Prague’s Districts Gain the Authority to Regulate Live Gaming Autonomously

The ruling enables Prague’s autonomous administrative bodies to adopt a more flexible approach in addressing concerns linked to gambling addiction and public order. This measure is expected to enhance the security and transparency of the RMG sector.

Local Interests as a Top Priority

The legal challenge stemmed from a 2021 directive that banned slot machine operations across the capital while permitting live dealer games, including roulette and poker. Additionally, the regulation empowered Prague’s 57 administrative districts to impose tailored limitations based on local conditions.

In 2023, the initiative faced opposition from the state’s Ministry of the Interior and ÚOHS, which contended that the measure contravened competition principles and uniform legal standards.

However, the Court dismissed these claims, ruling that the regulation aligned with the 2016 Gambling Act, which grants municipalities the authority to implement localised gaming rules.

The current situation in Prague:

• 41 districts have imposed a total ban on live dealer content;
• the remaining areas have introduced restricted operating hours for the segment.

These measures are driven by objective factors, such as:

• public complaints;
• risks associated with problem gambling;
• safety concerns in certain districts.

New Level of Liability for Entrepreneurs

The Court’s ruling has led to legal fragmentation, complicating business operations for entrepreneurs working across multiple districts. Companies must navigate varying local regulations, ensuring compliance with distinct requirements in each area.

This situation results in higher expenses related to:

• legal services;
• licensing;
• interaction with municipal authorities.

As a consequence, some brands are reassessing their operations and contemplating withdrawal from the most rigorously regulated districts where restrictions pose significant barriers to profitability.

Earlier this year, the state’s Financial Administration conducted an audit, uncovering widespread tax violations in the sector during 2021–2022. At the time, the country’s treasury received over CZK 540 million ($25 million), yet an additional CZK 340 million ($16 million) remained uncollected. The entities involved faced fines for incorrectly reported fees.

A crucial aspect of the investigation was the use of advanced analytics, focusing on suspicious transactions and irregular player behaviour to detect financial discrepancies.

Flexible Regulatory Approach

Despite objections from gambling industry representatives, the City Council of Prague endorsed the Court’s ruling, asserting that uniform federal regulations fail to account for the unique conditions of separate districts.

Certain areas of the capital are experiencing an escalating issue of ludomania and gambling-associated criminal activity. A flexible regulatory approach enables authorities to address these challenges more precisely and effectively, tailoring measures to local circumstances.

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