An Overview of the Gambling Act in the Czech Republic

Regulatory System and Administrative Supervision in the Czech Republic

The Czech gambling market is not a free market, but is strictly regulated by the state through several institutions with clearly defined powers. The primary regulator is the Ministry of Finance of the Czech Republic, which issues basic permits for operating gambling games and manages key agendas. The Customs Administration of the Czech Republic then plays a central role in supervising compliance with the law, conducting thousands of inspections annually and identifying a significant number of violations.

In addition, municipal authorities issue permits for the location of gaming premises, and the Financial Analytical Office monitors compliance with obligations in the area of anti-money laundering and counter-terrorist financing.

This segmentation of responsibility means that an operator is not in contact with just one institution, but must simultaneously meet the requirements of several administrative bodies. Each has its own agenda, its own interpretation of the law, and its own sanctioning powers. In practice, this means that a breach of the rules can lead to parallel proceedings by several authorities, which can result in an accumulation of fines and much more serious consequences than the operator might initially think.

Definition of a Gambling Game and Types of Games Under the Law

For an operator to generally understand what the law applies to, it is essential to know its basic definition. A gambling game is defined as a game, bet, or lottery in which a bettor places a stake, the return of which is not guaranteed, and in which the win or loss is decided entirely or partly by chance or an unknown circumstance.

This seemingly simple definition has major practical implications – for example, it also plays a role in deciding whether a particular business activity or marketing campaign with an element of drawing or betting is subject to the law at all. If you are not sure whether a specific product or promotional event already meets the characteristics of a gambling game, a legal assessment within the gambling and lotteries agenda can help.

The law distinguishes between several types of gambling games, some of which have specific requirements depending on the rules. A lottery is a game in which a player bets a certain sum of money and tries to guess the numbers that will be drawn. Typical lotteries in the Czech Republic include Sportka or Euromiliony. For a comparison of licensing approaches across Europe, it may be useful to also refer to our new article How to Obtain a Gambling Licence in the European Union: A Comparison of Individual States.

A fixed-odds bet is a game in which a player predicts the outcome of a certain event and bets on different variants with different odds. A totalisator game is similar to a fixed-odds bet, but differs in that the operator determines the volume of funds designated for winnings in advance. Bingo is played in gaming premises where the prize is either predetermined or set as a percentage of the total stakes.

A technical game, to which the law pays special attention, is a game operated via a technical device directly operated by the bettor – for example, a slot machine, electromechanical roulette, or electromechanical dice. The law has definitively abolished the possibility of placing slot machines in restaurants or at petrol stations; a technical game can only be operated in a legally defined gaming space.

A live game is a game operated without technical devices, typically with a group of people around a gaming table in a casino, and the last category is a tombola – a lottery organised by a legal entity. In practice, this means that if an operator is considering whether a particular activity is a gambling game, they should first answer three questions: (1) is it a game, bet, or lottery, (2) is money or other assets of value staked with a risk of loss, (3) is the outcome decided wholly or partly by chance. If the answer to all three questions is yes, it is a gambling game and is subject to regulation.

Conditions for Operators and the Licence Requirement

The law places high demands on gambling operators from the moment they wish to become an authorised entity. The central principle is that only a legal entity can become a gambling operator – not a natural person without a legal form.

This legal entity must cumulatively meet the following conditions: have its registered office in the Czech Republic, or in another member state of the European Union or a contracting state of the Agreement on the European Economic Area. Furthermore, it must have a transparent organisational and ownership structure and a supervisory body must be established – typically a supervisory board, an administrative board, or another similar body.

One of the most fundamental conditions is proving financial capacity, where the amount of own or share capital must reach CZK 10, 20, or 50 million, depending on the type of gambling game, and its source must be transparent and legitimate.

This means that the authority will verify where the operator obtained the money, whether it comes from criminal activity or simply from a questionable source. In practice, the operator must submit bank statements, documents on the origin of the capital, and often an explanation of how they obtained these funds.

In addition to these general conditions, the operator must also meet specific personal requirements – above all, they must have a clean criminal record and be debt-free (not in arrears with tax or social security payments) and must not have been in insolvency or liquidation in the last three years. Added to this are administratively demanding obligations such as attaching a certificate of a clean criminal record no older than three months and paying a security deposit for each type of gambling game they wish to operate.

The amount of the security deposit varies depending on the type of game. For fixed-odds and totalisator bets on animal races, it is CZK 1 million. For other fixed-odds and totalisator bets that are not operated predominantly online, the deposit is CZK 10 million. For lotteries, technical games, live games, and bingo (if operated predominantly online), the deposit is CZK 50 million. These amounts are not trivial – they are a binding pledge that is returned only if the operator duly fulfils its obligations and gradually ceases operations.

