Early on Tuesday, Czech police initiated mass arrests in relation to corruption in football in connection with betting. Czech website iSport.cz first reported the story, stating that the police have already detained dozens of people, with players, referees and top-tier clubs involved in the scandal.
The leadership of the Football Association of the Czech Republic (FAČR) called an extraordinary meeting of the executive committee shortly after the story broke. After that, its chairman, David Trunda, confirmed the investigation at a press conference, saying that it is the result of three years of work and that the federation has cooperated in the process "for a long time."
The National Centre against Organised Crime (NCOZ) confirmed to the Czech news agency ČTK that it is carrying out criminal proceedings. According to ČTK, FAČR is currently investigating the matter and will issue a statement once it has established all the necessary information.
"Our department is carrying out criminal proceedings today. The submission of information is reserved for the High Public Prosecutor's Office in Olomouc," said NCOZ spokesman Jaroslav Ibehej.
According to iSport.cz, Europol and Interpol are also involved, and the raids were preceded by a three-year investigation. The website reported that the police action also involved first league and youth matches.
"Since 6:00 a.m., a giant crackdown has been underway, probably the biggest in the history of Czech football," it quoted from a text message sent out by FAČR chairman David Trunda to members of the executive committee.
"The Football Association is the initiator of this case. We have been cooperating with the police for a long time to uncover unfair practices," Trunda explained during his press conference.
According to him, 47 disciplinary proceedings have been initiated. Furthermore, the intervention does not concern anyone from the FAČR leadership. The association has been informing UEFA about its progress from the beginning.
"The focus is especially in Moravia, 99 per cent, which concerns dozens of people."
"This is the result of the cooperation between FAČR and the police of the Czech Republic. The Ethics Committee will today start proceedings with more than 40 players, officials, referees and clubs, including clubs of the highest competition down to the fourth league plus the youth leagues," Trunda wrote, according to iSport.cz.
The FAČR boss was due to attend the induction of former national team player Přemysl Bičovský into the Hall of Fame at 9:00, but excused himself.
Olomouc chief prosecutor Radim Dragoun said several dozen people were detained and searches were carried out at their homes and on other premises, according to the website of the High Public Prosecutor's Office.
The unpleasant affair for the entire Czech football movement comes just a day after the announcement of their Footballer of the Year (Pavel Sulc) and just two days before the men's national team begin the playoffs for the 2026 World Cup.
The biggest corruption scandal to date to shake Czech football was back in 2004. Based on police wiretaps, a number of officials, referees, delegates and influential people from the football association were punished. The protagonist of the affair was former Zizkov manager Ivan Horník.
According to iSport.cz, the current police investigation is primarily focussed in Moravia, concerning first division and youth matches. The news source stated that one of the suspects is Jan Wolf, the mayor of Karviná, who owns the first league club, and the player Samuel Sigut, as well as a professional referee. A city spokeswoman said there was no intervention at City Hall. Wolf was not answering his phone for comment.
Representatives of clubs from the first league and lower competitions, which ČTK contacted in the regions today, had no information about the police raid due to betting this morning. This concerns first league clubs Olomouc, Ostrava, Zlin, Slovacko and Mlada Boleslav, as well as Prostejov, Kromeriz and the Brno clubs Artis and Zbrojovka, which play in the second division.
The football club FC Zlinsko in Otrokovice, which focuses on the development of youth players, has also appeared in the media in connection with the case. Both the club's chief operating officer, Rostislav Zálešák, and its managing director, Tomáš Macek, told ČTK that they had no information that police had intervened at the club.
Showing posts with label Czech Republic. Show all posts
Showing posts with label Czech Republic. Show all posts
March 24, 2026
July 25, 2017
Czech legislators to add new gaming regulations
National legislators held a session yesterday discuss gaming regulations, according to Prague Monitor. After the meeting, new amendments could be added to federal laws in order to control potential public corruption through gaming operations. Earlier this year, the Congress approved a gaming law, which was previously modified by a lobbying organisation.
“During the legislative process, the gambling bill underwent several changes as a direct consequence of the gambling lobby’s intervention, which led to particular interests being put above public interests,” revealed a public analysis issued by the office of Human Rights Ministry.
