Czech Financial Administration discovers major tax evasion in gambling sector
The body says its audit of gambling businesses prevented a loss of around €22m.
Czech Republic.- The Financial Administration of the Czech Republic (Finanční Správa) has reported that it has discovered major tax evasion by gambling businesses. Its tax audit of Czech gambling licensees for 2021 to 2022 has 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.
Director Otakar Sladkovský said: “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.
“Gambling is a specific industry with high tax revenue, and therefore, it is important for us to minimise the space for illegal practices through systematic activity. This success shows that our efforts have a real impact on market fairness and tax collection.”
In 2023, the Czech Republic made amendments to its Gambling Act to allow online live dealer games and introduce a mandatory “panic button” feature for both land-based gaming and online gambling. It also hiked the gambling tax rate for verticals excluding lotteries and casino from 23 to 30 per cent of gross gaming revenue (GGR).
The tax exemption limit for player winnings was reduced from CZK 1m (€40,000) to CZK 50,000, (€2,000). The tax rate for online and land-based casinos remains at 35 per cent of GGR.
Meanwhile, the gambling sector trade group the Institute for the Regulation of Gambling (IPRH) says it has found major inconsistencies in data on unlicensed gambling in the Czech Republic. It called on the government to provide clarification of the figures provided by the customs agency CELNI SPRAVA, which suggested that black market gambling represented only 5 per cent of the country’s total betting volume of CZK 54bn (€2.1bn) in 2022. The IPRH’s own estimate is that unlicensed gambling represents at least 30 per cent of the Czech gambling market.
