Tottenham Report: Analysis of gambling regulations in the Czech Republic

Tottenham Report: Analysis of gambling regulations in the Czech Republic

  • Anna Všetečková
October 28, 2021 2:00 AM
  • Anna Všetečková

Nearly five years after Czech Act No. 186/2016 Coll. on gambling games (“Gambling Act” or “GA”) went into effect, the Ministry of Finances has prepared an analysis of the country’s gambling regulations, known as the ARHA Report. The aim of the report was to carry out a comprehensive review and evaluation of the country’s gambling legislation in terms of its goals and principles and to identify potential recommendations for its future development. The ARHA Report was approved by the Czech government in September.  

Both the gambling operators and state authorities cooperated in the preparation of the report. As expected, the operators proposed simplifying the GA and softening some regulations that have appeared to be ineffective in practice. Furthermore, they requested clarification of some provisions that have been implemented extensively in practice by the state authorities, including CCTV in casinos.  

Also not surprisingly, the authorities proposed tightening some of the regulations.  

According to the Ministry, the main takeaway from the ARHA Report is that gambling regulation in the Czech Republic is not only fully functional, but also fulfills its purpose, including protection of players. The Ministry has further determined that keeping the regulation as it currently stands is preferable to fundamental changes, unless absolutely necessary. This is a positive message for the operators, as it signals that the Ministry of Finances will probably refrain from significantly tightening the regulatory regime in the CZ, which has gone through major changes since the adoption of the Gambling Act and resulted in many costs for the operators.   

The current trend in the Czech gambling industry is the shift from land-based casinos and gambling rooms to online gambling. This has been caused not only by technological progress and the general movement of sales and services to the internet, but also the COVID-19 pandemic. The share of online games across the CZ market has increased dramatically, from 10% in 2017 to 45% in 2020, whereas the major expansion can be seen in the area of odds betting. This may lead to increased attention from the regulator on online operators and the implementation of further regulations in this area. If it does, Parliament might also aim to revise gambling taxes.  

Regardless of this trend, the Ministry of Finances devoted part of the ARHA Report to the prevention of the establishment of “quasi-casinos”. The GA doesn’t define quasi-casinos specifically; however, the MoF sees them as casinos, though taking into account the number of slots and live table games on the premises and their ratio, they are, in fact, gambling rooms, but are licensed and enjoy the advantages of casinos (such as extended operating hours and maximum bet/win amounts).  

The MoF believes that the current wording of the GA does not properly regulate the quasi-casinos. For this reason, they included some regulation scenarios within the ARHA Report, e.g., extension of opening hours of gambling rooms (which has been denied by the Drug Policy Department established under the Czech government), determination of the minimum number of employees who have to be present in the casino, and/or obligatory certification of dealers. Undoubtedly, these changes would bring mostly negative consequences and further costs to operators of classic casinos.  

The other significant part of ARHA was devoted to the protection of players and prevention of gambling addiction. According to the MoF, the register of players excluded from participation in gambling (“RVO”) introduced at the end of 2020 contains details on more than 200,000 people at the moment. However, any player who believes that gambling is a problem and wants to register for the RVO must undergo a complicated process that includes preparing a request on an official form, with the player’s certified signature, which must be sent to the MoF directly (not through the gambling operator). This process is so complicated that players with incipient gambling addiction usually do not step forward to exclude themselves from gambling through the RVO.  

In the end, the ARHA Report foreshadows further changes to the Gambling Act. Although the essential message of the report is that existing regulation is sufficient, partial deficiencies of the Act must and will be resolved.  

That said, the general elections that took place this weekend might result in a change of management in the Ministry of Finances in the following months, which may also shift its view of gambling regulation and the necessity of amending it. 

Anna Všetečková is graduate of the Faculty of Law at Charles University in Prague, where she also attended postgraduate (JUDr.) programme in the area of administrative law; her thesis was on the operation of onlinegambling games in the Czech RepublicShe has been working with the Becker & Poliakoff law office in Prague since 2016; starting in 2018, she held the position of associate and 2021 was promoted to attorney-at-law. In her practice, Anna focuses on gambling, AML, and dataprotection law. She has assisted with licensing and regulatory issues for leading gambling companies in the Czech Republic, as well as adaptation to the new gambling regulation in the Czech Republic and implementation of the relevant processes into their day-to-day business.