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The Czech Republic Addresses Gambling Legislation

President MiloŇ° Zeman of the Czech Republic reportedly signed a significant gambling legislation packagerecently. The law creates a new legal framework for the operation of online gambling sites in the eastern European nation. It may provide model legislation for many other jurisdictions interested in regulating online gambling and casino websites more effectively.

President Zeman added his signature to the bill on June 10, 2016. The legislation received extensive media coverage. It holds significance for gambling site operators, revenue collectors, problem gamblers and unlicensed online casino operators.

Provisions Impacting The Gambling Industry

The legislation approved earlier this month will not take effect until January 1, 2017. However, at that point, the bill will make some sweeping changes likely to impact online casinos, lotteries and gambling enterprises conducting business within the Czech Republic or with Czech citizens.

The law permits iGaming firms to offer their services and gaming products within the Czech Republic if the companies maintain their home in either the European Economic Area or the European Union. One anticipated impact of the new legislation will involve increasing international participation in the Czech Republic’s gaming industry, especially from European-based firms.

Public debate surrounding the gambling legislation attracted significant media interest during the months and weeks leading up to the vote on the bill in the Senate. Already, some five online casino marketers falling within the guidelines have applied for licensure and received permission to conduct business operations within the Czech Republic.

Generating Significant Additional Revenue

Taxing authorities in the Czech Republic will likely notice the effects of the new gambling legislation very rapidly during 2017. Some experts believe the new bill will boost the nation’s tax revenues by some $83.4 million. It promises to offer assistance to Czech taxpayers by providing a stream of revenue.

Although Czech lawmakers eventually modified a provision in the original version of the legislation that would have imposed a high tax rate of up to 40% on some newly licensed online casino operators, the final version of the bill signed into law by President Zeman does still contain some hefty tax provisions. It imposes a 35% tax on casino games played via the Internet that come within the scope of the bill.

Additionally, people engaging in sports betting and lotteries can expect to pay a 23% tax. These tax payments occur on top of the ongoing 19% tax rate imposed on companies conducting business in the Czech Republic.

New Provisions Affecting Gambling Addicts

The new legislative framework established by the Czech Republic promises to impact individual gamblers, also. Legislators expressed concern about the way that gambling and lotteries in the nation might impact people with gambling addictions.

As a consumer protection measure, the final version of the bill allows individuals to “opt out” of patronizing online casinos by blocking themselves online from receiving permission to gamble. Czechs may submit their names for inclusion in a national exclusion database. The new framework may make the Czech Republic a model for other nations concerned about problem gambling.

Restricting Unlicensed Casino Operators

After the new legislative framework takes effect in 2017, unlicensed casino operators in the Czech Republic will facea series of new sanctions. The law confers authority upon the Czech Ministry of Finance to take steps to close down unlicensed gambling operations in the Czech Republic.

For instance, the Ministry of Finance has obtained the authority to block websites maintained by unlicensed casinos. Additionally, the bill specifically prohibits the transmission of any payments between Czech citizens and unlicensed casino websites.

Hacking Attacks

The gambling legislation generated extensive public debate in the news media within the Czech Republic, but eventually passed the Czech Senate by an impressive 42-0 margin. Its passage reportedly displeased some online visitors.

For instance, early in June, 2016 someone claiming affiliation with the information-stealing group Anonymous” reportedly conducted a number of online attacks against websites maintained by the government of the Czech Republic. A Czech news website called Novinky.cz issued a claim shortly after the passage of the legislation that the Czech Senate’s website had sustained a distributed denial of service attack in retaliation for its vote approving the new gambling legislation. The Czech Interior Ministry dismissed the hacking as “unsuccessful“.