While 2009 was a record year for online gambling sites in the Czech Republic, site operators are not pleased. Their numbers should have been much higher, they say, but because of outdated gambling laws and poor implementation of existing rules, foreign internet gambling sites are scooping up all the players.
Taxation is the biggest issue that is frustrating local operators. Online gambling sites based out of the Czech Republic must be licensed in order to operate legally. When they become officially registered with the state though this license, they also become subject to heavy taxation. Foreign gambling websites, however, are not subject to Czech tax laws, and are able to operate unhindered.
"It is an incredible situation," says Lubomír Ježek, a spokesman for the Czech Republic's highest-grossing betting agency Tipsport. "We have to pay all the fees and taxes on one hand, and, on the other, we have to compete with bookmakers who do not have any such obligations to pay taxes here."
Less tax means greater profits for foreign firms, which in turn allows them to create massive, influential advertising campaigns that target Czech players. This only serves to exacerbate the frustrations of local operators.
At this point, change can only come from the state, and everyone involved in the situation is acutely aware of this. But even the government is struggling, and no one is quite sure how to proceed with changes to Czech gambling laws.
"A new gaming bill has been on the table for a number of years, but with no success," said Finance Ministry spokesman Jakub Haas. "The new bill attempts to create common principles for all the types of gambling, so online gambling would not be otherwise disadvantaged."
Internet gambling operators in the Czech Republic currently pay 30% more taxes than any other business, and are also responsible for paying additional contributions for public purposes.