Gambling stakeholders in the Czech Republic hope that the government will continue with regulatory changes to banking and customer verification criteria that will enable a smoother entry into the market.
‘Face-to-face’ customer verifications
The Ministry of Finance introduced the requirement for operators to impose ‘face-to-face’ customer verifications at 7,500 approved ‘check-point’ venues following the 2017 amendments to the ‘Czech AML Act’ in conjunction with the introduction of a new ‘Czech Gambling Act’.
The strict measure, alongside taxes of 23 percent GGR on sports betting and 35 percent GGR on online casinos, saw the Czech Republic see the removal of foreign operators from the entire marketplace.
A number of operators, including bet365, Entain Plc (formerly GVC Holdings) and William Hill, left the sector citing ‘unworkable’ terms, adding that enforcement requirements were placed by the Ministry of Finance that were not considered sufficient by any other European market.
The Czech Ministry of Finance supported its measure, stating that in order to fulfill AML duties and concerns about gambling transactions, face-to-face verification was required.
The following years saw the Czech sports betting industry decline to just three domestic incumbents, Tipsport, Fortuna and Synot, with domestic stalwart SAZKA Group leading the lottery market, with foreign incumbents declining to reapply for licences.
5th AML Directive
After three years of regulatory isolation, hope springs again for market reforms in the Czech Republic following the approval of the ‘5th AML Directive’ to modernise the banking and customer compliance requirements of the country.
The Czech Republic will follow ‘remote customer verification’ measures delegated by individual banks in a measure approved by the ‘5th Directive on AML.’
The Czech stakeholders, usually referred to as ‘bank IDs’, hope that the enforcement move would lead to the government easing its cumbersome criteria for face-to-face verification.
The measure was endorsed by Denisa Marcekova, Head of the Czech & Slovak Internet Gambling Association, saying that it was proven to be a successful verification provision in Sweden.
Marcekova said: “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.”