Czech Court grants Prague autonomy to regulate gambling independently

The Constitutional Court of the Czech Republic has ruled that Prague’s city districts have the right to independently regulate live gambling, allowing them to ban or restrict gambling activities based on local conditions.

The ruling supports Prague’s 2021 ordinance, which banned slot machines throughout the city while permitting live dealer games like poker and roulette, SBC News reported. It also granted the city’s 57 districts the authority to impose their own restrictions on live gambling. 

The decision was challenged in 2023 by the Ministry of the Interior and the Czech Competition Authority (ÚOHS), which argued that the fragmented regulations were discriminatory, anti-competitive, and violated national standards. As a result, the ministry temporarily suspended the ordinance.

However, the Court rejected these claims, siding with Prague officials who argued their approach complied with the 2016 Gambling Act, which permits municipalities to regulate gambling through local ordinances.

Of Prague’s 57 districts, 41 chose to ban live gambling altogether, while others opted for limited hours of operation. The Court found that these decisions were not arbitrary but based on specific community concerns, including public safety and addiction.

Still, the decision was not unanimous. Justice Milan Hulmák issued a dissenting opinion, criticizing the inconsistency across the city. “I observe no logical or objective factors on Prague’s live gambling regulation map that could justify the complete regulatory divergence between different city regions,” he wrote.

The ruling is expected to have wide-reaching implications for the gambling industry, which now faces a complex regulatory landscape across Prague. The Czech Competition Authority warned that businesses operating in multiple districts will encounter increased compliance costs and legal uncertainty, prompting several gambling licence holders to reassess their locations.

Despite industry concerns, Prague’s City Council welcomed the decision as a victory for local governance and public health. "Standard regulations fail to recognise the distinct qualities of each neighbourhood, as certain districts face severe problems related to gambling addiction and criminal activity," it stated.

In February, the Czech Republic’s Financial Administration (Finanční Správa) uncovered large-scale tax evasion by gambling companies, as per PGRI report. A tax audit of licensed operators for 2021–2022 recovered over CZK 540 million (€22 million/USD25 million). As the state’s tax enforcement body, Finanční Správa targets high-risk sectors such as gambling, banking, and insurance.

Using new methods to analyze gaming data, the agency flagged suspicious transactions and irregular player behavior in casinos. The audit led to an additional tax bill of CZK 340 million (€14 million/ USD16 million), along with penalties for misreported fees and commissions.