Czech Regulators Fail to Act against Unlicensed iGaming Operators

The Czech Republic’s new online gambling regime has so far proved to be ineffective against unlicensed iGaming operators, according to the local branch of the Transparency International (TI) non-governmental organization.

The Central European country has become the latest one to regulate its gambling market to ensure compliance with EU regulatory standards. It adopted the new legislative framework last summer after it passed a Senate vote with overwhelming support. The measure was then signed into law by President Miloš Zeman to come into effect on January 1, 2017.

Under the newly adopted regulations, all iGaming companies that have interest in entering the local market need to first obtain a license. In other words, providing unlicensed gambling services of any kind to Czech customers is strictly and explicitly prohibited by law.

However, it seems that regulators have so far failed to prevent unlicensed operators from engaging local players. As pointed out by David Ondracka, Director of TI’s Czech branch, officials have not taken measures to block 25 such operators and urged the country’s Finance Ministry to be firm and resolute in its actions against violators.

Mr. Ondracka named Unibet and Lottoland as the “biggest sinners.” He also drew attention to Betfair and bet365, which have not closed their Czech websites, but have at least stopped accepting local players.

TI is set to conduct another probe into the matter in April to check whether adequate actions had been taken. The NGO encouraged officials to introduce IP blockage initiatives and thus drive away wrong-doers.

IP address blocking has been a common measure in the new iGaming regulations adopted by a number of EU jurisdictions. However, it should be said that it is not as effective as governments would wish, given the fact how easy it is to circumvent such blockage.

Although the Czech Republic amended its iGaming regulatory system in a manner that was welcomed by the European Commission, it has been suggested by industry insiders that the local market’s chances to attract wider attention are not particularly big. The reason for this hides behind the fact that Czech lawmakers introduced a taxation regime that is not likely to appeal to a great number of operators.

Under the country’s newly adopted law, any company providing services to local Czech gambling customers must pay a 35% tax on full-year gross gaming revenue.

UK gambling giant William Hill was among the operators to leave the Czech market prior to its regulation. In late December, the company informed local players and affiliates that its offering will no longer be available in the country due to the new regulatory regime. However, it hinted at a possible comeback.

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