Czech gambling legislation makes progress

Czech lower house has approved legislation to raise taxes on gambling firms and open the online market to foreign operators.

Reuters reports that, as of next year, tax on slot machines will increase from 28% to 35%, with verticals including sports betting and lottery remaining at 23%.

The bill still needs to be approved by the Senate.

The taxation, which is in addition to the regular 19% corporate tax rate, is designed to bring in an extra 1.5bn crowns.

The legislation is also aimed at reducing gambling addiction in the country.

It would open the Czech online market to foreign firms, while the Finance Ministry would be granted the power to shut down illegal operations.

A second bill will define stricter rules relating to the use of slot machines and video lottery terminals.

Writing in Gambling Insider last year, Dr. Richard Myslil of law firm Bubník Myslil & Partners said: "At the moment, local operators are subject to local registration and taxes, and claim that foreign operators do not pay any tax and are not validly registered for this business in the Czech Republic, and therefore have a substantial competitive advantage.

"However local authorities cannot exclude foreign operators so easily from the internet market as it has no exact borders and they cannot violate the free movement of services in the European Union.

"Up to now, no direct action by local authorities to block these 'illegal websites', other than prohibition of advertising, has been known."