Czech Republic: The New Gaming Law in the Czech Republic.

Czech Republic

The New Gaming Law in the Czech Republic.

Legislation governing gaming, gambling and lotteries in the Czech Republic is currently concentrated in the Act No. 202/1990 Coll., on lotteries and other similar games. Despite several significant amendments thereof, the 25 years old law has been no longer able to respond adequately to the rapid developments of said subject area of business triggered by the proliferation of the ubiquitously accessible Internet services and powerful web-oriented technologies. The Ministry of Finance therefore decided to prepare a conceptually new regulation of this legal area of entertainment.

New legislation consists of three separate laws, namely the Gaming Act, Gaming Tax Act and the so-called Amendment Act, which promotes the newly adopted regulation into other related prescriptions. The whole body of laws has been recently delivered to the Legislative Council of the Government to assess and issue their opinion, thereafter it shall be discussed by the Government and afterwards discussed in the Czech Parliament.

Besides the above mentioned response to the modern ways and channels of gaming, the proposed regulation aims to improve the protection of individuals against the negative phenomena associated with gaming and gambling and to reduce the so-called collateral social costs. Last but not least the intention of the state is to increase the collections from said businesses for public budgets.

The proposed regulation contains a number of measures protecting gamers and gamblers from the harmful effects of gaming. These measures include the obligation of the gaming operator to allow each gamer to set a maximum betting limits and losses. When these limits are met, the operator is obliged to prohibit the gamer from further participation in the game. New regulation also restricts the advertising on gaming.

A key innovation of the proposed regulation is to control gaming over the Internet, which is currently yet not addressed. However, the regulation tries to reach this goal by not only legally, but also technically controversial measure of enforced blocking of the illegal online gaming websites.

Proposed Gaming Tax Act establishes a completely new business area specific tax. So far gaming operators pay only common taxes. Under new legislation, the rates of gaming tax are set accordingly to the type of the game and should be very high. If the proposed tax rates are approved, the taxation of gaming in the Czech Republic will be one of the highest in whole Europe.

Since the Czech Republic certainly needs a modern regulation of respective business area, the principles of the proposed gaming regulation may be welcomed in general. However, the proposed regulation contains numerous problematic provisions, which definitely need to be further elaborated. After the body of acts is finely adjusted and approved, the Czech Republic should rank among the countries with high quality and contemporarily adequate regulation of gaming.