Czech Republic Cabinet met yesterday in order to review the analysis and discuss further regulations for gaming activities. According to the document, the industry could represent a risk of corruption in public administration, as “favouritism, non-standard lobbying, economic and media pressure” could influence government officials, as reported by the local news outlet.
The Ministry’s document also reveals connections between gaming companies and national former and current authorities. The main example is the SYNOT gaming company owned by Senator Ivo Valenta, which employs former Finance Ministry officials. Czech Republic has been allegedly experiencing “Revolving Doors,” a phenomenon where gaming businessmen achieve governmental positions and after their periods, they return to their previous businesses.
“During the legislative process, the gambling bill underwent several changes as a direct consequence of the gambling lobby’s intervention, which led to particular interests being put above public interests,” revealed a public analysis issued by the office of Human Rights Ministry.
Czech Republic Cabinet met yesterday in order to review the analysis and discuss further regulations for gaming activities. According to the document, the industry could represent a risk of corruption in public administration, as “favouritism, non-standard lobbying, economic and media pressure” could influence government officials, as reported by the local news outlet.
The Ministry’s document also reveals connections between gaming companies and national former and current authorities. The main example is the SYNOT gaming company owned by Senator Ivo Valenta, which employs former Finance Ministry officials. Czech Republic has been allegedly experiencing “Revolving Doors,” a phenomenon where gaming businessmen achieve governmental positions and after their periods, they return to their previous businesses.
April 19, 2016
Czech government nears proper online gambling laws
The Czech government is slowing moving towards legalising online gambling in the country and at the same time preparing to hunt down and close any illegal offshore online gambling firms.
With the new tax on slot machines coming into effect shortly at 28% to 35% and sports betting and lotteries paying 23%, these taxes separate from corporation tax which is 19% expected to go through parliament and be signed by the Czech President.
With the current online laws inadequate for purpose these laws need to be updated and regulated before a proper framework for allowing operators to be correctly licensed by the State Supervision of Gambling and Lotteries Department of the Ministry of Finance, of which there are five licensees currently in operation Sazka, Synot Tip, Chance, Fortuna and Tipsport. However these operators have been highly critical of the current tax laws which have restricted their growth.
It is expected that new online gambling laws and a framework for regulators to work with will be present in early 2017.
With the new tax on slot machines coming into effect shortly at 28% to 35% and sports betting and lotteries paying 23%, these taxes separate from corporation tax which is 19% expected to go through parliament and be signed by the Czech President.
With the current online laws inadequate for purpose these laws need to be updated and regulated before a proper framework for allowing operators to be correctly licensed by the State Supervision of Gambling and Lotteries Department of the Ministry of Finance, of which there are five licensees currently in operation Sazka, Synot Tip, Chance, Fortuna and Tipsport. However these operators have been highly critical of the current tax laws which have restricted their growth.
It is expected that new online gambling laws and a framework for regulators to work with will be present in early 2017.
December 01, 2015
Prague to close down gambling arcades
The Prague City Assembly has voted to close all the 212 gambling sites that are overtaking the cities streets say lawmakers. The new legislation does not affect the 101 casinos within the city but the cafe or slot arcade style gaming centres.
The new law will take effect in January 2016 with a gradual closure of the gambling sites which some say could take a year or even more to happen.
“The operation of gambling is connected with a number of sociological and pathological phenomena,” Mayor Adriana Krnacova said.
Proposals were put forward back in 2008 to draw back the number of slot machines in the city from 8,358 to 2,724 however this did not happen and the new legislation hopes to address this.
The new law will take effect in January 2016 with a gradual closure of the gambling sites which some say could take a year or even more to happen.
“The operation of gambling is connected with a number of sociological and pathological phenomena,” Mayor Adriana Krnacova said.
Proposals were put forward back in 2008 to draw back the number of slot machines in the city from 8,358 to 2,724 however this did not happen and the new legislation hopes to address this.
December 18, 2014
Czech Republic gambling operators brace for tax hikes
Gambling operators in the Czech Republic could see their tax bills nearly double by 2016 if Finance Minister Andrej Babis (pictured) gets his way. Babis is set to present a new gambling tax proposal on Friday and a Czech newspaper reported that the plan includes rate hikes that would boost the government’s annual tax haul from CZK 8b (US $359m) to CZK 14b ($629m).
