Czech Republic Passes Restrictive Online Gaming Laws
The Czech Republic is the latest country to approve regulated online gaming after the country's president, Miloš Zeman, signed a variety of laws in June with Jan. 1, 2017, being the expected launch date of the new online gaming regime.
Gaming legislation hit the radar in the Czech Republic in 2014 when the country's finance minister, Andrej Babiš, introduced proposals for the stated purpose of raising taxes on online gaming in hopes that it would curb the social harms he believed this activity created for its 10.5 million residents. Those residents are believed to currently wager online $6 billion per year.
The proposals included a very high 40-percent tax rate of gross gaming revenue (GGR), which led many to believe that it would do little to allow licensed online gaming operators to offer games competitive with those already available on the gray-area market.
The bills that President Zeman signed into laws after being unanimously passed by the country's Senate by a 42-0 vote, include lower, yet still restrictive, tax rates of 35 percent on GGR from casino games containing a random number generator, which is believed to include online poker and a 23-percent tax rate on GGR from sports wagering and lotteries. To make matters worse, this is all on top of the country's 19-percent corporate tax rate.
The situation is even more unattractive to online poker operators and its Czech customers. According to Online Poker Report, online poker bets can't exceed 1,000 Czech Koruna ($40.98), and winnings in any specific game or tournament are capped out at 50,000 Czech Koruna ($2,049).
While shared liquidity with international gaming pools will be allowed, gaming operators would be required to restrict games that exceed these limits.
Poker players looking to still play on the gray-area market after the new gaming regime is enforced will likely have a tougher time doing so since the new laws contain provisions to create a blacklist of non-licensed providers along with the potential of prohibiting certain payment processing transactions. However, such restrictions have proved problematic in other countries with similar laws since players can skirt IP blocking with the use of virtual private networks and can get around banking restrictions with sites that allow transactions via e-wallets and/or bitcoin.
To help educate vested parties, the country's Ministry of Finance will be hosting a variety of workshops in July and August covering topics including taxation and permitted games.
The primary focus of the workshops is for online gaming providers, however, other third parties are also allowed to attend including software providers and legal firms.
Stay tuned at PokerNews as more develops in the Czech gaming marketplace.
*Image courtesy of Adam Jones/Wikimedia.org.