Czech government prevails in Casino Kartac court case

9 December 2019

The District Court for Prague 1 has ruled in favour of the Czech Republic government in a long-running legal battle with land-based casino operator Casino Kartáč over online roulette.

The case dates back to 2006, when the operator lobbied the Ministry of Finance for the right to operate online roulette in the country. This request was refused, though online gaming regulations were then passed in 2016, and the market opened in 2017.

The refusal prompted Casino Kartáč to file a lawsuit against the Ministry, demanding it repay CZK6.9bn (£227.7m/€270.3m/$299.4m) in estimated lost revenue, plus interest.

The case had previously been dismissed by the District Court, noting that the lost revenue was totally hypothetical. However, the case then progressed to the country’s Supreme Court, which cancelled the decision and ruled that the case had to be reconsidered.

The Prague 1 court, however, ruled in favour of the Ministry of Finance once again. It accepted the argument put forward by the Office for the Representation of the State in Property Affairs (ÚZSVM), representing the government, which argued that the Ministry had acted in accordance with the country’s 2006 laws.

“Despite the fact that this was a protracted dispute lasting more than five years, the courts repeatedly support the Ministry of Finance,” Czech Finance Minister Alena Schillerová said of the outcome.

“I am glad that our lawyers effectively defend the state's interests in these disputes without having to hire expensive external law firms,” ÚZSVM director Kateřina Arajmu added.

Casino Kartáč has previously been involved in disputes with the state, over issues such as limit setting for interactive video lottery terminals and issues with the approval process for advertisements. In each case, the ÚZSVM has successfully defended the government’s position.

It comes as the Czech government prepares to introduce a series of tax changes for gambling in the country. From January next year, lotteries, live casino games and bingo operators will be taxed at 30% of GGR, up from the current rate of 23%, while the rate for fixed odds betting will rise from 23% to 25%.

The additional tax revenue will be used to fund new safeguards for players, including an exclusion register, which is expected to launch by mid-2020. This will allow players to voluntarily block access to online and land-based gambling, while those on welfare, those who are bankrupt and people who have received treatment for gambling addiction will be added to the register automatically.