Revocation of a gaming hall operating permit

When can a municipality ban gambling throughout its entire territory?

Act No. 186/2016 Coll., on Gambling Games (hereinafter the “Gambling Act”), gives municipalities a relatively wide scope of action. Under Section 12 of the Gambling Act, a municipality may, by a generally binding decree, either restrict the operation of technical games, bingo, live games, or small-scale tournaments to selected places and times, ban them only in certain locations, or ban them completely throughout its entire territory.

The courts consider the choice between these options to be primarily a political decision of the municipal council. The Supreme Administrative Court explicitly confirmed in the cited judgment that a municipality does not have to relate the reasons for a blanket ban to a specific establishment or prove that it is the one causing problems. According to judicial practice, a requirement for such detailed justification would be excessively formalistic.

What happens to an already issued permit if a municipality bans gambling?

Here, it is necessary to connect two provisions of the Gambling Act. According to Section 104c(1)(b), the municipal authority may issue a permit for the location of a gambling space only if it is not in conflict with the currently valid generally binding decree of the municipality. However, as soon as the municipality later changes the decree and completely bans the operation of gambling games at that location, the operator ceases to meet the conditions for the issued permit.

Let's illustrate this with the facts from the cited judgment. A gambling hall operator obtained a permit to locate a gambling space, effective from 14 December 2023 to 14 December 2026. In February 2024, however, the municipal council approved a decree banning gambling games throughout the municipality's territory, effective from 1 June 2024. The municipal authority then initiated ex officio proceedings to revoke the permit for that operator under Section 104f(3)(e) of the Gambling Act and validly revoked the permit. This validly occurred on 29 January 2025, which was still almost two years before the end of the period for which the permit was originally issued.

Does the municipality have to prove that my specific gambling hall is causing the problem?

In similar disputes, operators typically defend themselves by arguing that specific complaints and incidents are related to an establishment other than theirs, and therefore a blanket ban does not pass the proportionality test. However, the Supreme Administrative Court rejected this argument. According to the court, the negative phenomena associated with gambling are systemic in nature and cannot be assessed in isolation for a single gambling hall – leaving one establishment in operation would only shift the problem to its surroundings.

The court also stated that if milder forms of regulation (limiting the number of gambling halls, operating hours) have not proven effective for the municipality in the past, this in itself is a sufficient reason for a complete ban instead of a milder measure. Similar to a blanket ban on prostitution, this is a phenomenon where social harm is presumed regardless of where exactly it takes place.

Therefore, it is not decisive for the municipality to prove that a specific negative phenomenon is caused by one particular gambling hall. If the regulation has a rational basis in the municipality's experience and pursues the legitimate goal of limiting the negative impacts of gambling, even a blanket ban affecting establishments for which individual incidents are not separately documented can stand.

Must the decree account for existing permitted gambling halls?

Another typical argument from operators is that they invested in the gambling hall with the expectation of a return throughout the permit's validity period, and they object to a violation of legitimate expectation and legal certainty. However, the Supreme Administrative Court concluded that the law does not impose an obligation on municipalities to protect such an expectation.

It is sufficient if the decree provides for a reasonable vacatio legis period – that is, the period between the promulgation and the effective date of the decree, during which the addressees can prepare for the new situation. In the case under review, this period was approximately two and a half months.

The permit is revoked without compensation. The operator is not entitled to compensation for lost profits or for investments made in the establishment, even if a substantial part of the period for which the permit was originally issued remained at the date of revocation.

What can I do as an operator?

The complainant in the case under review used the vast majority of conceivable arguments – that the decree was not based on objective and non-discriminatory criteria, that the blanket ban failed the proportionality test, that there was a lack of individualisation for its specific establishment, and that the absence of transitional provisions violated its legitimate expectations. The Supreme Administrative Court rejected all these objections.

The Supreme Administrative Court explicitly stated that the specific form of gambling regulation is based on the political convictions of the elected representatives of the municipality and that the requirement for a detailed justification of the ban "in literally every corner of the municipality's territory" is excessively formalistic. Therefore, the municipality essentially does not have to provide any substantive justification for its stance on gambling at all – the political will of the council is decisive, not the proof of specific problems at a particular establishment. Moreover, the courts approach the review of such regulation with restraint, respecting the municipality's right to self-government.

The real scope for defence therefore remains very narrow. Judgment 4 As 68/2026 effectively confirms as legitimate the substantive nature of the regulation, i.e., whether a municipality may ban gambling throughout its territory without individualised justification.

Potential problems

Conclusion

Judgment 4 As 68/2026 confirms that municipalities have a wide degree of discretion in regulating gambling within their territory, including the option to revoke a previously issued permit for a gambling space if they subsequently impose a blanket ban on gambling. As an operator, you cannot rely on your permit being maintained for its entire validity period, nor on the municipality having to provide you with a transitional period.

Therefore, before opening a gambling hall, I recommend always thoroughly mapping out not only the currently valid regulation in the municipality but also its past approach to gambling and any considerations of tightening the rules in the future. When planning the investment and its return, it is also necessary to account for regulatory risk: even a validly issued permit for several years is no guarantee that you will actually be able to operate the gambling hall for that entire period. The project's economic model should therefore be able to withstand a situation where the municipality restricts or completely bans gambling during the permit's validity, and the investment must be written off earlier than originally anticipated.