisator games is also not permitted at the facilities designated for public authorities.
As stated in question 2.2 above, a municipality may, based on Act No. 128/2000 Coll., on Municipalities (Municipal System), issue a generally applicable decree laying down that land-based bingo, technical games, live games or small-size tournaments may be operated only at the places and times specified by the generally applicable decree, or laying down the places and times at which operation of the above games is prohibited, or laying down that operation of such games is completely prohibited throughout the territory of the municipality.
Promotion and advertising of gambling is regulated by Act No. 40/1995 Coll., on Regulation of Advertising ("Act on Advertising"). The Act on Advertising states that it is prohibited to advertise a gambling game operated without a basic licence issued by the Ministry and that advertising of a licensed gambling game:
- must not give the impression that participation in gambling can serve as a source of income similar to income from other activities;
- must not target minors (under 18 years of age) and must include a statement that participation of minors is prohibited; and
- must include a visible and clear warning text as follows: "Ministry of Finance cautions: Participation in gambling may lead to addiction!"
In addition to the regulation by the Act on Advertising, land-based gambling premises are subject to the following promotion and advertising restrictions:
- no advertising, message or any other promotion for gambling or for winning opportunities including, without limitation, textual, audio, moving, static, light or graphic types of the foregoing may be placed on the exterior or within the publicly accessible interior of the building where the gambling premises are located;
- the gambling premises' interior cannot be visible from the outside; and
- a casino and a gambling room must be visibly designated as such.
2.7 What are the tax and other compulsory levies?
Under Act No. 187/2016 Coll., on Gambling Tax ("Gambling Tax Act"), gambling operators are subject to a special gambling tax. The gambling tax is based on gross gaming revenues ("GGR") calculated as the difference between the amount wagered (and not returned to the players) and the winnings paid out to the players. The gambling tax rate is 35% for a lottery and a technical game and 23% for all other game types.
A minimum tax in the amount of CZK 9,200 per each slot machine per calendar quarter applies to land-based technical games, even if the actual tax based on 35% of GGR is lower.
Gambling tax returns have to be filed and the gambling tax paid quarterly no later than 25 days after the last day of each calendar quarter.
If a gambling operator is subject to corporate income tax in the Czech Republic, then also such tax must be paid. The corporate income tax rate is 19% of the company's profits.
Based on Act No. 586/1992 Coll., on Income Tax ("Income Tax Act"), each player's winnings from a lottery or raffle over CZK 1,000,000 is subject to 15% income tax. Winnings from each of the other types of gambling are subject to income tax of 15% on an annual basis but only if the difference between the total winnings from the respective type of gambling and the bets or wagers placed on the respective type of gambling in the relevant year exceed CZK 1,000,000.
2.8 What are the broad social responsibility requirements?
Self-restricting measures and their types
The operator is required to offer and enable its players to either set their self-restricting measures or refuse such settings. It shall not allow any player to participate in the game if such participation violates any self-restricting measure set up by the player. If the player loosens his self-restricting measures, the operator shall execute such change not earlier than seven days thereafter. On the other hand, if the player tightens his self-restricting measures, the operator shall execute such change immediately and no later than 24 hours thereafter.
In any games operated in digital form and in technical games operated in land-based form, the operator shall enable the player to set the maximum amount of the:
- bets per day ("amount" refers to a monetary amount, not the number of bets);
- bets per calendar month ("amount" refers to a monetary amount, not the number of bets);
- net loss per day;
- net loss per calendar month;
- logins to the user account per calendar month;
- daily login time spent on the user account until it automatically logs out; and
- time during which the player will be disabled from participating in a game after logging out from his user account.
In odds betting operated in land-based form, the operator shall enable the player to set the maximum amount of the:
- bets per day;
- bets per calendar month;
- net loss per day; and
- net loss per calendar month.
In bingo and live games operated in land-based form, the operator shall enable the player to set the maximum amount of the:
- net loss per day;
- net loss per calendar month; and
- visits to the gambling premises per calendar month.
Register of individuals barred from participation in gambling
The Ministry has set up and administers a register of individuals barred from participation in gambling ("Register"). The Ministry is obliged to ensure remote access to the Register for the gambling operators. The operators are obliged to ensure that any individual entered in the Register will not be allowed to participate in any games.
The Ministry will enter in the Register any individual who:
- is in receipt of material destitution assistance benefits, except for extraordinary immediate assistance, in accordance with the law regulating assistance in material need and law regulating the living and subsistence minimum;
- is over 18 and together with the individual under letter a) is jointly evaluated in accordance with the law regulating assistance in material need and the law regulating the living and subsistence minimum;
- has been conclusively found bankrupt according to the law regulating bankruptcy and methods of its resolution;
- is prohibited from participating in gambling and betting based on an interim order issued under the criminal procedure law; or
- is subject to a reasonable restriction and obligation to abstain from gambling and betting or subject to a protective medical treatment of gambling addition as laid down by Act No. 40/2009 Coll., Criminal Code ("Criminal Code").
