- 75% of casinos in Czech Republic have closed down
- Nearly 50% of slot machines have gone
- Measures taken to stop tax evasion and treat addicts
- 2017 tax revenue was a record CZK12.2bn
The Czech Republic is busy notching up further victories in its decade-long war on gambling. And despite the crackdown on casinos and slot machines, tax revenues hit a record high in 2017.
Czechs get tough
The 2017 Gambling Law is having the intended effect – to restrict opportunities to gamble, tax the operators, and help treat problem gamblers. And Finance Minister Alena Schillerová, who has responsibility for overseeing the sector, has now declared victory.
The 2017 legislation is the latest battle to resolve problems in the country formerly nicknamed “the casino of Europe.” Gambling addiction was a massive problem, and the law was drafted at least in part to reduce the social harm. Collecting taxes from casinos and the country’s “gaming bars” is also a priority.
Schillerová told reporters: “I’m definitely very satisfied with how things are going. The Czech Republic has ceased to be a casino in the heart of Europe. Since January 2012, the number of casinos is down from 7,600 to roughly 1,800 – one quarter as many.”
Change was already afoot before the legislation. Schillerová said that since 2012, the number of casinos had gone down by 75%, many banned by more than 450 local authorities in a bid to stamp out criminality. Even the capital, Prague, has a zero-tolerance policy and is working to ensure that the few remaining casinos there do not have their licenses renewed.
Existing casinos can still renew their licenses, but no new ones will be permitted to open, according to Schillerová. The new law means casinos must now register anyone who wants to play and players will be obliged to take breaks.
The Czech Republic is estimated to have 110,000 problem gamblers, double the number per capita of other European countries. Schillerová’s ministry is introducing new measures in 2020 to register them and even ban them from gambling – anywhere – if they struggle to self-exclude.
The number of slot machines in the Czech Republic has fallen by almost half since 2012, to fewer than 39,000. Slots have been regulated since 2008 and owners needed a license for each machine. They could be found in bars all over the country, but many operators dodged the taxes on them.
Schillerová said none of the remaining machines would have their licenses renewed and operators who are still failing to pay the tax due on machines risk having them impounded.
Revenues and tax increase
Despite the extensive crackdown, the korunas keep rolling in for the government. Total gambling spend in 2017, the last year for full data, was up 14% to CZK224bn ($9.9bn; £7.6bn), while revenues were up a more modest 1.1% at CZK39.8bn ($1.77bn; £1.35bn).
Online gambling was the big winner, unsurprisingly after the mass closure of land-based opportunities to gamble. It rose a staggering 56% in 2017 from 2016 to CZK8.3bn ($370m; £280m). Online gambling now accounts for more than 20% of the total sector in the Czech Republic.
Sports betting, too, is surging. In 2017, revenues rose to CZK6.2bn ($272m; £210m), up CZK1bn ($44m; £34m) year on year. Casino online revenue, a new offering since the new law, was more than CZK2bn ($88m; £68m), while revenue from land-based casinos was just CZK120m ($5.3m; £4.1m).
Taxation on revenue is hefty at 35% for slots and 23% for sports betting. The government’s tax take for 2017 was a record high of CZK12.2bn ($54m; £41m). However, the new law is beginning to bite and Schillerová has stated that the tax earned in 2018 is more likely to be around CZK10bn ($440m; £340m) and should stabilize around that mark thereafter.