After a lot of wrangling, foreign online gambling operators are to be banned under new Czech Republic gambling laws unless they operate from within the Czech Republic.
Czech Republic gambling laws to ban unlicensed foreign operators
Gambling has always been a popular pastime in the Czech Republic. Regulation has been very difficult with some notable actions required to prevent fraud and unlicensed operators. The most recent change to the gambling laws is due to take effect on 1st January 2017. From then, online gambling operators will be banned unless they have obtained a State Gambling Licence and they are based in the Czech Republic for tax purposes.
Tax rates are currently 20% on gross wins for operators. That is on top of a Corporation tax rate of 19%. Those tax rates are some of the highest in the EU so the effect could be quite dramatic. William Hill has already announced that it will longer operate in the Czech Republic, most others are expected to follow to comply with new legislation.
Long has there been criticism of the government not taking action to prevent unlicensed gambling operators. To date, operators from foreign countries have been cashing in on the Czech gambling industry. The new law is expected to have a sweeping effect but initially it will rely upon operators being compliant. In the long-term other measures may be necessary to enforce the ban. Spain has already taken their gambling laws in this direction and it has not been easy for them.
Enforcement will be by means of blocking the IP addresses of unlicensed gambling operators. This action is seen by many Czech citizens as being a violation of freedom because it censors the internet. Update: From 1st January 2017 foreign gambling websites were blocked by the Czech Republic.
The effect of new Czech Republic gambling laws
Gambling operators who wish to continue operating in the Czech Republic will need to offer Czech versions of their websites. They will need to be placed on a .cz domain name extension. Then they will have to apply for a licence and comply with the terms of the Ministry of Finance. It is expected that many of the foreign online casinos will just withdraw from the market. Servicing players from the Czech Republic will no longer be legal.
Gambling in land based casinos and the national lottery are not affected by the new legislation. However, there is to be a clampdown on unlicensed operators.
Read more about gambling laws in other countries.
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