The newspaper claimed the current 20% tax on gross gaming revenue would be raised to between 30% and 40%, with fixed-odds sports betting coming in somewhere at the low end of that scale and slot machines at the high end. That’s on top of the 19% corporate tax that licensed gambling companies are required to ante up. The newspaper didn’t cite its sources for the figures and Babis declined to comment when queried by Reuters.
The Czech government is in the process of overhauling its gambling laws to allow online casino and lottery products in addition to sports betting. The legislation, which the government hopes to approve early in the new year, would also open the market up to international operators, although how many would find those tax rates appealing remains to be seen. The Czech Republic was one of several nations whose online gambling regimes were scolded by the European Commission last November as too restrictive.
The legislation is also intended to rein in the number of gaming machines currently entertaining gamblers in pubs, bars and other small-scale venues. There are currently 7.5 gaming machines for every 1,000 Czechs, twice the number in Slovakia and 25x the number in Austria.
On Monday, Czech national anti-drug coordinator Jindrich Voboril revealed that the government had approved a new national strategy that lumps gambling in with alcohol and drugs as targets for further restriction. The Ministry of Health has been tasked with preparing a plan of action by the end of March, which will remain in place until March 2019, after which the results will be evaluated and a new plan formulated.
The newspaper claimed the current 20% tax on gross gaming revenue would be raised to between 30% and 40%, with fixed-odds sports betting coming in somewhere at the low end of that scale and slot machines at the high end. That’s on top of the 19% corporate tax that licensed gambling companies are required to ante up. The newspaper didn’t cite its sources for the figures and Babis declined to comment when queried by Reuters.
The Czech government is in the process of overhauling its gambling laws to allow online casino and lottery products in addition to sports betting. The legislation, which the government hopes to approve early in the new year, would also open the market up to international operators, although how many would find those tax rates appealing remains to be seen. The Czech Republic was one of several nations whose online gambling regimes were scolded by the European Commission last November as too restrictive.
The legislation is also intended to rein in the number of gaming machines currently entertaining gamblers in pubs, bars and other small-scale venues. There are currently 7.5 gaming machines for every 1,000 Czechs, twice the number in Slovakia and 25x the number in Austria.
On Monday, Czech national anti-drug coordinator Jindrich Voboril revealed that the government had approved a new national strategy that lumps gambling in with alcohol and drugs as targets for further restriction. The Ministry of Health has been tasked with preparing a plan of action by the end of March, which will remain in place until March 2019, after which the results will be evaluated and a new plan formulated.
October 14, 2014
Czech Republic introduces new gambling bill
The Czech Republic is in the process of introducing a new gambling bill that would impose stricter regulations involving a variety of issues, including slot machine placements, betting limits, and tax revenues.
Czech Republic details new gambling billFinance Minister Andrej Babis unveiled details of the bill, which also includes a provision to create a database of gamblers to monitor their betting habits. The European country has been actively trying to curb cases of excessive gambling among its residents. Municipalities across the country have implemented their own regulations. On Thursday, Finance Minister Andrej Babis unveiled the details of a first comprehensive bill aimed to implement stricter rules and regulations for the industry.
A big part of these new regulations includes removing slot machines from regular pubs and bars and exclusively putting them in specialized bars and casinos. The Finance Ministry also plans to create a central monitoring system that would oversee all gambling operations in real time, while also creating a database of gamblers that will allow the ministry to intervene in “high-risk” gambling cases.
“We would also like to introduce principles of responsible gambling, establishing maximum hourly and monthly bet limits,” Babis said. “On top of that, we want to prevent certain groups of people from gambling. These include gambling addicts undergoing treatment or those who owe money either to their families or to the state.”
Gamblers and regular sports bettors will all be required to register in the aforementioned database, which will be linked to other registries in the country.
The proposed gambling bill would adhere to current EU rules on gambling, thus allowing the country to open its arms to online gambling operators who may want to nether the Czech market.
This part of the new bill is important because only five domestic bookmakers, including Fortuna Entertainment Group dominate the Czech gambling market. The current legislation bans any foreign online betting shops from catering to the market unless they also have physical betting shops in place.
