The Ministry of Finance of the Czech Republic has notified national media of its intent “to implement tax changes on gambling”.
The notice was declared by Czech Finance Minister Zbyněk Stanjura, who is currently drafting new measures for the national budget in which the Civic Democratic (ODS) government has “emphasised delivering savings of Kč 70bn (€3bn).”
The savings target is required as the Treasury seeks to maintain the Czech Rep’s national deficit at Kč 295bn (€12.6m), to avoid debt-to-GDP reaching its highest record of +46% in the CEE nation’s history.
Czech Gambling is reported to contribute Kč 9bn (€390m) per year to the state budget. Though unspecified by Stanjura, the finance minister believes that tax changes could see Gambling contribute an extra Kč 1bn to state funds.
In 2020, following three years of deliberation, the Czech ANO (Citizens) government approved for the Treasury to enforce a new 23-to-35% tiered GGR tax charge be implemented across all licensed products allowed under the Czech Gambling Act (lottery, sports betting, totaliser games, bingo, live gaming, slot machines and raffles).
Prior to the decision, foreign operators such as William Hill and GVC Holdings (formerly Entain Plc) had departed the market stating that tax terms were unviable for the market.
Of consequence, Czech Gambling has come under the control of the domestic duo of Fortuna Entertinament and TipSport, maintaining the majority of market share for sports betting and gambling, alongside SAZKA as the operators of the Czech National Lottery.
Stanjura noted that the Treasury would listen to any proposition on savings, in which his budget will aim to prioritise reducing expenses over implementing taxes on income.
A tax hike on gambling is preferred by the Ministry, which will avoid adopting new taxes on consumer goods such as implementing a consumption charge on wine – an approach implemented by other EU member states