The Czech Republic plans a tax increase on gambling, as well as the sale of alcohol and tobacco. Czech Finance Minister Alena Schiller said an increase in average salaries and purchasing power of Czech citizens convinced the government to raise taxes on “vices”.

The average wage growth took place over a 9-year period. During that same time, Czech officials did not raise taxes on these particular activities.

Alena Schiller said, “The average wage growth [in the Czech Republic] between 2009 and 2018 was 45%, while consumer tax on alcohol was last increased in 2010 and we will not raise it again until 2020.”

Under the new plan, taxes on lotteries and “games of chance” increase by 7%. Sports betting taxes increase only 2%.

Meanwhile, the taxes on hard liquor increase 13%, while the taxes on cigarettes go up 10%.

Tax Increase Due to Wage Increases

Whether an increase in average wagers necessarily requires a tax increase remains a question for debate. Many citizens naturally hope wage increases might allow them to get ahead, but the government officials would justify their policy based on the fact these are discretionary expenditures.

In a micro sense, the Czech officials’ decision to raise taxes based on gains by the middle class have an interior logic. An official like Adam Vojtech might have senses backlash from residents, because he offered a different justification.

WTO, OECD Recommended Increases

Czech Health Minister Adam Vojtech said the tax increase brings the Czech Republic more in line with the international community. Vojtech said international organizations called for efforts to curb possibly self-destructive behavior.

The Health Minister said, “Both the World Health Organization and the OECD [Organisation for Economic Co-operation and Development] recommend that we do something about alcohol and tobacco consumption, and one of the most effective recommendations is a higher tax burden.”

No Tax Increase for Online Casinos

Online gambling operators complained in recent years that the Czech Republic’s taxes are too high already. Most countries impose taxes on online gambling in the 15% of gross gambling revenues range. The Czech Republic imposed a 30% tax on online gambling, so many gaming sites chose not to pursue a license.

With startup costs and other assorted fees mixed in, a 30% rate leaves too small of a margin to assure profits. The current tax would not affect licensed online betting sites, but instead land-based gambling operations.

Tax on Land-Based Casinos

The tax particularly affects King’s Casino Rosvadov, which has the largest land-based poker room in the world. King’s Casino Rosvadov sits on the border between the Czech Republic and Germany, roughly halfway between Prague and Munich.

Therefore, the tax affects many non-Czech European gamblers visiting the country. In such a case, the population is likely to accept the additional tax burden, because it’s a tax on visitors and tourists. Because King’s Resort has sponsorship deals with PokerStars, many professional poker players visit the casino.

Definition of “Games of Chance”

The phrase “games of chance” used by Alena Schiller refers to slot machines, table games, video poker, and live poker. In essence, any game played in a land-based casino gets taxed at a 7% higher rate.

About the Author
Cliff Spiller avatar
Cliff Spiller

US Gaming Laws, European Legislation, Casino Business and Mergers, Asia-Pacific Gaming News, Problem Gambling and Responsible Gambling, UK Gambling Commission -- In Cliff Spiller's eight years with BestOnlineCasinos.com, he's covered the global gaming industry ranging over 5 continents. He started writing gaming guides in 2004 and has written for sites like OnlineUnitedStatesCasinos.com and VegasSlotsOnline.com.

Cliff also wrote the old SlotSystems blog under the name "Chuck Flick", where he exposed scam artists who sold books and e-books that claimed people could beat slot machines. Cliff's articles have been linked by Casino City Times, USA Today, and the old New York Times blog, among others. Cliff lives in the Dallas sururb of McKinney, Texas, where he enjoy games of all sorts, sports, and karaoke. He's a long-suffering Dallas Cowboys fan. email: support@bestonlinecasinos.com.

READ MORE

US Gaming Laws, European Legislation, Casino Business and Mergers, Asia-Pacific Gaming News, Problem Gambling and Responsible Gambling, UK Gambling Commission -- In Cliff Spiller's eight years with BestOnlineCasinos.com, he's covered the global gaming industry ranging over 5 continents. He started writing gaming guides in 2004 and has written for sites like OnlineUnitedStatesCasinos.com and VegasSlotsOnline.com.

Cliff also wrote the old SlotSystems blog under the name "Chuck Flick", where he exposed scam artists who sold books and e-books that claimed people could beat slot machines. Cliff's articles have been linked by Casino City Times, USA Today, and the old New York Times blog, among others. Cliff lives in the Dallas sururb of McKinney, Texas, where he enjoy games of all sorts, sports, and karaoke. He's a long-suffering Dallas Cowboys fan. email: support@bestonlinecasinos.com.

READ MORE
Comments

Add comment