The Ministry will also enter into the Register an individual at his own request.
2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling?
Player registration is required for participation in any game operated in digital form and for participation in odds betting and technical games operated in land-based form. During the registration process, the operator must identify the player. Act No. 253/2008 Coll., on Measures Against Money Laundering and Terrorist Financing ("AML Act"), requires face-to-face identification of players by gambling operators (except for lottery, bingo and raffle operators). This requirement has significant practical impact for remote gambling operators. Nevertheless, the face-to-face identification of players can be replaced by using a "Bank ID" service offered by banks, provided the operator has an agreement in place with such banks (or association/JV set up by such banks).
2.10 Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?
There is no general regulation of virtual currencies in the Czech Republic and the Gambling Act does not deal with them specifically either. Nevertheless, the AML Act states that virtual currencies are not considered "money" under Act No. 370/2017 Coll., on Payment System ("Act on Payment System"). Virtual currencies cannot currently be used for gambling, given that, under the Gambling Act, the deposits, bets and winnings (save for some exemptions for lotteries and raffles) have to be of a monetary nature.
3. Online/Mobile/Digital/Electronic Media
3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?
Under the Gambling Act, each of the Relevant Products, except for "social/skill arrangements", which are not considered "gambling", may be operated in online form by operators with a registered office in the Czech Republic, another EU Member State, or a state that is a party to the Agreement on the European Economic Area.
Fantasy betting can be operated online if it meets the requirements set out in the Gambling Act for the "odds betting" game type or the requirements set out in the Gambling Act for one of the other types of gambling.
3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?
The internet server used by the operators must be located in an EU Member State, or in a state that is a party to the Agreement on the European Economic Area.
3.3 What terminal/machine-based gaming is permitted and where?
Terminal/machine-based gaming would generally fall under "technical game", which is a permitted type of gambling under the Gambling Act. Technical games include, without limitation, reel slot machines, electromechanical roulettes and electromechanical dices.
Technical games may be operated either in a gambling room (on their own) or in a casino (together with a live game). A gambling room must be closed for operation from 03:00 a.m. until 10:00 a.m. A minimum of 15 licensed game access points of a technical game shall be available for operation in a gambling room. A minimum of 30 licensed game access points of a technical game shall be available for operation in a casino. In a casino where a technical game is operated, for each additional live game table above the minimum number specified in the Gambling Act, there can be a maximum of 10 technical game licensed game access points. This restriction does not apply for a casino where gambling on at least 10 live game tables is available for operation throughout the casino's entire operating hours.
A municipality may, based on Act No. 128/2000 Coll., on Municipalities (Municipal System), issue a generally applicable decree laying down that land-based bingo, technical games, live games or small-size tournaments may be operated only at the places and times specified by the generally applicable decree, or laying down the places and times at which operation of the above games is prohibited, or laying down that operation of such games is completely prohibited throughout the territory of the municipality.
4. Enforcement and Liability
4.1 Who is liable under local law/regulation?
- Individuals and legal persons who operate gambling in contravention of the Gambling Act.
- Internet connection providers in the territory of the Czech Republic.
- Payment service providers licensed under the Act on Payment System.
- Accredited testing bodies (i.e. testing laboratories that certify gambling equipment and software used by the operators).
4.2 What form does enforcement action take in your jurisdiction?
Enforcement action can be of an administrative or criminal nature.
Administrative actions can be taken by authorities under the Gambling Act as well as various other acts. In this chapter, we address actions and sanctions that can be imposed by authorities under the Gambling Act; they are as follows:
- Revocation of a licence.
- Administrative fines of up to CZK 50,000,000.
- Injunction on the operations of the administrative offender.
- Forfeiture of an item that is owned by the administrative offender, used to commit an administrative offence, has been gained from an administrative offence, or has been acquired in exchange for an item obtained from an administrative offence.
- Confiscation of items either not fully owned by the administrative offender or owned by an offender who cannot be prosecuted for the administrative offence.
- Blocking of unauthorised online games–internet connection providers on the territory of the Czech Republic are obliged to prevent access to any of the webpages included in the list of webpages with unauthorised online games ("Blacklist"). The Blacklist is maintained and entries in it decided on and made by the Ministry. It is available on the Ministry's website and contains addresses of webpages offering unlicensed online games and, where available, details of payment accounts used for the purposes of operating unlicensed online games. Internet connection providers are obliged to prevent access to a webpage included in the Blacklist within 15 days from the publication date of the webpage in the Blacklist.
- Blocking of payments related to unauthorised online games – payment service providers are forbidden from executing payment transactions, whether credited or debited, to the payment accounts included in the Blacklist. They are obliged to comply with this prohibition within 15 days from the publication date of the payment account details in the Blacklist.
