Prominent online gambling site and sports book William Hill has withdrawn from the Czech Republic market as the result of new internet gambling laws that took effect at the turn of the New Year. In an e-mail to affiliates last week, William Hill indicated that it may ramp back up in the Czech Republic sometime in the future.
Here is the e-mail, as sent to William Hill affiliates:
We would like to inform you, that following recent regulatory developments in The Czech Republic, William Hill will cease to accept business from customers in The Czech Republic. This means, that none of William Hill’s products will be available in The Czech Republic, though players will be able to withdraw from their existing account balances. Furthermore, affiliates are required to remove all marketing materials from their websites (including banners, text links, etc.) that relate to Czech Republic bettors. We value your cooperation and contribution and though William Hill is obliged to cease to accept business from customers in The Czech Republic, for the time being, we are confident that we will have the opportunity to work together in the future. In the meantime, if you require any help or assistance on this matter, please don’t hesitate to contact your affiliate manager…
The “regulatory developments” likely have to do with the new gambling law, signed by Czech President Miloš Zeman in July 2016, which require operators based in the European Union to acquire Czech online gaming licenses in order to offer their services to Czech residents. As William Hill does not have one – there seem to be only eleven operators that do – it decided not to run afoul of the country’s new law. The letter quoted above seems to imply that the company feels confident that it will obtain a license at some point.
It is entirely possible, though, that William Hill and other major operators won’t seek licenses, though, as the tax structure implemented by the new gambling law is extremely punitive. Licensed internet gaming operators will now be taxed 35 percent of gross gaming revenues from any game that uses a random number generator. Naturally, this includes poker in addition to casino games like blackjack and roulette. Sports betting and lottery revenues are taxed at 23 percent. On top of that, the operators still have to pay a 19 percent corporate income tax rate.
Many, if not most, operators will find this taxation way too prohibitive to make it worth getting back into the country. The tax rate was no accident, either. Czech Finance Minister Andrej Babiš, the man who originally introduced the new online gambling bill in 2014, is very anti-online gambling, but rather than try to ban it and leave players without protections and the government without the tax revenue, he decided to just tax the industry out the wazoo. His idea was that such a high tax rate will keep operators away and he will get his wish of no internet gambling, anyway.
Of course, it could backfire on him and just encourage residents of the country to frequent unregulated sites, increasing their risk and keeping money out of the government’s coffers, anyway.
