Czech lower house approves tax rise for slot machines

Czechs spent 138 billion crowns ($5.8 billion), equal to around 3.5 percent of annual economic output, on gambling in 2014, more than half of it on mechanical and video slot machines.

Besides the boost for state revenue, estimated by the Finance Ministry to be around 1.5 billion crowns annually, the bill's aim is to reduce gambling addiction. A second bill will set stricter rules for the use of slot machines and video-lottery terminals.

The gambling market is led by a handful of domestic firms, including Prague-listed Fortuna Entertainment Group which focuses on sports betting. Slot machine operators criticised the higher taxation on their segment.

The tax on slot machines will be raised to 35 percent from 28 percent, while all other areas like sport betting or lotteries would remain taxed at 23 percent.

This taxation is on top of the regular corporate tax rate of 19 percent. The bill, which must still be approved by the Senate, was originally meant to take effect this January but ran into delays.

The Czech market will also be open to foreign online betting companies, while giving the Finance Ministry the authority to shut down a betting website deemed illegal.