We are proud to announce that Jan Řehola will be among the speakers of the “Focus on recent developments in Eastern Europe” panel at the CEEGC 2016 which will take place in Budapest on the 20th of September 2016.
A seminar type conference which is designed to encourage a Pan-European dialogue and create an in-depth report of the Central, Eastern and Northern European markets, with an additional Balkans gambling market overview allowing operators and suppliers to monetize the value of their reputations.
Jan will be the key speaker about “Focus on Czech Republic – New Gambling act. – Gambling reform – License application process” topic which is embeded in the “Focus on recent developments in Eastern Europe”.
Jan Řehola has over 6 years of experiences in gambling field, both from the public and private sector.
He is a master of Law from the Charles University in Prague.
Jan has been working for 4 years for the Ministry of Finance – Czech Gambling regulator, firstly as a Head of the Legal Unit and later as a Director of Gambling Department. In his work for the Czech Gambling regulator Jan was responsible for all gambling policy issues, including drafting of new legislation, issuing of gambling licences and cooperation with other European regulators as a member of European Commission Expert Group on Online Gambling.
Due to his background, he is well versed in all aspects of gambling operations.
Now he is a private consultant specialized in gambling and one of the founders of BetOnSkill Consulting, Ltd.
BetOnSkill Consulting, Ltd. is a private company specialised in providing a full service international gaming consultancy to all sectors of the gaming industry (legal consultancy, product development, licensing process, authorisation process). Its team is formed with very experienced people with rich experiences in gambling industry and practice from private and public sector. This helps their clients to operate successfully in the gaming field. BetOnSkill’s clients are mainly gambling companies pursuing licence in Central and Eastern European countries which are helped in the process of accreditation, certification, licensing and operation.
In a recent interview in our EEGReport Magazine, Jan explained the current state of the Czech market and the process of its liberalization starting from January 2017. Below you will find a short preview of the interview, which you can read in full by accessing the online version of the magazine here.
EEGaming(Zoltan Tundik): The Czech Republic’s online gambling sector has been the debate for a long while now, what are the recent developments and is it likely to be enabled for foreign operators to apply for licensing in the next few years?
Jan Řehola: Gambling is a popular form of entertainment in the Czech Republic. According to official results of Czech gambling market for 2014 the whole market grew by 11,4 % over the previous year and similar numbers for upcoming years are predicted. Not surprisingly this grow is mainly driven by online gambling sector however nowadays only two types of online gambling are legal in the Czech Republic. Current gambling act, which is more than 25 years old, is considered to be out-of-date. This applies especially when it comes to online gambling regulation, which is absolutely insufficient and too restrictive for operators. At present, the Ministry of Finance issues online licenses only for sport betting and poker games operators. The first licenses were granted to five major domestic betting operators, SAZKA, Synot Tip, Chance, Tipsport and Fortuna in 2008 and since then, the number of licensees has increased and the revenue share from online betting has increased steadily.
This time, when general trend is moving gaming on internet the absence of online gambling regulation is absolutely the main weakest point of current legislation.
Another big issue is need to ensure compatibility with European law and principles of the Court of Justice of the European Union. The European Commission for a long time warmed the Czech Republic that current regulatory framework does not reflect the fundamental freedoms of the Treaty on the Functioning of the EU and finally decided to launch infringement procedure in November 2013 together with Belgium, Cyprus, Lithuania, Poland and Romania. The main reason is the seat requirement breaching the freedom to movement of services. As the result of this requirement, foreign operators cannot ask for licence and are considered to be illegal. At the same time Czech Government is not able to effectively fight against operators that are established in other EEA countries and which are offerings its services to Czech customers.
Both above mentioned notes leave local operators wholy unable to compete with unlicensed operators who can offer Czech consumers a full range of gambling products.
So now we are in the situation, that both sides – regulator and licensed operators – welcome necessary changes and call for new complete regulatory framework that would enable them to offer all online products and set reasonable level of taxation. Ministry of Finance finally prepared draft of completely new gambling regulation represented mainly by Gambling act and Gambling tax act.
Drafts of these Acts were already approved by Government and now are discussed within the Parliament. Once new legislation is adopted the situation described is corrected. Online gambling will be for the first time explicitly regulated and EU/EEA based operators will be able to obtain a licence to offer online gaming in the Czech Republic. This opens the door for foreign operators to set up a business in the Czech Republic.
What we can see now is unanimous call for duly adoption of new Gambling act. Gambling reform is among top priority of two leading political parties (ANO and Social Democrats) so it can be assumed that act would be finally approved and published already during summer 2016. Since its publication in collection of laws license application process within the Ministry of Finance will be started. If this process goes smoothly as is planned by Czech Government new licences should be valid form January 1, 2017.
If we look more into detail of the text itself, it can be conclude that draft of new gambling act can be considered as modern gambling codex with only few peculiarities from gambling acts recently successfully adopted in Bulgaria or Denmark. Draft was already notified to the European Commission so no substantial changes to text can be expected with exemption of some minor changes that would reflect comments of European Commission and Malta within notification period.
I am quite optimistic and in accordance with Czech Government believe that draft will be finally approved in summer 2016 and first licenses would be issued before end of this year. The biggest open question is building up of monitoring system and preparation of secondary technical regulations. Government announced to open public tender for building up and implementation of central monitoring system but originally proposed time schedule was not reached. On the other hand actual wording of draft presumes that licensing procedure could be open regardless of whether the monitoring system will be ready or not.
EEGaming(Zoltan Tundik): The Czech love to gamble, how would you rate the percentage by niche (sports betting, casino, poker) and could you explain why is online gambling a huge piece of pie for taxes?
Jan Řehola: First of all it must be noted that by far most popular games of chance and biggest market share has so called “technical games” represented mainly by land based slots machines and VLT’s. Figures are not always easily comparable due to different definition among particular jurisdictions but without ambition to be 100% precise it can be conclude that sector of technical games in the Czech Republic when it comes to per capita spend is second biggest in the world after Australia. The Czech Republic is 10 million people country with 56 000 VLT’s in place not counting traditional slot machine. Very popular is also sport-betting, especially in its online form replace traditional brick and mortar betting stores. According to official statistics of the Ministry of Finance for 2014, the percentage rates on GGR are following:
- Technical games (VLT’s and slots) – 58,7 %
- Sport betting – online – 10,6 %, landbased 5,6 %
- Casino games – 6,93 %
- Poker games (online) – 7,8 %
- Lotteries – 15,65 %
As I have mentioned, online gambling is not now regulated by gambling act and the only games that can be legally played online are sport betting and poker games. After adoption of new Gambling act huge transformation of the market share towards online products can be expected as we have already experienced this with sport betting after online sport-betting legalization in 2008.
Be sure to save the date and secure your ticket to the CEEGC 2016 Budapest, which will be held on the 20th of September 2016 at the Hilton Westend City Budapest Hotel in order to hear the fresh and recent information Jan Řehola is going to discuss. The “Focus on recent developments in Eastern Europe” panel is going to start 10:00 AM(Hungary local time).
The conference provides an efficient way of meeting new and prospect clients in the special networking session and sit down lunch.
Special reports and exclusive updates will be given by the top 20 speakers of the industry and the event is limited to 150 delegates to maximize the engagement among the peers.
The tickets can be purchased at an Early Bird rate of €200 by the end of July.
Should you have any questions, please don’t hesitate to contact us on +40 735 559 234 or by mail on firstname.lastname@example.org.
WE LOOK FORWARD TO SEEING YOU IN BUDAPEST!
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