In practice, this means that the decision to enter the gambling business is financially very demanding. An operator needs not only their own capital for the operation itself, but also significant financial resources tied up in security deposits. This leads to the market being entered usually by larger financial players or groups, which increases market stability but at the same time creates a high barrier to entry for smaller entities.

The Basic Permit Granting Process

The procedure an operator must undergo to obtain a permit to operate a gambling game is complex and has several phases. Since 2022, this process has been reformed – instead of a single-phase procedure, the process is now divided into two parts: the so-called initial permit and the basic permit.

The initial permit is the first phase and represents the prerequisites on which the operator demonstrates their competence in terms of financial stability and legal integrity. The operator must first prove that they have sufficient capital, are not insolvent, have a clean criminal record, and that their ownership structure is transparent. This phase should take a reasonable amount of time – the lawyers at ARROWS law firm can assess whether your prerequisites are sufficient and prepare the complete documentation.

The second phase, the basic permit, is the final step for granting the licence. Here, the applicant must meet new requirements for ensuring the safe operation of the business, both from a personnel perspective (employee qualifications) and a technical perspective (security of gaming systems). In practice, this means that the operator must submit a detailed game plan, have certified technical equipment, employees trained in legal compliance, and other documentation.

The Ministry of Finance now places increased emphasis on the precise definition of the subject of the application – that is, a detailed description of each game, bet, or lottery that the company wants to operate. A weak point of many applications is an unclear or incomplete definition, which leads to delays or even rejection. The Ministry of Finance has also issued an appendix with specifications for individual types of gambling games, which applicants should use. This means that the operator must carefully state whether it is, for example, a technical game, a live game, a fixed-odds bet, etc., in accordance with the terminology of the law.

The price for inadequate preparation is high – if the Ministry of Finance rejects the application, the operator must repeat everything and faces a long delay in obtaining the licence, during which competitors are entering the market. The lawyers at ARROWS law firm are well-versed in these matters and can ensure that your application is as well-prepared as possible on the first attempt.

Gaming Space and Physical Requirements

If an operator plans to operate technical games or live games in a gaming hall or casino, they must account for the requirements for physical equipment and location. A gaming space is defined as a separate, structurally divided space in which gambling games can be operated, and only by one operator as its main activity. This means that if an operator rents a room, it cannot be used for office work or a restaurant open to the public, unless it is part of an integrated casino.

The gaming space must have a separate entrance either from the street or from a publicly accessible internal part of the building, for example, from a corridor of an existing building. This is an important requirement, as it prevents the gaming hall or casino from becoming part of a regular shopping centre or restaurant. The municipal authority in whose territorial jurisdiction the gaming space is to be located issues the permit for its location.

The obligation that attracts the most attention in business circles is the duty to monitor the gaming space with a camera system. The operator must ensure that the entire gaming space is monitored for the purpose of: (1) checking that no unauthorised technical games are being operated, (2) protecting players in case of a claim for an unpaid win, (3) monitoring financial flows, (4) checking compliance with the ban on entry for persons under 18 years of age.

In a casino, all gaming tables, cash desks for chip top-ups, cash desks for banknotes and coins, and areas where operations with banknotes and coins take place must also be monitored. The quality requirements for the camera system are also very strict. The operator must ensure that the gaming space is filmed in a minimum quality of 2 Mpix, and in the case of a live game table, in a quality of at least 5 Mpix.

Monitoring must take place in real time throughout the entire operating period in a non-slowed and uninterrupted recording that allows for later reproduction. The recording must be stored for a period of 2 years, including its backup.

In practice, this means that the operator will invest in a professional camera system, which is not a cheap affair. In addition, they must ensure the secure storage of recordings and their protection against unauthorised access. All these aspects must be considered when planning the business.

Furthermore, there are restrictions on advertising in the space. On the building or in the corridor in front of the entrance to the gaming space, there must not be any advertising, messages, symbols typical of gambling games, or any other form of promotion drawing attention to the operation of gambling games or winning a prize.

The entrance to the establishment must be marked only with the words GAMING HALL or CASINO and this marking may only be placed at the entrance; it must not appear on windows or walls.

Register of Excluded Persons and Protection of Minors

One of the pillars of the legal framework is the protection of persons who are not allowed to play gambling games. On the one hand, the law prohibits the participation of persons under 18 years of age. This is a basic rule – no one under 18 is allowed to play, whether in a gaming hall, casino, or online. Although this is a simple prohibition on paper, its practical implementation is more complex.

The second system of protection is the Register of Persons Excluded from Participation in Gambling Games (RVO), which is managed by the Ministry of Finance of the Czech Republic. A person can be entered in the register for three reasons: (1) ex officio – if they are receiving a relevant material need benefit, are in insolvency, or fail to fulfil their maintenance obligation (since 2024, child support defaulters have been added here), (2) voluntarily – a person requests entry themselves to protect themselves from gambling, (3) through a user account of an online game – since January 2024, a player can request entry directly via the internet.

