Lottery’s Komarek feels targeted
The Czechoslovakian government wants to derive more tax revenues from the gaming sector without “driving it out of existence,” according to a recent report on Radio Prague. The proposed new tax regime for gaming expects to reap an extra US $204 million a year in tax revenues starting in 2016.
Yet the country’s Ministry of Finance is considering changes to the tax structure that may actually reduce the tax on sports betting at bookmakers from 30 percent to 25 percent. And the rate on slot machines could be cut from the existing 40 percent to 35 percent.
The tax rate on the Sazka lottery, however, would remain at 30 percent?not good news for Czech billionaire Karel Komarek, owner of the country’s largest lottery operator. Sazka’s profits could decline markedly in the year to come. Its gaming taxes, which totaled $690 million in 2013, could rise to more than a billion crowns when the new rules are enacted.
The average tax rate in the European sector is around 18 percent.
“Sazka itself obviously feels that it is being unfairly victimized,” according to a report on the Radio Prague website. The company points out that lotteries “are not usually the worst offenders in the gaming industry’s hall of shame,” is not as addictive as other kinds of gambling, and does not cause the same kinds of social ills.
The main association representing gaming machine operators, Spelos, had warned the government that a plan to hike the rate to 40 percent, with a 40,000 crown (US $1,600) charge on each machine, would have driven many operators out of business with tax revenues and actually cost the government money.
