Court determines that Prague can enforce its own gambling regulations
The Constitutional Court has ruled that the Czech capital has the right to impose local restrictions on gambling.
Czech Republic.- The capital city of Prague has won a key victory in its bid to impose its own regulations for gambling independent of national policy. The city’s ban on slots and decision to allow individual districts to impose their own rules had been challenged by the Ministry of the Interior, but the Constitutional Court has ruled that the capital has the autonomy to make such decisions.
Prague implemented an ordinance banning technical games, including slots. Live dealer games like poker and roulette were allowed to continue at land-based casino venues, but the city’s 57 districts were given the power to impose their own restrictions. Some 41 districts chose to ban live gaming completely, while others opted for time restrictions.
The Ministry of the Interior and the Czech Competition Authority launched a legal challenge and temporarily suspended the order, claiming that it was discriminatory against gambling licensees and breached national regulations. They also argued that the fragmented regulatory framework led to market distortions and that Prague should have a single city-wide framework.
The Constitutional Court has now lifted the suspension, ruling that local legislation can regulate gambling within their districts despite one judge, Justice Milan Hulmák, arguing that there was “no clear rationale or objective justification” for district-by-district variations in policy.
The Czech Competition Authority says the ruling may lead to difficulties for gambling operators with venues in multiple districts due to greater complexity and increased operational costs. The move could also open the door for other provinces to introduce variations in gambling regulations.
Gambling tax evasion in the Czech Republic
Back in February, the Financial Administration of the Czech Republic (Finanční Správa) reported that it had discovered major tax evasion by gambling businesses. Its tax audit of Czech gambling licensees for 2021 to 2022 led it to recoup over CZK 540m (€22m) for the public purse, the body said.
Finanční Správa is the Czech state agency for tax enforcement. It undertakes special tax audits in sectors deemed to be high-risk, which include gambling as well as banking and insurance. The administration said it detected the liabilities by using a new analysis of gaming data, which allowed it to identify suspicious financial movements and irregular player behaviour at casinos.
Its investigation of gambling licensees for 2021-22 resulted in an extra tax assessment of CZK 340m (€14m) plus other financial obligations stemming from misreported fees and commissions.
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