Unlicensed Gambling in Czech Republic Raises Concerns

Concerns Rise Over Unlicensed Gambling in Czech Republic Amid Discrepancies in Official Data

In recent developments within the Czech Republic’s gambling industry, serious concerns have been raised regarding the true extent of unlicensed gambling. The Institute for the Regulation of Gambling (IPRH), a prominent trade group, has highlighted significant discrepancies in government-provided data, urging for immediate clarification and reforms. This situation underscores the pressing need for accurate data and effective regulation to safeguard both the industry and consumers.

Discrepancies in Official Data

The core of the issue revolves around conflicting data on the prevalence of unlicensed gambling in the Czech Republic. According to figures from CELNI SPRAVA, the country’s customs agency, black market gambling accounted for a mere 5% of the total betting volume, amounting to CZK 54 billion (€2.1 billion) in 2022. However, the IPRH has contested this figure, suggesting that the actual proportion of unlicensed gambling could be as high as 30% of the market.

A Call for Government Action

Jan Řehola, founder and director of the IPRH, has been vocal about the potential underreporting of unlicensed gambling activities. He estimates that illegal land-based gambling alone is costing the Czech economy up to CZK 2.1 billion (€85 million) annually. This figure raises alarms about the effectiveness of current regulatory measures and the accuracy of government data.

Over the past six years, CELNI SPRAVA has reportedly taken action against nearly 1,300 unlicensed land-based casinos, yet the number of licensed gambling venues has dwindled to just 707. This decline in legal venues could inadvertently be pushing more consumers towards unregulated, illegal gambling options.

The Shift to Online Gambling

The rise in online gambling has also contributed to the challenges in tracking and regulating unlicensed activities. The IPRH noted that a survey conducted by the Poker and Odds Players Association revealed that up to 40% of players may be using illegal online operators, often without realizing it. This issue is exacerbated by the fact that CELNI SPRAVA only monitors sites available in the Czech language, whereas many players access sites in other languages, further complicating enforcement efforts.

The situation has been compounded by several international gambling operators exiting the Czech market following the 2017 gambling reforms. These reforms introduced a higher tax rate and required in-person customer verification at authorized physical venues for online gambling participation. As of 2023, only 11 operators remain active in the Czech market, with most being domestic companies.

A Call for New Reforms

In light of these issues, the IPRH is advocating for the Czech government to introduce new reforms aimed at more effectively regulating the gambling industry. The trade group argues that without significant changes, the country risks allowing unlicensed gambling to flourish, undermining consumer protection and eroding the legal market.

Conclusion: The concerns raised by the IPRH highlight a critical need for the Czech government to reassess its approach to gambling regulation. With substantial discrepancies in data and the rise of unlicensed gambling, there is an urgent need for accurate information and robust regulatory measures. Addressing these challenges will not only protect consumers but also ensure the long-term viability of the legal gambling market in the Czech Republic.