Informally known as Czechia, the Czech Republic is a landlocked European country that covers the historical regions of Moravia, Bohemia, and Czech Silesia. The country was part of the Republics of the Soviet Union (USSR) until 1989 when it returned to a liberal democratic regime. Today, the Czech Republic boasts membership in the EU and a thriving economy whose healthy performance is mostly driven by the manufacturing, services, and agriculture sectors.
The country had several forms of legal gambling during its communist period, including government-controlled horse and sports wagering, lotteries, and scratchcards. Legal slot machines and casino gambling arrived in the Czech Republic at the end of the USSR era. Remote lotteries and online sports wagering became legal in 2012, but it was not until 2016 that the country legalized other forms of online gaming.
Gambling is a common recreational activity among Czech residents, which is unsurprising considering the country had 299 brick-and-mortar casinos as of 2017. Estimates also suggest Czechia ranks second on a global scale in terms of slot machine number per capita. This is hardly shocking since the country is one of the largest slot machine manufacturers in Europe.
The local gambling industry has witnessed consistent growth over the past decade, with casino gaming revenue increasing from €136 million in 2010 to €240 million in 2017. Czech players can legally enjoy various forms of casino gambling, including slots, roulette, baccarat, and blackjack. Poker is also huge on Czech soil, so much so that the capital Prague was chosen as a stop for the PokerStars EPT tournament series.
Czech gambling regulators have introduced various changes over the last few years, including a registry of excluded persons and higher tax rates. Stick with us as we explore the Czech gambling legislation in further detail.
Laws That Govern the Czech Gambling Industry
The only legal forms of gambling during Czechia’s communist period were state-owned lotteries, scratchcards, and the totalizator. The landscape changed with the passage of Act № 202/1990 Coll. on Lotteries and Other Similar Games, which legalized brick-and-mortar casino gambling in the country. Over two decades later, in 2012, local lawmakers amended the legislation to allow for remote sports wagering and online lotteries.
The Czech Gambling Act of 2016
Licensing Requirements
The Czech Gambling Act of 2016
However, it was not until 2016 that other forms of online gambling became legal in the Czech Republic. The main piece of legislation that currently governs landbased and remote gambling in the country is Act № 186/2016 Coll., also known as the Czech Gambling Act. The law provides a legal definition of gambling, describing it as any game, betting activity, or lottery where participants must stake money and where the outcome is fully or partly based on chance.
Players’ profits from winning wagers should be monetary in most cases, with few exceptions. Examples include the so-called supplemental and immediate (instant-win) lotteries where winners can receive prizes of material nature. Act № 186/2016 governs the following types of gaming and betting activities – bingo, raffles, lotteries, tote wagering, smaller tournaments, casino games, and slot machines. Social games and loot boxes still go unregulated in the country.
Licensing Requirements
All legal forms of gaming are available in both terrestrial and online format. Online operators require licenses from the Czech Ministry of Finance which regulates remote gambling businesses. Landbased firms must receive authorization from the Ministry, the Customs Office, and the authorities of the municipalities they want to operate in. Respectively, the municipalities must issue additional premise location licenses to such applicants.
The basic online license covers all allowed forms of gambling bar smaller tournaments and raffles. Each interested company must pay a Kč5,000 fee upon submitting its application. The Czech Republic does not implement a single-license regime as is the case in Colombia, for example. Instead, each permitted gambling activity type requires an individual permit.
For instance, if a company seeks to provide fixed-odds betting, video gaming terminals, and live games, it will have to apply for three individual basic licenses. Raffles and small tournaments are the only exceptions as they only require formal notifications to the authorities of the municipalities where they take place.
License applicants must provide proof to the Ministry of Finance they have no criminal records and no debts. Online operators must also present documents to verify their servers’ location. Another condition license applicants must satisfy is to have registered offices in the country or another member state of the European Union (EU).
The minimum equity requirement they must meet is €2 million and the origin of the funds should be fully clear. Some of the requirements have to do with the personnel. The applying company should employ a minimum of five staff members with experience of three years or more in the industry.
In the context of landbased gambling, this means a person should have been a professional dealer for at least three years to operate table games like roulette or blackjack. Applicants must deposit a financial surety at a bank account designated by the Ministry of Finance. The size varies based on the type of gambling activity.
For example, the guarantee for horse and greyhound race betting is Kč5 million, while that for landbased lotteries is Kč50 million. The minimum surety requirements per landbased card room and casino stand at Kč1 million and Kč10 million, respectively. Applicants who have declared insolvency within the last three years cannot obtain operating permits.
Basic gambling licenses have a maximum validity of 6 years. In the event of an acquisition, the successor company should gain the Ministry of Finance’s approval beforehand. In cases of violations of the licensing conditions, the licensees shall have their permits suspended or revoked by the Czech gambling regulator.
Social Responsibility Policies in the Czech Republic
The Czech gambling watchdog is very strict when it comes to compliance with its social responsibility requirements. Under local regulations, gambling operators can offer their products only to customers aged 18 years old or above, as this is the age of majority in the country.
In the context of online gambling, all players must register accounts and provide the licensees with identification documents that confirm they are legally old enough to gamble. Part IV, Title I, Article 77 of Act № 186/2016 stipulates that all online players must set self-restrictive measures when they register.