However, the country is now realizing the missed revenue potential of the existing legislation. For one, the country doesn’t get tax revenues by not allowing foreign gaming operators to enter the market
“Users currently bet abroad, which several foreign companies make easier by introducing sites in Czech,” Deputy Finance Minister Ondrej Zavodsky told Reuters. “According to our estimates, the state misses out on more than 1 billion crowns a year in this segment.”
The bill is expected to be passed around to other government agencies before reaching the Lower House and could take effect in the early part of 2016.
Czech Republic details new gambling billFinance Minister Andrej Babis unveiled details of the bill, which also includes a provision to create a database of gamblers to monitor their betting habits. The European country has been actively trying to curb cases of excessive gambling among its residents. Municipalities across the country have implemented their own regulations. On Thursday, Finance Minister Andrej Babis unveiled the details of a first comprehensive bill aimed to implement stricter rules and regulations for the industry.
A big part of these new regulations includes removing slot machines from regular pubs and bars and exclusively putting them in specialized bars and casinos. The Finance Ministry also plans to create a central monitoring system that would oversee all gambling operations in real time, while also creating a database of gamblers that will allow the ministry to intervene in “high-risk” gambling cases.
“We would also like to introduce principles of responsible gambling, establishing maximum hourly and monthly bet limits,” Babis said. “On top of that, we want to prevent certain groups of people from gambling. These include gambling addicts undergoing treatment or those who owe money either to their families or to the state.”
Gamblers and regular sports bettors will all be required to register in the aforementioned database, which will be linked to other registries in the country.
The proposed gambling bill would adhere to current EU rules on gambling, thus allowing the country to open its arms to online gambling operators who may want to nether the Czech market.
This part of the new bill is important because only five domestic bookmakers, including Fortuna Entertainment Group dominate the Czech gambling market. The current legislation bans any foreign online betting shops from catering to the market unless they also have physical betting shops in place.
However, the country is now realizing the missed revenue potential of the existing legislation. For one, the country doesn’t get tax revenues by not allowing foreign gaming operators to enter the market
“Users currently bet abroad, which several foreign companies make easier by introducing sites in Czech,” Deputy Finance Minister Ondrej Zavodsky told Reuters. “According to our estimates, the state misses out on more than 1 billion crowns a year in this segment.”
The bill is expected to be passed around to other government agencies before reaching the Lower House and could take effect in the early part of 2016.
April 21, 2014
Czech Republic drafting online gambling bill
The Czech Republic has the highest number of bars with gambling licenses per capita worldwide. But with just under 60,000 gambling machines in operation within its borders, the Czech government is looking to tighten control over the gaming industry.
Recently, Czech Deputy Finance Minister Ondrej Zavodsky revealed in an interview with Bloomberg that his office is currently in the process of drafting a new gambling bill that would allowing online gaming for all operators in the Czech Republic. Sounds like a good plan, right?
But there’s a catch. The proposed bill would allow online gambling, but would increase taxes for casino operators who ultimately decide to offer online gambling services.
As it stands now, the Czech government collects roughly $400 million in taxes from the gaming industry a year. But Deputy Finance Minister Ondrej Zavodsky also pointed out that costs related to the gaming industry are at least four times higher than the tax revenue, hence the proposal to increase tax rates for the gambling operators
“We need to create an environment that will allow us to tackle hardcore gaming like slots or table games,” Zavodsky told Bloomberg.
Separate tax rates will apply for different types of gaming to augment the Government’s current take of around 8 billion koruna (approx. $400 million) in gaming industry tax revenues per annum.
Should the bill pass, a 2016 timeline for its implementation is expected, giving casino operators enough time to weigh the pros and cons of offering online gambling in the country. Casinos and slot operators would receive the short end of the stick as they stand to face higher tax rates, while lottery companies would get the benefit of being taxed less, or at least lower than the 20 percent operators currently pay.
Recently, Czech Deputy Finance Minister Ondrej Zavodsky revealed in an interview with Bloomberg that his office is currently in the process of drafting a new gambling bill that would allowing online gaming for all operators in the Czech Republic. Sounds like a good plan, right?
But there’s a catch. The proposed bill would allow online gambling, but would increase taxes for casino operators who ultimately decide to offer online gambling services.
As it stands now, the Czech government collects roughly $400 million in taxes from the gaming industry a year. But Deputy Finance Minister Ondrej Zavodsky also pointed out that costs related to the gaming industry are at least four times higher than the tax revenue, hence the proposal to increase tax rates for the gambling operators
“We need to create an environment that will allow us to tackle hardcore gaming like slots or table games,” Zavodsky told Bloomberg.
