SBC News Voice of the Sports Betting Industry
The government of the Czech Republic has been urged to clarify its figures related to the exposure of national consumers to black market gambling activities.
This demand is led by the trade group and policy reformists, the Institute for the Regulation of Gambling (IPRH), who highlight glaring discrepancies in gambling-related data published by the Czech government.
The IPRH has questioned the latest figures provided by CELNI SPRAVA, the General Directorate of Customs responsible for monitoring Czech gambling activities.
The customs agency stands by its assessment that illegal gambling represents “5% of total wagering volume,” reported to be CZK 54bn (€2.1bn) in 2022.
However, the IPRH questions how Czech Customs could arrive at such a low figure, as the agency battles to shut down illegal gambling venues. Over the past six years, the Customs Administration has uncovered almost 1,300 illegal brick-and-mortar casinos.
Additionally, market data reveals that the number of legal Czech gambling establishments has decreased to 707 as of last year.
Through an independent assessment, the IPRH believes that Czech gambling has a minimum 30% exposure to illegal gambling activities, with the figure likely increasing as Czech consumers migrate to online websites.
As noted by Jan Řehola, Founder and Director of the IPRH, illegal land-based gambling activities have cost the Czech state “losses of up to CZK 2.1bn (€85m) annually through them alone.”
Discrepancies are further highlighted in how the Customs Agency gathers data on the percentage of exposure to illegal online gambling activities, as customs officials only focus on sites in the Czech language.
In 2017, the Czech government introduced a revised gambling regime that imposed a new tax structure: a 23% tax on gross gaming revenue for sports betting and lotteries, and a 35% tax for slots and casino games—these gambling tax charges were applied in addition to the standard corporate tax rate of 19%.
The new gambling regime also brought in requirements under the Czech AML Act, mandating that consumers complete in-person customer verifications at 7,500 authorised check-point venues to participate in online gambling.
The stringent 2017 reforms caused a significant exit of international operators from the Czech online market, which, by 2023, is now home to 11 operators, only three of which are foreign-licensed.
Řehola noted the exposure of Czech consumers, citing a recent survey by the Poker and Odds Players Association, which showed that up to 40% of participants play with illegal online operators, often unconsciously.
The IPRH calls for wider gambling reforms as Czech consumers increasingly migrate to online platforms. Řehola explained: “From 2021, the share of tax collection from online games will exceed revenue from brick-and-mortar establishments. The obligation to verify whether the player is of legal age and not entered in the register also applies to operators of online gaming, casinos, or betting offices.”
Efforts to block illegal online gambling sites have proven challenging, as operators frequently circumvent these measures by using mirror sites. These mirror sites, which are copies of the original sites but with different domain addresses, allow illegal gambling activities to continue unabated despite enforcement efforts.
The IPRH has called on the government to collaborate on reforms, with its members supporting the launch of a new national self-exclusion register to protect vulnerable individuals from gambling addiction. The trade body highlighted the success of the collaborative scheme, which has seen 202,000 Czech citizens register for self-exclusion from gambling since its launch in 2017.
