Senate vote puts Czech Republic one step closer to new online gambling market

czech-republic-online-gambling-law-approvedThe Czech Republic is one step closer to licensing international online gambling operators after its new legislation passed its penultimate procedural hurdle.

On Thursday, the Czech senate approved the country’s new gambling law by a large margin – 42 votes in favor, 23 abstentions and zero ‘nay’ votes. President Miloš Zeman now has 30 days in which to affix his signature and the bill’s provisions could take effect as early as January 1, 2017.

The bill will drop the longstanding prohibition on non-Czech operators obtaining online gambling licenses, which has left the country with a mere five licensed gambling operators and the unfair trade stink-eye from the European Commission. However, while operators based in the European Union and European Economic Area will now have the opportunity to apply for local licenses, they may find the bill’s new tax plan tough to swallow.

Under the new regime, sports betting and lotteries will be taxed at 23% of gross gaming revenue, while RNG casino games will face a 35% rate. These taxes are on top of the standard 19% corporate tax rate.

To protect its new licensees from unwanted competition, the new law promises to empower the Ministry of Finance with the now standard but largely ineffective tools of blocking unauthorized gambling domains as well as the slightly more effective ban on payments to and from unauthorized operators and rules against unlawful marketing.

The new law also includes measures to minimize potential social harms, including the adoption of a national exclusion database that will allow individual gamblers to block themselves from accessing the sites, while also preventing access by bankrupt individuals or those receiving financial assistance from the state.