Separate tax rates will apply for different types of gaming to augment the Government’s current take of around 8 billion koruna (approx. $400 million) in gaming industry tax revenues per annum.
Should the bill pass, a 2016 timeline for its implementation is expected, giving casino operators enough time to weigh the pros and cons of offering online gambling in the country. Casinos and slot operators would receive the short end of the stick as they stand to face higher tax rates, while lottery companies would get the benefit of being taxed less, or at least lower than the 20 percent operators currently pay.
September 13, 2013
Slovaks are behind Czech football match-fixing scandal, police says
A group of Slovaks played a key role in a football corruption scandal in the Czech Republic and it manipulated the Slovak league matches' results as well, according to Slovak police, Police President Tibor Gaspar told reporters yesterday.
Seven people have been accused in the case, he added.
The gang was allegedly bribing footballers and then it gained money by betting on the manipulated matches, mainly via foreign online betting operators.
The Slovak group rigged at least 19 soccer matches in the Czech Republic and in Slovakia in the past year, Gaspar said.
The gang gave bribes of some 210,000 euros in total to football players, allegedly some 2000 to 60,000 euros per match.
The Slovak police estimated that the gang had gained 50,000 euros per fixed match.
"According to available information, the main organisers of this match-fixing and corruption were Slovaks. They masterminded the whole process of illegal betting," Gaspar said.
However, the gang's boss was a foreigner, probably from an Asian country, from whom the gang members received money to bribe players.
The group first chose a match from which it wanted to profit, then it addressed some footballers and offered them a bribe for match-fixing, Gaspar said.
He also described the communication between the gang and players during the match.
"If the mediator kept sitting at the stadium, he thereby sent a signal to the footballers saying the offer held and they should try to reach the agreed result. If he left the stadium, it was a signal that their match was not in the offer of the online (betting) operator," Gaspar added.
Three former football players were offering the bribes, Gaspar noted.
Four Slovak first league DAC 1904 Dunajska Streda players are accused of bribe taking. They are suspected of having manipulated results of four out of eight league matches this season.
Detectives traced the gang thanks to a Czech football club's player whom the gang had allegedly offered a bribe but he turned to the police.
The Czech anti-corruption police have so far accused 12 present and former football players of bribery within the match-fixing case.
The police made 15 searches of homes and other premises in a raid on Wednesday morning. Several players have been reportedly arrested within the raid.
Czechs investigate the case in cooperation with the Slovak police.
During the police raid in Slovakia on Monday, policemen searched homes of the suspects finding 49,000 euros in cash and communication devices which the fraudsters used for their criminal activities.
This was the biggest bribery scandal in Slovak football in the past years.
The Slovak Football Association, which helps detectives in the investigation, has appreciated the police work.
"It is in the interest of the football movement to clean it up of any corruption symptoms," the association said in reaction to the affair.
Slovak footballers face up to two-year ban from playing for match-fixing and their clubs would be expelled from the league.
Seven people have been accused in the case, he added.
The gang was allegedly bribing footballers and then it gained money by betting on the manipulated matches, mainly via foreign online betting operators.
The Slovak group rigged at least 19 soccer matches in the Czech Republic and in Slovakia in the past year, Gaspar said.
The gang gave bribes of some 210,000 euros in total to football players, allegedly some 2000 to 60,000 euros per match.
The Slovak police estimated that the gang had gained 50,000 euros per fixed match.
"According to available information, the main organisers of this match-fixing and corruption were Slovaks. They masterminded the whole process of illegal betting," Gaspar said.
However, the gang's boss was a foreigner, probably from an Asian country, from whom the gang members received money to bribe players.
The group first chose a match from which it wanted to profit, then it addressed some footballers and offered them a bribe for match-fixing, Gaspar said.
He also described the communication between the gang and players during the match.
"If the mediator kept sitting at the stadium, he thereby sent a signal to the footballers saying the offer held and they should try to reach the agreed result. If he left the stadium, it was a signal that their match was not in the offer of the online (betting) operator," Gaspar added.
Three former football players were offering the bribes, Gaspar noted.
