Czech parliament to debate higher online tax rate
Proposed increase in rate of tax could deter operators from entering regulated market next year
Online operators in the Czech market could face taxes as high as 30% of revenues with the government considering a significant amendment to draft legislation for the country’s new regulated framework.
The parliament of the Czech Republic will this week debate an amendment to the country’s flat 20% gambling tax as part of a move towards a more open regulatory system which will allow foreign online operators the market for the first time.
eGaming Review understands the Czech government is considering implementing new tax bands ahead of next year’s planned regulation which would see casino, lottery and bingo taxed at 30% of revenues and sports betting and poker taxed at 25%, with the new rates applying to both land-based and online betting.
The Czech parliament will debate the amendment this week, and if approved will be a major blow to foreign operators which had been eyeing the country since regulation was announced last year.
However, while the draft regulation opens the market up to foreign operators without a land-based presence for the first time, it is unlikely to encourage an influx of new licensed competition, with a spokesperson for Betfair having told eGR earlier this year it considered the proposed tax rate to be “too high”.
And another operator with a presence in eastern Europe this morning told eGR that it was “not interested” in applying for a Czech licence, citing the proposed tax rate as a major disincentive for operators.
Prague-based gaming lawyer Jan Rehola said that while the new Gambling Act removed a number of major obstacles for foreign operators, other hurdles remained.
“There are still some unusual responsible gambling requirements and very limited means of deposit for players,” Rehola said.
“But the current wording of the draft is much more workable for foreign operators to enter the market than the wording originally promoted by the Ministry of Finance,” he added.
The new regulation could enter into force as early as the start of next year and despite the reservations should still see an increase on the five operators currently licensed to supply fixed-odds betting, which include Fortuna and Tipsport.