Gambling companies who hope to run operations in the Czech Republic have been given cause for optimism in recent days after a new administrative development.

The gambling sector in the east European nation will  be hoping that the Czech government will continue with their proposed regulatory adjustments to both banking and customer verification requirements across the industry, in the hope that this will make it easier for new operators to enter the currently restricted Czech gambling market.

Back in 2017, significant amendments to the rules around Anti Money Laundering (AML) along with the controversial new Czech Gambling Act, caused consternation in the betting sector. The Ministry of Finance enforced a controversial new requirement that asked operators to impose ‘face-to-face’ customer verifications at around 7,500 authorised ‘check-point’ venues.

The stringent measure, which was combined with taxes on the industry of of 23% GGR on sports betting and 35% GGR across all Czech online casinos, saw the Czech Republic witness the marketplace withdrawal of a host of foreign operators.

A significant number of gambling operators including bet365, Entain (which was formerly known as GVC) and William Hill left the market stating that conditions in the sector had become unworkable. Their complaints included the argument that the Ministry of Finance had imposed compliance requirements that had not been considered appropriate in any other European market.

At the time, the Czech Ministry of Finance stood firm on the measure, stating that face-to-face verifications were essential in order to fulfil AML obligations and other concerns with regards to gambling transactions.

With foreign incumbents subsequently declining to reapply for licences, the subsequent years have seen a decline in the Czech sports betting market which has been reduced to only three domestic incumbents. Tipsport, Fortuna and Synot make up the market, while the Czech lottery sector is dominated by the SAZKA Group.

But after three years in effective regulatory isolation, there is rewnewed hope for a revival in the Czech market with the approval of the new directive on AML, which seeks to bring modernisation to the country’s customer compliance and banking rules. As part of the 5th Directive on AML, the country is set to adopt alternative remote customer verification measures that have been created by by individual banks within the country.

Known more commonly as bank IDs, these new compliance tools could give the government the freedom to relax its existing face-to-face verification requirements. Speaking about the development, Denisa Marcekova, who heads the Czech and Slovak Internet Gambling Association, offered the Association’s public support and said that the bank ID method had been shown to provide effective verification when it was used in Sweden:

“I strongly believe this is a significant step in the right direction. I hope that the recently launched governmental review of the Czech gambling regulation will result in even smoother access to the market in the near future.”

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