Czech Republic Struggles to Collect Unlicensed Online Gambling Fines

Tuesday, October 30th, 2018 | Written by April Bergman
Czech Republic Struggles to Collect Unlicensed Online Gambling Fines

The Czech Republic is struggling to collect fines from unlicensed online gambling operators who accept play from Czech residents. The Czech Finance Ministry has been able to collect only one-fifth of 1% of the fines it has imposed on unlicensed operators.

On 1 January 2017, new online gambling regulations came into force in the Czech Republic. Since then, the Finance Ministry has collected about $10,000 of a reported $20 million-plus in fines imposed on illegal operators.

Czech media group E15 published that the Foreign Ministry imposed US$20.4 million on companies in a total of 24 fines. Of those huge fines, which averaged nearly a million dollars apiece, the ministry has been able to collect only $10,750 total.

The ministry’s lack of collection resources is seen by the Czech media as the reason behind the poor showing. For that reason, E15 has criticized the government for its lack of tools to enforce the law.

Finance Ministry on Caribbean Operators

In response, the Finance Ministry acknowledged the difficulty in forcing “operators based in the Caribbean, for example” to send money to the ministry. Czech officials have no authority to visit those Caribbean islands and force payment.

Government officials said the fines are important in barring rogue operators from entering the legal and licensed Czech online gambling industry. If any of those operators ever seek a Czech gaming license, the ministry can point to the unpaid fines and tell the operators they need to make good with the Czech people.

The anonymous Finance Ministry official said, “The main purpose of the fines is not the enrichment of the Treasury, but the restriction of the illegal offer of gambling. Fines have not only a restrictive but also a preventative effect.”

According to critics, the Finance Ministry should have imposed more fines in the past 22 months. The official blacklist only contains 116 operators, when the full list of unlicensed operators who sign up real money Czech gamblers is much larger.

Trends in European Gaming Enforcement

The lack of a full blacklist is seen by media critics as a sign that government officials are not interested in a serious restriction on rogue gambling operators. The public critics might be missing something, though.

Since the new regulations went into effect, Switzerland held a plebiscite which gave Swiss authorities the right to block illegal operators’ websites. If a Swiss official tells a Swiss Internet service provider (ISP) to block an illegal online gambling site, then the ISP has to block the domain.

The nation of Georgia is taking similar steps. By the end of the year, Georgia claims it will block the domains of unlicensed illegal operators. Albania is considering a similar policy on a more limited scale.

Domain Block on Rogue Czech Operators?

The Czech Finance Ministry could be claiming powerlessness with the intention of eventually asking for authority to take active steps to block unlicensed domains. Gaming officials in a European country naturally are going to know about industry trends in other European nations.

Of course, the Czech media also could be advocating for similar policies. Since E15 is deriding the Finance Ministry’s lack of tools to enforce the law, E15 might agitate for the Czech parliament to give the ministry more resources. A domain block is a likely option.

Thus, gaming operators in the Czech Republic — either licensed or unlicensed ones — cannot expect the Finance Ministry to remain dormant on the issue forever. As the licensed operators see their unlicensed rivals able to sign up players without paying taxes, you can expect them to become more vocal about the basic unfairness of the situation.