Criminal sanctions can be imposed for illegal organisation, promotion or mediation of gambling under the Criminal Code and Act. No. 418/2011 Coll., on Criminal Liability of Legal Persons ("Act on CLLP"). The criminal sanctions under the Criminal Code are imprisonment (of up to 10 years depending on the severity of breach) and a ban on operations. The criminal sanctions under the Act on CLLP are varied and include, among others, dissolution of a legal entity, forfeiture of property, a fine and ban on activity.
4.3 Do other non-national laws impact upon liability and enforcement?
The Czech Republic is a Member State of the EU. EU law is therefore applicable.
4.4 Are gambling debts enforceable in your jurisdiction?
Gambling debts owed to a licensed gambling operator are enforceable.
4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?
Administrative fines are regularly imposed by the Ministry against operators who do not comply with the Gambling Act. If not paid on time, such fines are usually enforced by tax authorities under Act No. 280/2009 Coll., the Tax Code.
Licence revocation proceedings are also used by the regulators against operators who do not comply with the most fundamental obligations of the Gambling Act, such as failure to pay out winnings/return deposits to players on time.
Criminal proceedings are primarily used against Czech natural persons who run unlicensed land-based gambling operations. To date, there is no publicly known instance of criminal proceedings having been used against remote online gambling operators.
The Ministry also maintains and publishes the Blacklist on its website. The internet connection providers prevent access to webpages included in the Blacklist and payment service providers will not execute payment transactions, whether credited or debited, to the payment accounts included in the Blacklist.
5. Anticipated Reforms
5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?
As part of the planned consolidation of public finances, the Government prepared and submitted to the Parliament a draft bill amending various acts, including the Gambling Act, Gambling Tax Act and the Income Tax Act. It is proposed that the amendments of such Acts will come into effect on 1 January 2024. For this to happen, the amendments will need to be approved in the Parliament and signed by the President first.
Some of the main changes proposed to the Gambling Act are as follows:
- The scope of the Gambling Act will be extended. Any gambling game available in the territory of the Czech Republic will be considered to be operated in the territory of the Czech Republic and its operator will thus be required to hold a Czech gambling licence, even if such game will not be in any way aimed or focused on the residents of the Czech Republic.
- The Ministry will be able to include on the Blacklist not only websites and applications through which unlicensed gambling games are being operated but also websites and applications that have the essential purpose of causing, enabling, facilitating or concealing a violation of the ban on operating unlicensed gambling games.
- Certain aspects of gambling game operations that are currently not unified in the Gambling Act but are included in game plans or individual licences will be regulated directly in the Gambling Act. These include, for example, the permitted reasons for cancellation of a player account by the operator or the currency exchange rate to be used by the operator in case the games are also offered in currencies other than CZK.
- Introduction of additional player protection mechanisms:
- A "panic button" will need to be made available to players. By using it, the player will be prevented from participating in a game for 48 hours. The operators will also need to ensure that players have the possibility to submit a request for registration in the Register via the operator.
- Prohibition of risk bonuses. Based on a draft of a decree of the Ministry, the term "risk bonus" covers: a) introductory bonuses; and b) any bonuses provided to a player after the operator received from such player a request to cancel the player's account.
It is proposed that the term "risk bonus" will also cover any bonuses that can be used in a gambling game beyond the rules of the given game, if they can be used earlier than 24 hours after acceptance by the player. A bonus that can be used in gambling is mainly money or free play.
- Changes to the licensing regime. An operator will need to obtain an "initial" licence before it will be able to obtain a "basic" licence to operate a specific type of gambling. An "initial" licence alone will not establish the possibility of operating a specific type of gambling. The granting of an "initial" licence will merely certify the fulfilment of selected conditions common to the operation of all types of gambling. It will be unlimited in time.
- Changes to the amounts of surety that need to be provided to the Ministry. The amount of surety will not depend on the type of game being operated or how many types of games are being operated. Instead, it will be determined based on the last known gambling tax of the operator. Depending on the amount of such gambling tax, the operator will be included in one of four surety groups. The surety amount in group 1 will be CZK 20,000,000. The surety amounts in groups 2, 3 and 4 will be CZK 70,000,000, CZK 150,000,000 and CZK 300,000,000, respectively.
- Permits operations of a "live dealer" casino, but only from a "studio" located in a licensed land-based casino in the Czech Republic. Nevertheless, several licensed operators will be able to operate from the same "studio" at once.
As for the Income Tax Act – it is proposed that each player's winnings from a lottery or raffle over CZK 50,000 in the relevant year will be subject to 15% income tax (currently only winnings over CZK 1,000,000 are taxed) and that winnings from each of the other types of gambling will be subject to income tax of 15% on an annual basis if the difference between the total winnings from the respective type of gambling and the bets or wagers placed on the respective type of gambling in the relevant year exceed CZK 50,000 (instead of CZK 1,000,000 as it is currently).
As for the Gambling Tax Act – it is proposed to increase the tax rate from 23% to 30% for the following types of games: odds betting; totalizator games; bingo; live games; raffles; and small-size tournaments. There is also a special 35% tax rate proposed for games operated without a licence.
Originally Published by International Comparative Legal Guide
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.