The Institute for Gambling Regulation (IFGR) releases a study that maps the current state of the illegal gambling market in the Czech Republic. The publication, called the Black Book of Illegal Gambling, is the first comprehensive Czech study of its kind and reveals that the issue has much larger dimensions than many experts have previously realized.
The Black Book of Illegal Gambling, as the first of its kind, provides a comprehensive overview of the entire illegal gambling market.
The aim of the Black Book of Illegal Gambling is to present to the public, experts, and relevant regulatory bodies the magnitude of the problem posed by illegal gambling in the Czech Republic, its forms, as well as its causes and risks. Until now, only narrowly focused studies or estimates by regulatory authorities have been available in the Czech market. However, the Black Book of Illegal Gambling, based on surveys, analyses, and other available data, provides a comprehensive overview of the entire market, including brick-and-mortar establishments and the virtual environment.
Illegal operators have no inhibitions, which is why it is essential to employ effective measures against them.
The book describes the forms of illegal gambling and practices of its operators, as well as the current activities undertaken by the IFGR in collaboration with legal operators and government authorities to combat illegal gambling. It also highlights legislative shortcomings and offers possible solutions for addressing illegal gambling. According to the IFGR, software solutions that can automatically detect and document illegal activities should be part of the fight against illegal operators, and the use of artificial intelligence is also being considered. In addition to effective legislation and cooperation with the Customs Administration and the Ministry of Finance, collaboration with technology giants such as Google, Microsoft, Meta, or Seznam is crucial, aiming to simplify blocking and enforcement measures.
The value of the black market reaches 6.6 billion Czech crowns.
The seriousness of the issue is evidenced by the statistics from the IFGR study. The numbers show that the total value of the illegal gambling market in the Czech Republic exceeds 6.6 billion Czech crowns, with annual revenue from illegal online sports betting reaching 1.62 billion CZK and from online technical games reaching 3.74 billion CZK. According to the latest data, illegal gambling accounts for up to 30 percent of the market in the Czech Republic, with up to 47 percent of players gambling with illegal operators online. Furthermore, it is not possible to block advertising websites with links to illegal gambling. Among other things, this is why the Czech Republic lags behind in the number of blocked websites with illegal games, having blocked only 559 since 2017. In comparison, neighboring Poland managed to eliminate nearly 29,000 illegal websites in the same period.
In the land-based sector, which refers to gambling that is not conducted online, the estimated revenue from illegal gambling is 1.1 billion Czech crowns according to the IFGR. In the Czech Republic, 1,155 illegal gambling establishments have been uncovered in recent years, while there are currently only 902 licensed casinos and gambling halls. Illegal operators are often difficult to trace, and fines are therefore nearly unenforceable.
How can the new tax rate affect the development of illegal gambling?
In the context of illegal gambling, IPRH also highlights the current stance of the Ministry of Finance regarding the change in gambling taxation in the Czech Republic. It emphasizes the need for a predictable and stable tax environment. Adjustments to tax rates should only be made based on expert discussion and evaluation of their impact. According to a study by the University of Copenhagen in 2016, the optimal tax rate is 20%. In such a case, up to 80% of players remain engaged in legal gambling activities. This is referred to as the “channeling rate,” which sharply decreases with each tax increase. If the government aims to collect more revenue while protecting players from the black market, it should focus more on combating the flourishing illegal market rather than further taxing an already heavily burdened legal market. Although such a path may appear simpler, easier paths are not always the right ones.
The educational publication is freely available in the main network of national libraries. The Black Book of Illegal Gambling can also be obtained online.