A person registered in the register must not be allowed by the operator into the gaming space and must not be allowed to create or use a user account. The responsibility for checking adherence to this prohibition lies with the operator. This is a key point – the law delegates the duty to monitor the register to the operator, who is responsible if they allow an excluded person to play.

In practice, this means that the operator must be connected to the information system of the Ministry of Finance and check in real time whether a person entering the gaming hall or logging into an online game is in the register. Since 2024, this is a real-time obligation – a technical failure in the connection is not an excuse. For online games, this means that the player's status is verified at every login.

As of 1 January 2022, a means for immediately preventing participation in an online game was introduced, the so-called "panic button". When a player presses this button, they are prevented from participating in the game for 48 hours. This measure primarily concerns online games, where the player gets an immediate 48-hour break after pressing the button. The aim is to provide the player with an emergency brake in case their gambling has gotten out of hand.

Furthermore, there are also mandatory betting limits. For example, in a technical game in a gaming hall, the maximum bet is CZK 100, while in a casino and on the internet it is CZK 1,000. There is also a mandatory 15-minute break after 2 hours of playing technical games.

Tax Obligations and Financial Reporting

A gambling game operator is also a taxpayer of the gambling tax, which is part of the tax system. The tax is calculated as a percentage of the tax base, which is determined as the difference between the stakes received and the winnings paid out. The tax rates for all types of gambling games, with the exception of a tombola with total stakes not exceeding CZK 100,000, are 35 percent.

The exception is a tombola with total stakes up to CZK 100,000, which is exempt from gambling tax. The operator of a tombola with total stakes over CZK 100,000 is a taxpayer of the gambling tax at a rate of 35%.

The tax period is a calendar quarter. This means that the operator must file a gambling tax return every quarter and pay the corresponding tax. The return for the first quarter is filed by 25 April of the given year.

Calculating the tax base is not difficult, but errors do occur in practice. The formula is: stakes minus winnings minus returned stakes equals the tax base. So if players staked CZK 2 million in a game and the operator paid out CZK 1.3 million in winnings, the tax base is CZK 700,000. At a tax rate of 35 percent, the tax is CZK 245,000.

Due to the increased reporting requirements, Decree No. 10/2019 Coll. on the method of reporting and data transmission was also issued. Operators must transmit data about their activities to the central information system of the Ministry of Finance, in a precisely specified format and within certain deadlines. A technical failure in reporting data is not an excuse.

Money Laundering and Anti-Money Laundering Obligations

Recently, regulation in the area of money laundering and terrorist financing has increased. Gambling operators are classified as obliged persons under Act No. 253/2008 Coll. (the AML Act). This means that they are subject to very strict obligations regarding client identification, monitoring of suspicious transactions, and reporting these transactions to the Financial Analytical Office.

The obligation of client identification and due diligence (Know Your Customer, KYC) means that the operator must know their player, know where their money comes from, and monitor whether their behaviour appears suspicious. In the context of gambling, a typical suspicious transaction is a large cash deposit without subsequent play, or a deposit and immediate withdrawal without participating in the game. Behaviour that does not match the player's profile is also considered suspicious – for example, when a user who usually plays for tens of crowns suddenly deposits a million.

If the operator detects a suspicious transaction, they must report it to the Financial Analytical Office without undue delay, usually within 5 calendar days. The report is submitted in an encrypted electronic form, and it is strictly forbidden to inform the client or a third party that a report has been filed (so-called tipping-off). If the operator fails to report a suspicious transaction and the authority later discovers it, they face a crippling penalty for inaction.

Obligations under the AML Act have applied to gambling operators before. From 1 January 2022, the options for remote client identification were specified, including for clients from non-EU countries, for example, through control micropayments (so-called penny drop verification).

GDPR and Protection of Players' Personal Data

Gambling operators process sensitive personal data of players – information about their behaviour, potential addiction, financial stability, and other aspects of their lives. Under EU Regulation 2016/679 (GDPR), operators are responsible for the security of this data and for respecting the rights of data subjects.

A fine for a GDPR violation can reach up to EUR 20 million or 4 percent of the company's total worldwide annual turnover, which is significantly more than the fines under the Gambling Act. The Office for Personal Data Protection (ÚOOÚ) systematically sanctions GDPR violations. In the context of gambling, these typically involve inadequate data security, unauthorised sharing of data with third parties, incorrect handling of data subjects' requests for access to their data, or failure to report security incidents.

A key obligation is to report a security incident to the Office for Personal Data Protection. You have a strict deadline of 72 hours from becoming aware of the incident to report it. If the risk is high (e.g., a leak of passwords or financial data), you must also inform the players themselves.