Four Slovak first league DAC 1904 Dunajska Streda players are accused of bribe taking. They are suspected of having manipulated results of four out of eight league matches this season.
Detectives traced the gang thanks to a Czech football club's player whom the gang had allegedly offered a bribe but he turned to the police.
The Czech anti-corruption police have so far accused 12 present and former football players of bribery within the match-fixing case.
The police made 15 searches of homes and other premises in a raid on Wednesday morning. Several players have been reportedly arrested within the raid.
Czechs investigate the case in cooperation with the Slovak police.
During the police raid in Slovakia on Monday, policemen searched homes of the suspects finding 49,000 euros in cash and communication devices which the fraudsters used for their criminal activities.
This was the biggest bribery scandal in Slovak football in the past years.
The Slovak Football Association, which helps detectives in the investigation, has appreciated the police work.
"It is in the interest of the football movement to clean it up of any corruption symptoms," the association said in reaction to the affair.
Slovak footballers face up to two-year ban from playing for match-fixing and their clubs would be expelled from the league.
September 12, 2013
Czech police arrest many footballers suspected of corruption
The Czech anti-corruption police today arrested tens of football players, mainly of lower competitions, but also from the first league, over betting and influencing matches, server isport.cz wrote and the police´s spokesman Jaroslav Ibehej confirmed this in a press release for CTK.
The Czech Football Association (FACR) does not yet have any information about which players, or clubs and matches the case concerns.
"We have no detailed information on the matter, but what the police said in their press release. Until our security manager (Martin Synecky), currently attending a meeting of UEFA security managers in Warsaw, receives more detailed information, we will not comment on the matter," FACR spokesman Jaroslav Kolar told CTK.
Detectives from the Squad for Uncovering Corruption and Financial Crime have been securing pieces of evidence in connection with a suspicion of corrupt behaviour in the football environment since 4:00 today, Ibehej said in the press release.
The Czech Football Association (FACR) does not yet have any information about which players, or clubs and matches the case concerns.
"We have no detailed information on the matter, but what the police said in their press release. Until our security manager (Martin Synecky), currently attending a meeting of UEFA security managers in Warsaw, receives more detailed information, we will not comment on the matter," FACR spokesman Jaroslav Kolar told CTK.
Detectives from the Squad for Uncovering Corruption and Financial Crime have been securing pieces of evidence in connection with a suspicion of corrupt behaviour in the football environment since 4:00 today, Ibehej said in the press release.
March 13, 2012
Helvet Group & Merkur Casino face criminal charges
The Czech Finance Ministry’s anti-money laundering and financial crimes watchdog, the Financial Analytical Unit (FAÚ), says hundreds of millions of crowns which gambling and betting firms should have put into charitable causes was effectively embezzled. The accusations were outlined in its annual report for 2011 released last month. On Thursday, the daily Hospodářské noviny (HN) published the names of the firms against which the FAÚ has lodged criminal complaints.
HN reported that the Helvet Group “diverted” Kč 140 million ($7.5 million US), and Merkur Casino – Kč 100 million ($5.3 million US), which the firms claimed they had given to worthy causes. According to the criminal complaints lodged by the FAÚ, all that money made its way back to the companies. For the most part they allegedly operated a scam based on sending money to the accounts of registered, but inactive charities and civic organizations. The money was then withdrawn in cash.
Both of the companies refused to comment about the charges against them.
The bogus NGOs which reportedly received money from the Helvet Group include the Association for the Defense of Rights and Justice (SOPS), which according to the FAÚ received Kč 16.7 million ($893,000 US). Among other recipients of “contributions” from Merkur Casino was the inactive Association for the Support and Promotion of UNESCO World Heritage Monuments to which the casino chain operator transferred Kč 3.5 million ($187,000 US), and Tree of Life – a Czechoslovak Society about which the only information available is that its registered address is near Prague’s main airport.
Two other supposed charities, Greenway Centrum and Our Rainbow (Naše duha) are registered at the same address. The only sign of any activity from either are virtual plans for an ecological center. Together these two organizations received almost Kč 16 million (855,000 US).
The tax exemption enjoyed by Czech betting and gambling firms has finally been scrapped. Until now, instead of paying any corporate or gambling tax, lottery firms were required to donate to charities but free to choose which good causes they could sponsor. From this year they are subject to corporate tax, a new gambling tax, plus a local income tax.
