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May 14, 2020

Gambling in the Czech Republic: Is Stricter Regulation on the Way?

It’s been a bit of a bumpy road for online gamblers in the Czech Republic, with legislation changing the country’s iGaming landscape over the last several years. And more changes are yet to come, with Czech finance minister Alena Schillerová vowing to establish an exclusion register for players officially deemed at risk of developing financial problems from gambling. Could this herald even stricter regulation of the market, beyond the measures already in place?

Before getting into that, it’s worth having a quick recap of what’s been happening in the Czech Republic so far. Until relatively recently, the nation had a hopelessly outdated regulatory framework for gambling, with laws still in place from the dim and distant year of 1990, when the fledgling Internet was still the niche preserve of techies. 

Unsurprisingly, politicians and businesses in the Czech Republic were frustrated by this cobweb-strewn legislation, which was ill-fitted for the fast-evolving technologies and playing habits of 21st Century players. In particular, there was a need to tackle disreputable gambling sites, grant licenses for international operators, properly tax the lucrative revenue streams flowing out from Czech users, and – very importantly – protect gamblers from falling into addiction or spending beyond their means.

After much legal wrangling – and a complicated dispute with the European Commission about the Czech government’s initial insistence that online operators must have a legal, physical presence within the country – sweeping changes were eventually approved by the Czech president back in summer 2016. This new legislation, which came into effect at the start of 2017, officially opened the Czech Republic’s online gambling market up to offshore operators, while also introducing tighter licensing protocols and a rather steep tax rate for online casino sites.

Impending Regulation

Making good on the new laws, the government then demanded that Internet service providers had to block all unauthorized gambling sites – those not licensed by the Ministry of Finance – from operating within the Czech Republic. The measure was controversial but rapidly confirmed as completely constitutional in court. In the months that followed, the Ministry of Finances continued to add to the regulations, bringing in maximum loss limits and placing restrictions on bonus offers.

A particularly significant measure is the creation of the official exclusion register, which the finance minister, Alena Schillerová, said would come into existence in summer 2020. The pledge was made in a speech at a national gambling conference in November 2019 – well before the earth-shaking advent of the coronavirus pandemic. The ominous era of Covid-19 has thrown almost everything into uncertainty across the globe, so it’s unclear whether the Czech government is still on track to establish the register within that timeframe.

Either way, the concept of the register confirms how seriously the politicians are taking the regulation of gambling in the Czech Republic. The important thing to bear in mind is that this register isn’t just about self-exclusion – i.e., players voluntarily opting to lock themselves out of gambling sites to curb addictive behavior or control their spending. It will also ban people from using iGaming sites if they have been treated for problem gambling, have been declared bankrupt, or happen to be on welfare.

During her speech about the register, the finance minister hailed the effectiveness of the new regulatory powers, reflecting on how it “opened up the market to foreign operators, which allowed their regulation and proper taxation,” while at the same time formalizing “mandatory registration of all online gambling players” and curbing the black market.

Just the beginning?

She backed the claims up with convincing statistics, mentioning that over 90% of unlicensed online gambling in the Czech Republic has been stopped, with 121 websites blocked and massive fines imposed on unlicensed operators. Tellingly, though, she also emphasized that the government is not resting on its laurels, and will be “responding to new trends” in the industry. It implies new regulatory powers may well be pushed through in the years to come.

Such measures would perhaps be inevitable, as the iGaming market in the Czech Republic is still finding its feet in the wake of the new laws coming into effect in 2017. Foreign companies are slowly making headway in the new regulatory environment, and the popularity of both online casino table games and slots is sure to increase. The appeal of slots, in particular, can’t be underestimated – according to this slot guide page, online slot machines are by far the most popular casino game in the UK.

Indeed, the country’s drug policy coordinator, Jarmila Vedralová, voiced her concern at that same conference. In her speech, she warned that “the proportion of online players among pathological players is increasing, and online sports betting is the biggest problem.” She singled out young men as being especially at risk of developing problematic, compulsive gambling habits online.

She did reassure any nervous online operators who may have been listening that “It is not a matter of deleting new technologies from life, but it is important to find a balance in their use.” 

This kind of language, together with the determination to roll out the exclusion register, means that iGaming users in the Czech Republic, as well as the operators themselves, would probably do well to prepare for new regulations – especially if the coronavirus pandemic lockdown measures last longer than anticipated and concern grows about bored people at home spending more time and money on gambling sites.

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