Czech Republic recovers $22.71 million in gambling tax audit

The Financial Administration of the Czech Republic (Finanční Správa) has uncovered CZK 540 million ($22.71 million) in tax evasion by gambling-related businesses, following a tax audit of Czech gambling licenses for the period 2021–2022.  

The investigation, which leveraged new gaming data analysis, identified suspicious financial flows and irregular player behavior in casinos, resulting in an additional tax assessment of CZK 340 million ($14.30 million), along with further financial obligations due to misreported fees and commissions.

"Our goal is clear – to protect fair entrepreneurs and ensure that everyone pays taxes according to the same rules," said Otakar Sladkovský, Director of the Specialized Tax Office. "This case is proof that modern analytical tools and the careful work of our inspectors bring concrete results."  

The audit aligns with broader government efforts to tighten tax compliance in high-risk sectors, including banking, insurance, and gambling.  

As part of ongoing reforms, the Czech Chamber of Deputies has amended the Gambling Act and the Act on Gambling Tax, introducing several key changes:  

• Increased taxes: The tax rate on gambling activities (excluding lotteries and land-based casinos) rose from 23% to 30% of gross gaming revenue (GGR). Online and land-based casinos remain taxed at 35%.  

• Lower tax-exempt winnings: The tax exemption threshold for player winnings dropped from CZK 1 million (€40,000) to CZK 50,000 (€2,000), effective February 15, 2024.  

• Streamlined licensing for EU operators: Regulatory changes now make it easier for EU-based foreign businesses to obtain Czech gambling licenses.  

Finanční Správa has committed to increased monitoring of gambling licenses to curb tax evasion and unregulated financial activities in the sector.  

"Gambling is a specific industry with high tax revenue, and therefore, it is important for us to minimize the space for illegal practices through systematic activities," Sladkovský said. "This success shows that our efforts have a real impact on market fairness and tax collection."