Czech Industry Satisfied After Dust Settles On Reforms

March 27, 2024
Czech gambling stakeholders have said they are tentatively satisfied with a series of sweeping changes to gambling regulations that unlocked live dealer games and offshore enforcement.

Czech gambling stakeholders have said they are tentatively satisfied with a series of sweeping changes to gambling regulations that unlocked live dealer games and offshore enforcement.

Amendments to Czech gambling law approved last year, and that came into effect from January 1, delivered a grab-bag of alterations to the rules around gambling.

Their varied nature can be put down to being just one element in a massive set of legislation changes enacted by the government last year, which altered 65 different laws and was largely aimed at filling holes in government finances.

Headlining the changes was a spike in tax rates, with the sports-betting rate rising to 30 percent for gross gambling revenue (GGR), while so-called “technical games”, the local name for online casino products, remained at 35 percent.

Speaking at the Prague Gaming & TECH Summit on Tuesday (March 26), representatives from the Czech gambling market begrudgingly accepted that tax rates were bound to rise in the face of a public funding crisis, but appeared content with the concessions awarded to the industry in return.

“This should be a positive change,” said Petr Kozák, the head of local trade group IFGR.

In particular, he was hopeful that new powers for the regulator to target the black market will bolster licensed operators.

Under the previous regime, a complex set of criteria had to be fulfilled before officials could take any action against offshore gambling companies, which IFGR believes make up around 50 percent of the online market.

“Now the ministry came with a change in the act which is to switch from the criterion of targeting to the criterion of accessibility,” Kozák said, meaning that any operator without a licence that accepts gambling cash from Czech residents is a target for enforcement.

For the first time, under the new amendments, companies that advertise illegal gambling can also be punished.

“When there is a site that has the promotion or some kind of advertising of gambling sites that don’t have a licence in the Czech Republic they should be blocked to,” Kozák said.

“The change is quite positive and we’ll see what the impact will be. We can’t say now, we will see after one year,” he said.

Nerves from the industry around how officials will interpret new regulations is understandable in the Czech Republic.

A number of high-profile applications for Czech online gambling licences notoriously stepped away from joining the market in the past five years after complaining of numerous delays and complex requests from the regulator.

Despite this year’s moves to streamline and bolster Czech gambling regulations, sources say new applications have so far largely failed to materialise.

Anyone hoping to join the market in the medium term is also likely to face delays, the experts said, because of changes to technical standards for online slots, which were among the wave of new rules introduced this year.

Jakub Kolomicenko, a senior compliance officer at operator Kaizen Gaming, explained that the specifics of Czech bureaucracy would likely lead to a regulatory backlog.

“It’s not like other jurisdictions. For us it’s basically a whole new game [when you change the bet limits] so providers need to re-certify,” he said.

Kolomicenko estimated that for Kaizen’s roughly 1,000 games on the Czech market it needed to submit as many as 3,000 pages of documentation, “which someone has to read”.

“The ministry, the regulator hope they should do things on time. We’ll see,” he said.

The addition of live dealer games to the market was also welcomed, even if it comes with certain caveats.

Live dealer studios must be based inside existing Czech land-based casinos, for example.

“We call it a Czech way of doing live dealer, because it’s not so easy,” said Kozák, noting that nearby Croatia had tried a similar approach with mixed results.

For now, he said, the need for suppliers and operators to link up with physical casinos has delayed rollout of the new vertical, as negotiations continue on commercial terms.

Live casino products would not be live at any operator until the second half of this year, Kozák predicted.

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