Responsible Gambling Measures
The Excluded Persons Register
Policies for Landbased Operators
Responsible Gambling Measures
The self-restrictive measures in question include daily and monthly limits on deposits, net losses, and wagers. Czech players can also determine the number of logins to their accounts within each calendar month. Customers have the option to increase their limits but the changes will come into effect no sooner than one week after the request.
The opposite applies if a player wishes to decrease their limits, in which case the changes take place either instantly or no later than 24 hours after the request. Another option Czech players face is restricting the amount of time they spend logged into their accounts. Locals who play in brick-and-mortar casinos can set limits on the number of visits they pay to the respective gambling premises each month.
The Excluded Persons Register
The Czech Ministry of Finance maintains a register of persons excluded from gambling participation, which is available to both operators and the public. The Ministry piloted the exclusion registry in September 2020 after an amendment to Act № 186/2016. The regulator gave licensed operators a deadline until December of the same year to ensure all persons who have entered have no access to wagering.
Self-exclusion aside, the Ministry itself has the remit to add individuals to the registry. People who receive destitution or welfare benefits from the government generally cannot participate in gambling activities for obvious reasons. The only exception is for those who require extraordinary and immediate financial assistance. Gambling is also off-limits to residents who have declared bankruptcy.
In line with Act № 40/2009, residents who are subject to gambling addiction treatment also end up on the registry even if they have not requested exclusion themselves. Of course, people who feel their betting has become problematic can always request an entry even if they are not undergoing addiction treatment.
Policies for Landbased Operators
Czech law expressly prohibits gambling in schools, churches, leisure centers intended for minors, and health-care facilities for outpatients and inpatients. Licensed brick-and-mortar operators cannot provide any benefits to their patrons in connection with gambling. You have probably heard that casinos in many countries worldwide treat customers to free drinks.
Well, Czech gambling establishments are an exception since local regulations prohibit them from offering food, beverages, or tobacco products to their patrons. Some time ago, speculations emerged that Czech authorities were considering prohibiting locally licensed gambling sites from offering promotions to Czech players.
The main argument was that such incentives could cause gambling-related harm to locals by inducing them to play more. It appears regulators have abandoned this idea since. After checking several Czech-licensed websites like Sazka, Fortuna, and Synot Tip, we established that all of them offer bonuses to players from the country, with detailed terms and conditions in the Czech language.
Gambling Advertising Requirements in the Czech Republic
The marketing of gambling activities falls under the scope of Act № 40/1995 on the Regulation of Advertising. Its provisions prohibit the advertising of unauthorized gambling products that lack operating permits granted from the Ministry of Finance. Licensed operators can market their services, but with some restrictions. Ads must not leave people with the impression they can use betting as a source of income, for example.
Respectively, marketing materials should not target or appeal to underage individuals and must caution the audience that minors cannot partake in such activities. Each ad must contain a warning stating that frequent and irresponsible betting may lead to gambling addiction. Similar restrictions are in place for landbased gambling operators.
The Advertising Act disallows promotional messages and materials on the exterior of brick-and-mortar gaming venues. Meanwhile, the interior of the betting premises should not be visible to passersby from the outside. All casinos, card rooms, and betting shops should be clearly designated as such.
Sanctions for Violating Act № 186/2016
Some offshore operators service Czech players without basic licenses issued by the Ministry of Finance. The regulatory watchdog strives to impede such businesses by maintaining a blacklist of unauthorized gambling sites. Czech internet service providers (ISPs) have received instructions to restrict the access to unlicensed operators.
ISPs who fail to comply also risk being sanctioned by the local authorities. The same applies to local payment service providers who must block the financial transactions to and from the blacklisted gambling sites. Local companies that contravene the provisions of Act № 186/2016 risk various penalties, including license suspension/revocation, gambling equipment confiscation, and administrative fines reaching Kč50 million.
The heaviest sanction violators face is imprisonment for a maximum of ten years, depending on the severity of their contravention. Such criminal sanctions are enforced under the provisions of the Czech Criminal Code (Article 252) and Act № 418/2011 on the Criminal Liability of Legal Entities and the Proceedings Against Them. Last but not least, we should warn players that gambling debts are enforceable under Czech law, but only on condition the debtors owe money to authorized gambling businesses.
Conclusion
As you can see, the Czech Republic is very strict when it comes to gambling regulation enforcement. The harsher regulatory climate in the country and the relatively high taxes on certain betting activities have caused large gambling operators like William Hill to exit the Czech market.
Despite the tough regulations, gambling remains a widespread form of entertainment in the country. Due to the limited number of locally licensed online operators, many Czechs take their action to offshore betting sites and are generally not prosecuted for doing so.
Responsible Gambling Measures
The self-restrictive measures in question include daily and monthly limits on deposits, net losses, and wagers. Czech players can also determine the number of logins to their accounts within each calendar month. Customers have the option to increase their limits but the changes will come into effect no sooner than one week after the request.
The opposite applies if a player wishes to decrease their limits, in which case the changes take place either instantly or no later than 24 hours after the request. Another option Czech players face is restricting the amount of time they spend logged into their accounts. Locals who play in brick-and-mortar casinos can set limits on the number of visits they pay to the respective gambling premises each month.