HN reported that the Helvet Group “diverted” Kč 140 million ($7.5 million US), and Merkur Casino – Kč 100 million ($5.3 million US), which the firms claimed they had given to worthy causes. According to the criminal complaints lodged by the FAÚ, all that money made its way back to the companies. For the most part they allegedly operated a scam based on sending money to the accounts of registered, but inactive charities and civic organizations. The money was then withdrawn in cash.
Both of the companies refused to comment about the charges against them.
The bogus NGOs which reportedly received money from the Helvet Group include the Association for the Defense of Rights and Justice (SOPS), which according to the FAÚ received Kč 16.7 million ($893,000 US). Among other recipients of “contributions” from Merkur Casino was the inactive Association for the Support and Promotion of UNESCO World Heritage Monuments to which the casino chain operator transferred Kč 3.5 million ($187,000 US), and Tree of Life – a Czechoslovak Society about which the only information available is that its registered address is near Prague’s main airport.
Two other supposed charities, Greenway Centrum and Our Rainbow (Naše duha) are registered at the same address. The only sign of any activity from either are virtual plans for an ecological center. Together these two organizations received almost Kč 16 million (855,000 US).
The tax exemption enjoyed by Czech betting and gambling firms has finally been scrapped. Until now, instead of paying any corporate or gambling tax, lottery firms were required to donate to charities but free to choose which good causes they could sponsor. From this year they are subject to corporate tax, a new gambling tax, plus a local income tax.
April 23, 2010
Czech Republic tries to ban advertising from foreign gambling sites
Czech betting companies could get relief from international competition if a proposed amendment is passed that bans foreign online betting companies from advertising in the Czech Republic, but the ongoing debate reveals loopholes in European gambling law, experts say.
Online betting is an industry worth 29 billion Kč a year in the Czech Republic, with foreign online gambling companies - many of which are based in tax havens like Gibraltar and Malta - accounting for 4 billion Kč last year, according to the Association of Betting Service Providers. Czech tax laws require gambling companies operating in the country to make charitable contributions of up to 20 percent of revenues on top of normal taxes, giving companies operating with European licenses, but catering to Czech clients, a distinct advantage.
"These foreign online betting companies have no license from the Finance Ministry, and they pay no taxes in the Czech Republic, so we therefore support banning advertisement of foreign companies here," said Radek Ležatka, spokesman for the Finance Ministry.
Under the new amendment, foreign gambling companies will not be allowed to advertise in the Czech Republic, nor offer Czech-language services on their Web sites. But gambling industry insiders have cried foul over the amendment, saying it contradicts European law.
The European Parliament set down a definitive ruling on the regulation of online gambling Sept. 8, 2009.
"The EU internal market should not be taken as the basis for regulating [the gambling] industry. Rules governing online gambling should not be laid down by the EU, as member states are quite capable of regulating the industry themselves," the Parliament's report says.
The disagreement between Czech authorities and foreign gambling companies stems from differing interpretations of that ruling.
"The European Court decided that the national governments of EU member states are entitled to prohibit in their territories illegal gambling operators. We expect the government to take clear and effective steps that will lead to the removal of ... foreign companies that profit in the Czech Republic without paying fees," said Marek Herman, director of the Association of Betting Service Providers.
But, according to Clive Hawkswood, chief executive of the Remote Gambling Association, a UK-based organization promoting the regulation of the European gambling industry, the situation isn't that simple.
"If someone in the Czech Republic is playing poker through a company based in Malta, are they crossing the border? The question is where the gambling takes place: where the company is based and licensed or where the consumer is based. Companies argue one way, and governments argue another," he said. "European law says you must provide access to your market if the company is licensed in that jurisdiction, but there are grounds on which you can restrict access to licensed foreign companies if, for example, they increase crime. But it's difficult to prove that you will cut down crime only by banning foreign companies."
If the amendment is passed by Czech Parliament, it will then be examined by the European Commission.
Czech gambling companies have complained about the advantage foreign companies have over their businesses since online gambling was legalized in 2009.
Petr Šrain, spokesman for Fortuna, one of the largest online betting companies in the country, said unregistered foreign companies have "stormed the Czech gambling market."
