Czech Tax Authorities Recover €22m from Gambling Sector

Tax Evasion Uncovered in Czech Gambling Industry

The Financial Administration of the Czech Republic (Finanční Správa) has identified significant tax evasion within the country’s gambling sector, recovering CZK 540 million (€22 million) in unpaid taxes from licensees operating between 2021 and 2022.

The tax agency, which conducts audits in high-risk sectors such as gambling, banking, and insurance, attributed this success to enhanced analytical tools used to detect financial irregularities and suspicious player activity.

As a result of the investigation, Czech gambling operators faced an additional tax assessment of CZK 340 million (€14 million), along with further financial obligations tied to misreported fees and commissions.

“Our goal is clear: to protect fair entrepreneurs and ensure that everyone pays taxes according to the same rules. This case is proof that modern analytical tools and the careful work of our inspectors give concrete results”, stated Otakar Sladkovský, director of Finanční Správa.

He also highlighted the sector’s high tax revenue and the necessity of continuous oversight to minimize illegal practices.

Regulatory Changes and Tax Increases

In recent years, the Czech government has implemented several regulatory measures to tighten oversight of the gambling industry. In 2023, amendments to the Gambling Act introduced online live dealer games and a mandatory “panic button” feature for both land-based and online gambling.

Additionally, tax rates for gambling operators were increased, with rates for verticals other than lotteries and casinos rising from 23% to 30% of gross gaming revenue (GGR). The tax on online and land-based casinos remains at 35% of GGR, while the threshold for tax-free player winnings was lowered from CZK 1 million (€40,000) to CZK 50,000 (€2,000).

Discrepancies in Black Market Gambling Estimates

Amid these regulatory efforts, concerns remain about the size of the unlicensed gambling market in the Czech Republic. The gambling industry trade group, the Institute for the Regulation of Gambling (IPRH), has challenged official data from the customs agency CELNI SPRAVA, which estimated that black market gambling accounted for just 5% of the total betting volume of CZK 54 billion (€2.1 billion) in 2022. According to IPRH, the actual figure is closer to 30%, prompting calls for greater transparency from the government regarding its methodology for assessing illegal gambling activity.