In practice, this means that the operator must have a data team or an external provider on site who secures player data, conducts security audits, and has processes in place for a security incident. These are not tasks that can be improvised – it is a constant responsibility.

Sanctions for Violating the Law and Risks for Operators

The Czech legal system provides regulators with very powerful tools to sanction violations of the Gambling Act. The most serious violation is operating a gambling game without a permit, especially without an online permit. For unauthorised offering of online gambling, the Ministry of Finance can impose a fine of up to CZK 50 million for a single violation. In the practical history since the law was adopted in 2017, a number of exemplary fines have indeed been imposed on foreign entities that tried to target Czech players without a licence.

Less serious violations, such as breaching the duty to check the register of excluded persons or technical deficiencies in the camera system, are penalised with fines ranging from tens to hundreds of thousands of crowns. In matters of the most serious violations – for example, in the case of repeatedly allowing an excluded person to play or manipulating game results – the Ministry of Finance can go as far as revoking the basic permit, which means the end of gambling operations.In addition to administrative fines, there is also criminal liability. Unauthorised operation of a gambling game is a criminal offence under Section 252a of the Criminal Code (Unauthorised Operation of a Gambling Game). The perpetrators – i.e., specific natural persons such as executive directors or members of the board of directors – face a prison sentence of up to three years. The sentence increases to up to ten years if the act is committed by an organised group or if a large-scale benefit is obtained.

Advertising of Gambling Games and Marketing Regulation

The regulation of advertising and marketing in the gambling sector is also very strict. The basic rules of the game are set out in Act No. 40/1995 Coll., on the Regulation of Advertising, and in the Gambling Act. Every advertisement for a gambling game must, without exception, contain two key pieces of information: (1) a statement about the prohibition of participation of persons under 18 years of age in the given gambling game, (2) a warning in the exact wording: "The Ministry of Finance warns: Participation in a gambling game can lead to addiction!"

This information must be visible and clear to the consumer. This is not a formal addition that can be hidden in small print – lawyers checking compliance with the law will verify that the information is genuinely legible.

Furthermore, advertising must not be targeted at persons under 18 years of age, not even indirectly, for example, by using visual elements, personalities, or music that primarily appeal to a young audience. It is also forbidden to promote an operator who does not have a valid basic permit issued by the Ministry of Finance of the Czech Republic. Advertising must also not present participation in a gambling game as a source of financial means comparable to regular employment or business.

Responsibility for advertising is borne by several entities: (1) the advertiser – the one who ordered the advertisement (typically the gambling operator), (2) the processor – the one who created the advertisement (e.g., a marketing agency, influencer), (3) the disseminator – the one who published the advertisement (e.g., a website operator, television, social network). All three can be fined.

The fine for violating the rules of advertising for gambling games can reach up to CZK 5 million. In the case of operating an illegal game or related serious offences, the sanctions can climb up to CZK 50 million. In practice, this means that everyone involved in the chain of creating and disseminating advertising must be aware of their obligations.

Current Changes and Development of Regulation in 2026

In 2026, Act No. 186/2016 Coll. on Gambling Games has not undergone any major amendment beyond the changes already adopted. The legal framework thus remains the same as in previous years, but some legislative changes approved in previous years are now fully manifesting in practice.

One such change is the automatic cancellation of long-term inactive accounts in online casinos. Licensed online casino operators are obliged to cancel accounts where no activity has been recorded for a period of 24 months. This obligation has been in effect since 1 January 2022, which means that operators have been actively cancelling inactive accounts for several years. In practice, this means that the operator must have technical processes in place that automatically monitor activity on accounts and carry out their cancellation without manual intervention.

Given these ongoing changes and the complexity of the legal framework, it is recommended that gambling operators have a quality external legal advisor at their disposal. The lawyers at ARROWS law firm are well-versed in the field of gambling and can provide clients with long-term legal advice.

Final Summary

The regulation of gambling in the Czech Republic is one of the strictest among business sectors. The key obligations that an operator must follow include meeting high financial and organisational conditions to obtain a licence, building physical infrastructure (gaming premises with a camera system), adhering to betting limits and mandatory breaks, managing the register of excluded persons, fulfilling tax and reporting obligations, complying with GDPR and AML laws, and respecting advertising rules.

The reality is that mistakes are easy to make and their cost is high. The fine for unauthorised operation can be up to CZK 50 million. Losing a licence means the end of the business. A security incident with player data can lead to a GDPR fine calculated as a percentage of global turnover. Bad advertising leads to sanctions.

The lawyers at ARROWS law firm understand these interconnected obligations and their practical impacts. They can help you prepare an application for a permit to operate a gambling game, set up internal compliance processes, secure you during inspections, defend you in case of fines, and provide continuous legal advice. If you want to avoid costly mistakes and ensure safe operation, contact consultation@arws.cz.