Czech legislators have approved legislation increasing taxes on gaming enterprises. The updated regulations will also, at long last, allow international companies to enter the country’s internet gambling market.
Currently, slot machines are taxed at a rate of 28%. This rate will climb to 35% under the new law. Other types of gambling, such as sports wagering and lotteries, will continue to be taxed at 23%. These modifications are scheduled to take effect in the coming year.
The bill must be approved by the Senate before it can become law. The government anticipates that the tax increases, in addition to the regular 19% corporate tax rate, will generate an additional 15 billion CZK in income.
This action is not solely about increasing government revenue. It is also intended to address the problem of compulsive gambling in the nation. The government hopes to weaken the grip of illegal operators by allowing foreign businesses to operate legally in the Czech online gambling industry. The Ministry of Finance will even have the authority to shut down these illicit websites.
A second bill will establish more stringent regulations for the operation of slot machines and video lottery terminals.
For some time now, there has been a perception of inequity in the Czech gambling market. Local businesses must adhere to stringent registration and tax obligations. Meanwhile, foreign rivals have been operating without paying taxes or registering their businesses in the Czech Republic. This provided them with a substantial edge.
Because the internet is borderless, local authorities have struggled to block these foreign operators. Furthermore, they cannot directly violate the European Union’s concept of free movement of services. This new legislation seeks to establish a level playing field.
City councils are slow to act regarding these questionable online platforms. They’ve prohibited promotions, certainly, but how effective is that in reality?