The current global situation caused by the coronavirus pandemic is fundamentally affecting the social life and economies of most countries. The Czech Republic and our neighbours Slovakia are no exception. Nowadays, the main effort of every state is to ensure the protection of the health of its inhabitants and to save the affected economy. States’ approaches to achieving this vary. Both the Czech Republic and Slovakia took very strict restrictive measures, basically reducing their economies to a minimum. In order to recover the economy, they are taking several compensatory measures to support entrepreneurs. Therefore, we have prepared for you a summary of the current situation and a basic overview of the measures offered.
Czech Republic
Current Situation
In the Czech Republic, the state of emergency was declared, and the free movement of people is limited to the most necessary trips – to work, to buy food or to take care of seniors. It is forbidden to travel abroad freely.
- The Government published a five-phase plan for the gradual opening of operations yesterday, when the last phase should be completed on 8 June 2020. Gambling establishments and casinos should be opened gradually according to their size – 200m2, 1000m2, shopping centres respectively, and to the change in the number of infected people under strict sanitary measures (e.g. 2m distance between players, disinfection, use of masks and gloves).
- The total ban on the operation of gambling establishments, casinos and betting offices has been effective since 14 March 2020
- The sale of lottery tickets and the acceptance of betting slips in newsagent’s are allowed.
- Internet operation is not limited, but as a result of the suspension of sports events, operators of fixed-odds betting have seen a significant decline in their sales.
- Online casino operation increased by about 20%.
- Professional sports competitions could be allowed in early June, but without spectators.
- Tourism will probably return to the Czech Republic only after the summer holidays. The situation in the neighbouring states will be decisive. Therefore, even after the opening of gambling establishments and casinos, the return to normal sales will be gradual, as foreign players make up a significant proportion of visitors to these premises.
- Significant restructuring of the land-based industry is expected, which has been gradually recovering from the very strict new gambling law for three years and has stopped generating revenue as a result of the current situation. Many operators will have great difficulties in surviving this period.
Basic Overview of Offered Measures
Tax reliefs – the Ministry of Finance adopted the so-called liberalization package containing several tax reliefs.
-
- For our industry, the most useful option will be to ask the tax office to defer the payment of gambling tax for several months or to pay it in instalments. However, it is necessary to prove the economic situation of the company.
- Other measures include especially:
- extension of the deadline for filing tax returns by three months,
- suspension of electronic records of each revenue
- remission of the June advance on corporate income tax
- The institute requires the remission of the fixed amount of gambling tax (the so-called minimum partial tax), which is paid for technical devices in gambling establishments and casinos. We believe that it is unconstitutional for the state to levy a tax on technical devices that cannot be operated by virtue of its decision.
- State measures to support entrepreneurs
-
- The State has declared that they will reimburse 80% of the labour costs to operators who had to close their business premises but only up to EUR 1,450. However, it is rather 65%, because operators still must pay mandatory employment insurance.
- The state offers a one-off contribution of EUR 930 for the self-employed.
- The state has launched several compensation programs in the form of interest-free loans with a bank guarantee of the state, but currently gambling operators are excluded from their drawing. Therefore, the Institute communicates with the relevant ministries to include the gambling industry in these programs as well. We are trying to convince them that operators are ready to take a few sanitary measures to protect players and their staff (use of rubber gloves, distances between players, more frequent disinfection of gambling establishments, casinos, technical devices, etc.)
- Deferral of rent payments in closed premises up to three months.
- Deferral of repayment of loan instalments of three or six months.
- Through our Institute for Gambling Regulation, we asked the Ministry of Finance to suspend their reporting obligations and postpone the launch of the Register of excluded Persons. We are awaiting the MoF’s response.
Slovakia
Current Situation
Like in the Czech Republic, the state of emergency has been declared in Slovakia and the free movement of people is limited to the most necessary trips – to work, to buy food or to take care of seniors. It is forbidden to travel abroad freely. Therefore, the restructuring of the land-based environment as in the Czech Republic can also be expected.
- Total ban on the operation of gambling establishments and casinos – since 13 March 2020 until further notice.
- Betting offices remain open.
- Due to the very limited range of online casino games (the regulator has not allowed more of them so far), it is not expected that the loss of land-based revenues will be replaced in the online environment.
- Next week, the Government will publish the plan for the gradual opening of closed operations.
Basic Overview of Offered Measures
The State will pay 80% of the employee’s salary to companies whose operations are mandatorily closed, but only up to EUR 1,100.
- The self-employed will receive a contribution according to a decrease in company revenues from EUR 180 (20% decrease) to EUR 540 (80% decrease).
- The state will allocate bank guarantees of € 500 million per month. As in the Czech Republic, operators are excluded from the current program.
- The tax relief mainly concerns the:
- postponement of filing the tax return
- deferral of advances on income tax when sales decrease by more than 40%, which will have to be settled by March 2021
- deferral of the payment of income tax for the last year while the pandemic lasts
- suspension of tax controls, proceedings and tax execution
- The state plans to introduce a deferral of loan repayment up to 9 months.
