The Czech Republic’s Financial Authority, Finanční Správa, has uncovered large-scale tax evasion by gambling operators, preventing budget losses of over CZK 540 million (approximately €22 million).
The Authority is the Czech government’s agency for tax enforcement and prevention of tax evasion. Finanční Správa is responsible for carrying out specialised tax audits in high-risk sectors such as banking, insurance and gambling.
Last week, Finanční Správa announced that it had completed a tax audit of Czech gambling licenses for 2021–2022. The investigation resulted in an additional tax assessment of CZK 340 million (EUR 14 million), as well as additional financial liabilities due to incorrectly reported fees and commissions.
The shortfalls were discovered thanks to Finanční Správa’s use of new gaming data analysis, which revealed suspicious financial flows and inappropriate player behavior in casinos.
In 2023, the Czech Chamber of Deputies amended the Czech Gambling Act and the accompanying Gambling Tax Act.
For Czech consumers, Finanční Správa aims to protect honest business by ensuring a fair market environment while securing tax revenues from the gambling sector.
“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 bring concrete results,” said Otakar Sladkovský, Director of the Specialized Tax Office.
Recent amendments to the Gambling Tax Act have brought significant changes to the taxation and regulation of the gambling industry. The tax rate for gambling activities, excluding lotteries and land-based casinos, has been increased from 23% to 30% of gross gaming revenue (GGR), while the tax rate for online and land-based casinos has remained unchanged at 35%.
In addition, from 15 February 2024, the tax exemption limit on player winnings has been significantly reduced from CZK 1 million (EUR 40,000) to CZK 50,000 (EUR 2,000).
To further regulate the market, licensing procedures have been simplified in 2024, making it easier for EU companies to provide gambling services in the Czech Republic.
Finanční Správa will continue its increased monitoring of Czech gambling licenses. As Sladkovský stated: “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 activities. This success shows that our efforts have a real impact on market fairness and tax collection.”
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