Czech Gambling Operator Sues Government for Damages

Not having clarity in Czech gambling laws may come at a high price for the government, and we aren’t just talking about lost tax revenues.

Although the new regulations are already in the works, this won’t affect the case brought against the Ministry of Finance by domestic gambling operator Casino Kartac Group, claiming that the practice of awarding licenses to some online gambling companies while denying it to Czech internet casino operators has been completely inconsistent and chaotic.

The court agreed that current laws did not provide the Ministry with the legal backing to allow some online sportsbooks in the Czech Republic, while rejecting applications for other types of online gambling.

Casino Kartac Group is now demanding EUR 100 million in damages due to lost profits.

It remains to be seen just what amount the court will award. It is worth, however, to draw a brief comparison with Hungary.

When Budapest lawmakers passed a law requiring a EUR 350,000 annual concession fee from licensed operators (as well as various taxes), the gambling industry was up in arms, claiming that profitability can never be achieved under these conditions.

It is really difficult to see how such a disparity between profit claims could exist in two markets of a roughly similar size. In other words: someone’s got to be lying.

Regardless of the amount, though, this will be a valuable lesson for governments that apply an arbitrary approach to online gambling regulations. It also demonstrates that requiring operators to obtain a domestic license must be accompanied by clear and fair procedures.