Betting in Czech Republic

The Czech people are known for their easy-going demeanor and openness to change. They emerged from behind the Iron Curtain during the so-called “Velvet Revolution” of 1989, when the changeover from communism to democracy was accomplished peacefully. In 1993, they parted ways with Slovakia to form their own Republic, which is today home to a population of about 10.4 million citizens.

By all measures, the Czech Republic is today a gambler’s paradise. It ranks #1 overall in Europe among countries with the most land-based gaming operations per capita. According to a recent study, one gambling machine exists for every 200 Czech citizens.

Betting shops, which have been legal for years, can be found all over the country, too. And online sports betting is not only permitted, it is state-sanctioned, with dot-CZ licensing available to bookmakers.

A national lottery has been in place here ever since the Cold War. The state-run gaming operation known as Sazka SA was founded in 1956 and has long dominated the market for betting games, number games and instant lotteries. The operator reportedly contributes 90% of its profits to public organisations and funds.

In 1991, Tipsport came into existence to offer sports betting via fax and telephone. Among the markets it pioneered were international and national football, Formula 1, tennis, American sports, Alpine skiing, golf and boxing, to name but a few. Taxes on its payouts were set by law at 5%.

Soon other bookmakers sprang up to provide local competition, establishing their own lotteries and opening betting shops one after another. Among the most successful early brands were Chance and Fortuna­sázky (aka Fortuna), followed later by Synop Tip.

The 1990s also witnessed a massive expansion in the Czech casino industry. Prague alone is now home to 21 different gaming venues, of which seven come under the Merkur brand. Major casinos can also be found in 30 other Czech cities. What’s more, 19 horseracing tracks are located throughout the country, too.

Concerned about an increase in problem gambling, in 2005 a legislative backlash against liberal gambling policies occurred within the Czech legislature. New laws were passed to limit the number of casinos in the Republic.

It was also determined that online gambling laws would only permit fixed-odds games, such as betting on odds offered by sports bookies, while prohibiting all casino-style online games. Furthermore, the lawmakers decreed that only online sportsbooks registered inside the Czech Republic were allowed to offer services to Czech residents.

Of course, such regulation would prove impossible to enforce. Currently some 474 sports betting web sites accept play from Czech Republic. They include at least 19 Czech-language sites, from foreign bookmakers like Unibet, Expekt, Ladbrokes, Stan James, Betsson and bwin to such dot-CZ sportsbooks as Chance and Tipsport. Moreover, the local currency, the Czech Koruna, is welcomed for deposits and withdrawals by a variety of eWallet providers, including UseMyBank, Click2Pay, NETeller, Entropay, Ukash, ClickandBuy, Ezipay, Moneybookers and more.

A greater danger to stability in the Czech Republic than avid gamblers or enterprising bookmakers may be posed by bumbling state officials. In April of 2011, the Municipal Court of Prague declared lottery operator Sazka SA insolvent, with some $606 million in losses over the course of the past seven years.

Observers are quick to point out that such losses are virtually impossible, given that the lottery enjoys a 94.3% house advantage. They reason that some form of embezzlement or gross ineptitude must be involved, although the courts have yet to rule on the matter. Investigations are ongoing.

With a major source of revenue in grave danger, the Czech government must now consider other options. One of them is the possibility of creating a new system to license and regulate online sportsbooks in the Czech Republic by 2013. It has been rumored that France, a country that recently liberalized its online gambling industry, might serve as a model.

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