partypoker Withdraws from Czech Republic, Expects to Return
Thursday was not a particularly fun day for partypoker customers in the Czech Republic. Envisioning a fun – and hopefully profitable – session of online poker, players logged into their accounts only to find out that they are no longer allowed to play. Fortunately, it was not because of anything they did wrong, but because partypoker is withdrawing, at least temporarily, from the Czech market in response to the recent changes in the country’s gambling laws.
It was Czech poker site PokerArena that first shined a light on the issue yesterday, posting a screenshot of the message players were greeted with upon trying to access the tables from the Czech Republic:
You are either registered in or logged in from a jurisdiction where we do not allow the use of our product. If you want more information, or want to access your account, please contact Customer Care.
Many players unaware of the new legal environment for gambling were likely quite confused by the message. Upon contacting customer service one member of the PokerArena forum received a clearer answer (apologies for any translation quirks):
We would like to inform you that Party Poker has applied for a license under the new legislation in the Czech Republic. This application license is currently being dealt with and we are in regular contact with the Czech authorities. Despite some delays on the part of the Czech authorities are convinced that It will soon be granted a permit us to operate in the Czech Republic, and until we have a new license, just to let you know.
Currently we comply with the restrictions mandated by the Czech authorities to close your account. Please note that remain available for all options. We look forward to you we can welcome you back at Party Poker, as soon as we will be granted a license.
In July 2016, Czech President Miloš Zeman signed the new gambling regulations into law and they took effect on January 1st of this year. The key takeaway to the new rules: online gambling operators must be issued a license by Czech authorities to operate in the country. Rather than risk punishment, partypoker has opted to pull out of the country for now while it waits for a license.
It would not be surprising if only a handful of operators even apply for licenses. The regulations were created by Czech Finance Minister Andrej Babiš, who is flagrantly anti-online gambling. So why would he introduce a bill to regulate internet gambling? Odds are (no pun intended), he didn’t want to encourage people to flee to unregulated, black market sites without consumer protections. But to discourage operators from joining the party in the first place (again, no pun intended), he set the tax rates extremely high. Licensed operators will be taxed 35 percent (down from his desired 40 percent) on games like poker that use a random number generator. On top of that, they will still be hit with the country’s 19 percent corporate income tax. Sports betting and lottery revenues are taxed at a 23 percent rate.
There is a good chance that smaller operators won’t be able to handle that kind of taxation, leaving larger ones like partypoker to potentially dominate the market.
Speaking of which, PokerStars launched its new Czech site, PokerStars.CZ, on Thursday after becoming the first international online poker site to be granted a Czech gaming license.
“We are very happy and proud to offer our products to Czech players. Being awarded this license underscores our commitment to supporting local regulations and obtaining local licenses wherever possible,” said Eric Hollreiser, Vice President of Corporate Communications for Amaya Inc. and PokerStars, in a press release.
There are some quirks in the new Czech gaming laws, one of which prohibits PokerStars from having guaranteed prize pools for tournaments, but for the most part, PokerStars will offer the usual types of games. To start, the only casino games offered will be Classic Blackjack, Premium Blackjack, European Roulette and Double Ball Roulette, but PokerStars expects more to be on the way once they are approved by regulators.
Players are not allowed to make inter-account transfers, so PokerStars customers have to withdraw their funds from their .COM accounts, create a new .CZ account, and re-deposit.
partypoker is not the first major online gaming operator to withdraw from the Czech Republic following the implementation of the new gambling laws. At the beginning of the year, UK stalwart William Hill announced it was out, as well.
William Hill did imply that a Czech license is at least possible, if not expecting, telling affiliate in an e-mail, “….though William Hill is obliged to cease to accept business from customers in The Czech Republic, for the time being, we are confident that we will have the opportunity to work together in the future.”