Czechia gambling regulation, licensing and taxation

Regulated. Local licensing.

Section 12 of the Gambling Act states that, based on a legal provision, a municipality may issue a decree that requires casino games to only operate at places and times specified by the decree or banned from certain locations or from the entire municipality.

According to the Section 68(3) of the Gambling Act, the following games are permitted to be operated in a casino:

• A live game, e.g. roulette.
  • A live game is defined as a game where “the bettors play against the croupier or each other at the live game tables, while the number of bettors and amount of bet per game are not fixed in advance.” (Section 57(1), Gambling Act). Live games include roulette, card games, card tournaments and dice games (Section 57(2), Gambling Act).
• A live game jointly with a technical game, e.g. electromechanical roulette, electromechanical dice or reel slot machines.
  • A technical game is defined as “a game operated through a technical device directly handled by the bettor.” (Section 42(1), Gambling Act)
• A live game together with bingo.
• A live game jointly with a technical game and bingo.
  • Bingo is defined as “a game in which a win is subject to achieving a predetermined formula on the betting ticket based on successive drawing of numbers and notification of this fact to the operator in a manner determined by [them], while neither the number of the bettors, nor the game receipts amount are determined in advance.” (Section 39(1), Gambling Act)

Requirements regarding the minimum number of tables and gaming machines are prescribed in Sections 68a and 68b of the Gambling Act.

Casino operators can also offer live dealer games that are organised in a studio that is located in the casino and transmitted live (Section 68c, Gambling Act). Other operators, aside from the casino operator, can organise these games in the studio (Section 68c(5), Gambling Act).

•  Ministry of Finance
• Customs Administration of the Czech Republic

General

• An “initial permit” and a “basic licence” are required (Section 85(1), Gambling Act).
• Applications are currently being accepted for both an initial permit and a basic licence.
• There isn’t a limit to the number of initial permits or basic licences in the Gambling Act.
• Section 68(1) of the Gambling Act defines casinos as: “a separate, structurally separated space in which live games are operated as the main activity.”
• The duration of the “initial permit” is not limited in the Gambling Act.
• A “basic licence” is issued for a maximum of six years (Section 100(1) and (5), Gambling Act).
• Applicants must be a legal person established in a member state of the European Union (EU) or European Economic Area (EEA) (Section 6(1)(b)(1), Gambling Act).
• Applicants must meet the financial stability requirement (Section 6(4)(a), Gambling Act), which includes having equity of at least 50m Czech Korunas (CZK) (approximately €2.06m), exceeding debts in case of negative economic results. Additionally, assets (reduced by the deposit pursuant to Section 93(1)(a)), long term receivables and long term financial assets),, should also total at least CZK50m (Section 6(4)(b), Gambling Act).
• To obtain a permit for a gaming area location, the applicant must:
• Hold a basic permit for the specific gambling type.
• Ensure the location complies with laws and municipal ordinances.
• Have no revocation of the same permit at that location in the past three years.

The issued permit details the location, authorised games, operating hours, and specific equipment. It remains valid for the duration of the basic permit, up to a maximum of three years (Section 104c, Gambling Act).

• A basic licence will not be issued if a previous basic licence was cancelled within the last three years prior to the submission of the new application (Article 100(2)(e), Gambling Act).
• An initial permit may only be granted if the applicant can prove that they are of good character and are debt-free (Section 89(2)(b-c), Gambling Act).
• A person shall be deemed to be of good character if they have not been convicted of a deliberate crime, an economic crime or a crime against property. For the purpose of proving good character, the Ministry of Finance shall request an extract from the Criminal Records Bureau. When the person is not from the Czech Republic, good character shall be proved by a similar document issued by that country of origin in addition to an extract from the Criminal Records Bureau. If the person has more than one country of origin, proof of good character must be provided from each country (Section 91, Gambling Act).
• A person who has no registered arrears is considered to be debt-free, which can be proven by a debt-free certificate and by an authority of a foreign state (Section 92, Gambling Act).
• A security deposit is required either by depositing funds into a special account of the Ministry of Finance or by means of a bank guarantee that’s accepted by the ministry (Section 93(1), Gambling Act). The amount of the deposit, which ranges between CZK20m (approximately €828,410) and CZK300m (approximately €12.4m), depends on the amount of the gambling tax, which is detailed in Article 95 of the Gambling Act. 

Costs

• The application fee for a basic licence amounts to CZK5,000 (approximately €206) (Part I of the Appendix, Item 21, Act on Administrative Fees).
• The application fee for a premise licence amounts to CZK4,000 (approximately €165) (Part I of the Appendix, Item 21(c), Act on Administrative Fees).

To the best of Vixio’s knowledge, the Act on Administrative Fees does not stipulate a fee for the issuance of an “initial permit”.

Section 101 of the Gambling Actbreaks down which documents are required to be submitted along with applications for a “basic licence”. 

Part V, Title I of the Gambling Act details the licensing procedure for operators.

The gambling tax rates are:

• 35 percent of gross gaming revenue (GGR) for technical games.
• 30 percent of GGR for live games. 

(Sections 3 and 4, as well as the Annex on Rates of Gambling Sub-Taxes, Gambling Tax Act).

Players’ winnings are subject to personal income tax (Sections 3(1)(e) and 10(1)(h), Income Tax Act). Section 10(3)(b) of the Income Tax Actstipulates that profits (winnings minus deposits) from gambling that do not exceed CZK50,000 (approximately €2,068) in the tax period are exempt from income tax. Section 16(1) of the Income Tax Act provides the tax rate and the calculation for tax base for personal tax income, while specifying the tax rate as:

• 15 percent for the part of the tax base up to 36 times the average wage.
• 23 percent for the part of the tax base exceeding 36 times the average wage.