Czech Republic faces rising losses from unlicensed gambling

A newly published analytical report has renewed debate over the scale and impact of unlicensed gambling in the Czech Republic, warning that the state may be losing billions of koruna in public revenue each year due to illegal operators targeting local players. The findings raise economic regulatory and social concerns while highlighting the growing sophistication of the black market and the challenges faced by authorities in enforcing existing gambling laws.

The research suggests that a significant portion of Czech gambling activity is taking place outside the regulated system despite the existence of a licensed market framework. According to the report, these unlicensed operations deprive the state and municipalities of substantial tax income while exposing players to legal and financial risks.

Estimated losses from unlicensed gambling activity

The report estimates that the Czech Republic is forfeiting more than CZK330m per month which is equivalent to approximately €13.6m in tax revenue as a result of unlicensed gambling. On an annual basis the figures become even more significant. The analysis suggests that Czech gamblers lose around CZK14.5bn each year through illegal gambling platforms.

Based on these losses the report estimates that the national government is missing between CZK2.9bn and CZK3.6bn in tax revenue every year. In addition municipalities are estimated to be losing up to CZK500m annually. These figures relate only to direct gambling taxes and do not include additional indirect losses associated with employment income tax or social contributions that would otherwise be generated by licensed operators.

The report cautions that the real financial impact may be even higher. Illegal gambling undermines the broader tax system by diverting economic activity into unregulated channels where neither corporate nor employee related taxes are collected. This erosion of the tax base has long term implications for public finances and public services.

Research background and analytical contributors

The findings are drawn from the 2026 Black Book of Illegal Gambling which combines sociological research with economic analysis. The sociological component was conducted by Robert Klobuck of the Sociological Institute at the Slovak Academy of Sciences. His research focuses on player behaviour awareness levels and the reasons why individuals may end up gambling on unlicensed platforms.

The economic analysis was prepared by the Centre for Economic and Market Analysis which assessed the fiscal impact of illegal gambling activity on the Czech economy. By combining behavioural data with financial modelling the report aims to provide a comprehensive overview of the scale of the issue and its consequences for the public sector.

Awareness gaps among Czech players

One of the report’s key findings is that a substantial number of Czech players may not be fully aware that they are using unlicensed gambling services. According to the research approximately 400,000 Czech players knowingly use unlicensed platforms. A further 400,000 players are unsure whether the operator they use is legally licensed in the Czech Republic.

This lack of clarity is attributed to a combination of factors including aggressive marketing practices by illegal operators and the visual similarity of unlicensed websites to legitimate licensed platforms. The report suggests that branding payment options and language localisation are often used to create a false sense of legitimacy among players.

Search engine data cited in the report indicates the popularity of illegal brands among Czech users. The three most searched unlicensed gambling brands were queried more than 111,000 times in a single month from Czech internet browsers. This level of online interest highlights the scale of exposure and the difficulty of preventing access through traditional enforcement measures alone.

Size of the unlicensed market compared with licensed operators

The Czech Republic currently has 27 licensed gambling operators authorised to offer services under national law. Despite this regulated framework the report claims that as many as 1,113 unlicensed brands are actively targeting Czech players.

This disparity illustrates the challenge faced by regulators in controlling cross border online gambling. Many unlicensed operators are based outside the European Union or in jurisdictions with limited regulatory cooperation. As a result enforcement actions such as fines or licence revocations are not applicable and blocking access often requires technical and financial cooperation.

The report argues that the scale of the unlicensed market creates unfair competition for licensed operators who comply with taxation consumer protection and responsible gambling requirements. Licensed companies are required to contribute to public finances and implement player protection measures while illegal operators face none of these obligations.

Economic implications for public services

Aleš Rod chief executive of the Centre for Economic and Market Analysis emphasised the broader economic consequences of illegal gambling. He said: “Illegal gambling is not only a social problem, but a fundamental economic problem. This uncollected public revenue obviously has its cost. It could finance sports, culture, addiction prevention, reduce debt or remain in the pockets of taxpayers if it stayed in the official economy with legal operators. Instead, it ends up in the hands of anonymous operators beyond the reach of Czech authorities in tax havens.”

His comments underline the opportunity cost associated with lost gambling taxes. The report notes that regulated gambling revenue in the Czech Republic is partially earmarked for public interest purposes including sport cultural activities and addiction prevention programmes. When revenue is diverted to illegal operators these funding streams are weakened.