"Foreign companies are a serious problem for us and put us at a real disadvantage. We hope the government will do something about it," he said.
Fortuna also does business in Slovakia, Poland and Croatia, where the company "respects local legislation," according to Šrain.
"We are registered in all of the countries where we do business, and we pay taxes there," he added.
Bwin, a gambling company that is registered in Gibraltar and operates in the Czech Republic, remains cautiously optimistic about the government's decision, according to spokesman Klaus Lackner, who said, "A well-functioning regulatory regime must be proportionate, nondiscriminatory and fully adapted to the Internet and the cross-border nature of the online gaming and betting sector in order to effectively foster consumer protection."
"National regulation can only curtail the black market if the national line-up is more attractive than unlicensed international offers that, in the online environment, are only one click away. bwin is confident that, after the upcoming elections, the new Czech government will take these elements into consideration and engage in a constructive information exchange with the private sector," he added.
Online betting is an industry worth 29 billion Kč a year in the Czech Republic, with foreign online gambling companies - many of which are based in tax havens like Gibraltar and Malta - accounting for 4 billion Kč last year, according to the Association of Betting Service Providers. Czech tax laws require gambling companies operating in the country to make charitable contributions of up to 20 percent of revenues on top of normal taxes, giving companies operating with European licenses, but catering to Czech clients, a distinct advantage.
"These foreign online betting companies have no license from the Finance Ministry, and they pay no taxes in the Czech Republic, so we therefore support banning advertisement of foreign companies here," said Radek Ležatka, spokesman for the Finance Ministry.
Under the new amendment, foreign gambling companies will not be allowed to advertise in the Czech Republic, nor offer Czech-language services on their Web sites. But gambling industry insiders have cried foul over the amendment, saying it contradicts European law.
The European Parliament set down a definitive ruling on the regulation of online gambling Sept. 8, 2009.
"The EU internal market should not be taken as the basis for regulating [the gambling] industry. Rules governing online gambling should not be laid down by the EU, as member states are quite capable of regulating the industry themselves," the Parliament's report says.
The disagreement between Czech authorities and foreign gambling companies stems from differing interpretations of that ruling.
"The European Court decided that the national governments of EU member states are entitled to prohibit in their territories illegal gambling operators. We expect the government to take clear and effective steps that will lead to the removal of ... foreign companies that profit in the Czech Republic without paying fees," said Marek Herman, director of the Association of Betting Service Providers.
But, according to Clive Hawkswood, chief executive of the Remote Gambling Association, a UK-based organization promoting the regulation of the European gambling industry, the situation isn't that simple.
"If someone in the Czech Republic is playing poker through a company based in Malta, are they crossing the border? The question is where the gambling takes place: where the company is based and licensed or where the consumer is based. Companies argue one way, and governments argue another," he said. "European law says you must provide access to your market if the company is licensed in that jurisdiction, but there are grounds on which you can restrict access to licensed foreign companies if, for example, they increase crime. But it's difficult to prove that you will cut down crime only by banning foreign companies."
If the amendment is passed by Czech Parliament, it will then be examined by the European Commission.
Czech gambling companies have complained about the advantage foreign companies have over their businesses since online gambling was legalized in 2009.
Petr Šrain, spokesman for Fortuna, one of the largest online betting companies in the country, said unregistered foreign companies have "stormed the Czech gambling market."
"Foreign companies are a serious problem for us and put us at a real disadvantage. We hope the government will do something about it," he said.
Fortuna also does business in Slovakia, Poland and Croatia, where the company "respects local legislation," according to Šrain.
"We are registered in all of the countries where we do business, and we pay taxes there," he added.
Bwin, a gambling company that is registered in Gibraltar and operates in the Czech Republic, remains cautiously optimistic about the government's decision, according to spokesman Klaus Lackner, who said, "A well-functioning regulatory regime must be proportionate, nondiscriminatory and fully adapted to the Internet and the cross-border nature of the online gaming and betting sector in order to effectively foster consumer protection."
"National regulation can only curtail the black market if the national line-up is more attractive than unlicensed international offers that, in the online environment, are only one click away. bwin is confident that, after the upcoming elections, the new Czech government will take these elements into consideration and engage in a constructive information exchange with the private sector," he added.
February 08, 2010
Czech online gambling firms face foreign competition
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.
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.
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