It’s no secret that the gambling industry is very profitable to both those who utilize it as a form of entertainment and countries in which it is legal.
Today, we will discuss the Czech Republic and what its plans are concerning this industry.
Increasing Taxes:
Namely, its Ministry of Finance came to a decision that they should increase gambling taxes in the country and according to some reports, lotteries, bingo and live games are going to be the ones to experience these changes.
Generally speaking, all taxes that are in correlation with gambling are at 23% of GGR for the time being, while gaming machines are currently taxed at 35% of gross gaming revenue.
As we stated previously, bingo, lotteries and live games are set to be the hardest hit, meaning that their rates will go up to thirty percent of GGR, if all these plans that Ministry has in mind are permitted.
What About The Rest?
Other forms of gambling will not experience such drastic increments as those mentioned above.
Furthermore, fixed-odds betting will face a mild increase from twenty-three percent to twenty-five percent of GGR, while the 35 percent intended for gaming machines would stay the same.
The Gambling Industry Not The Only One:
Although it may seem like Czech Republic was focusing only on this industry, that’s not exactly the case.
Namely, they are planning on targeting other segments, such as alcohol and tobacco with a goal to “increase the public budget” and these changes will probably come into force in the beginning of next year.
The Ministry’s submission for tax changes commented on this situation by saying:
“The proposed amendment to the gambling tax law divides the rate of gambling tax into three levels, according to the harmfulness of individual gambling in the same way as the government's draft Gambling Tax Act of 2015.”
What Did Others Say About This Decision?
It looks like politicians are particularly thrilled with these plans, especially the ones in the country’s Chamber of Deputies lower house, including Miroslav Kalousek, the former leader of the KDU-CSL and TOP 09 parties, who has already been the government’s Finance Minister.
He shared his opinion with the Pravo News:
“We can divide the word ‘gambling’ into socially acceptable activities and addiction. here is a big difference between slot machines and a bunch of employees in a workplace contributing towards a ticket.
For lotteries, I would leave the rate of taxation at the current level. I consider the increase to 30% to be absolutely disproportionate and unnecessary.”
On the other hand, Jan Volny, the vice-chairman of the ANO 2011 political party, which currently has 78 seats in the house partially agrees with this decision, however, he thinks that thirty percent is definitely too much and that it could potentially cause negative effects.
He added: “Personally, I am a little worried not to overdo it and avoid gambling in the grey market. Current tax rates on live games and lotteries is sufficient.”
Jan Bartosek, an eminent member of the Chamber of Deputies for the Christian and Democratic Union party also isn’t sure that this resolution is the smartest thing to do, mainly due to the fact that it could “lead to an increase in illegal gambling.”
Source: “Czech Finance Ministry Proposes Gambling Tax Hikes” https://www.igamingbusiness.com/news/czech-finance-ministry-proposes-gambling-tax-hikes. iGaming Business. April 9, 2019.