The report also points out that illegal gambling profits often leave the domestic economy entirely. Funds are transferred to foreign entities with limited transparency reducing the overall economic multiplier effect that would otherwise benefit local employment and investment.

Marketing power of illegal operators

Another concern raised in the report is the financial strength of unlicensed gambling operators. Without the burden of taxation or compliance costs these companies are able to achieve higher profit margins. According to the analysis this financial advantage allows them to invest heavily in marketing and promotional activity.

Aggressive advertising strategies including online search optimisation social media promotions and affiliate marketing enable illegal operators to increase visibility among Czech players. The report warns that this creates a self reinforcing cycle where higher profits fund more marketing which in turn attracts more players.

The report suggests that this imbalance makes it increasingly difficult for licensed operators to compete for market share even when they offer safer and legally compliant services.

Calls for stronger regulatory action

The Institute for the Regulation of Gambling has responded to the report by calling for enhanced government action against the black market. Director Jan Řehola stated that existing repressive measures are insufficient on their own to address the scale of illegal gambling activity.

He argued that authorities should focus on improving technological tools to block illegal websites more effectively. In addition he highlighted the need for closer cooperation with banks and payment service providers to disrupt financial transactions between Czech players and unlicensed operators.

The report supports this position noting that payment blocking and real time monitoring could significantly reduce the accessibility of illegal gambling services. However it also acknowledges that such measures require careful implementation to avoid unintended consequences for legitimate financial activity.

Legal and policy considerations

The report adopts a cautious tone when discussing enforcement responsibilities and does not attribute wrongdoing to any specific named operator beyond the general category of unlicensed brands. This approach reflects the legal complexity surrounding online gambling and cross border jurisdiction.

The analysis suggests that future policy responses should balance enforcement with consumer education. Improving public awareness of licensed operators and the risks associated with illegal gambling could help reduce demand for unlicensed services.

At the same time the report recognises that enforcement alone cannot eliminate the black market entirely. Continuous monitoring international cooperation and adaptive regulatory frameworks are identified as essential components of any long term strategy.

Conclusion and outlook

The 2026 Black Book of Illegal Gambling presents a detailed and concerning picture of the unlicensed gambling landscape in the Czech Republic. With billions of koruna in estimated annual losses and hundreds of thousands of players involved the issue represents both a fiscal and regulatory challenge.

The report’s findings suggest that without additional measures the gap between licensed and unlicensed gambling activity may continue to widen. Addressing this imbalance will require coordinated action across regulatory technological financial and educational domains.

While the report does not propose specific legislative changes it provides a data driven foundation for further policy discussion. As the Czech Republic continues to refine its gambling regulation framework the scale of the black market highlighted in this analysis is likely to remain a central issue for policymakers regulators and industry stakeholders.

FAQs

What is unlicensed gambling in the Czech Republic?
Unlicensed gambling refers to gambling services offered to Czech players by operators that do not hold a valid national licence and are not subject to Czech regulatory oversight.

How much tax revenue is the Czech Republic estimated to lose?
The report estimates annual losses of between CZK2.9bn and CZK3.6bn in national tax revenue with additional losses for municipalities.

How many Czech players use unlicensed gambling platforms?
Around 400,000 players knowingly use unlicensed platforms while another 400,000 are uncertain about the legal status of the operators they use.

Why do players use illegal gambling websites?
Players may be drawn by aggressive marketing bonus offers or lack of awareness about which operators are legally licensed in the Czech Republic.

How many licensed gambling operators exist in the Czech Republic?
There are currently 27 licensed gambling operators authorised to operate under Czech law.

How large is the unlicensed gambling market?
The report claims that more than 1,100 unlicensed brands actively target Czech players online.

What risks do unlicensed operators pose to players?
Unlicensed operators are not required to follow consumer protection rules responsible gambling standards or dispute resolution mechanisms.

What actions are regulators calling for?
Regulators are calling for improved website blocking tools and stronger cooperation with banks and payment service providers.

Why is illegal gambling an economic problem?
Illegal gambling diverts taxable revenue away from the state and municipalities reducing funding for public services and social programmes.

Can illegal gambling be fully eliminated?
The report suggests that while complete elimination is unlikely a combination of enforcement education and international cooperation can significantly reduce its impact.