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First Fine Imposed on Poker Tournament Organizers in the Czech Republic

31 May 2012. The first fine of 40 thousand Czech crowns ($2,000) was imposed by the local tax authority on the organizers of the poker tournaments held in the towns Přerov and Uničov, Czech Republic. The fine is based on the controversial new lottery legislation.

Background of the Dispute

According to the New Czech Lottery Act, effective since 1 January 2012, and the interpretation of the Czech Ministry of Finance, poker is considered to be a game of chance and therefore subject to the lottery regulations. The organizers of poker tournaments must be licensed by the Ministry of Finance. However it is practically unreachable for smaller poker play rooms, as, apart from other conditions, they must make a principal of 20 million Czech crowns (a million U.S. dollars).

However the organizers of the poker tournaments argue that poker is a game of skill and therefore not subject to the new regulation or the lottery act in general and thus the fine is groundless. They are going to appeal and defend/prove that the poker is a game of skill at as high as the Czech Constitutional Court of Law if they will be forced to.

The very similar dispute of the nature of poker has been already brought before courts on European level, whereas the French and Swedish courts have ruled in the favor of the players. If will be interesting to follow the resolution in the Czech Republic.

History and Future of (Czech) Poker

The popularity of poker has been increasing rapidly all over the world. In the Czech Republic the boom started in the year 2006. Poker is played among friends, in local poker clubs or universities. Televisions broadcast live million-dollar poker tournaments. Best players become celebrities. We actually have one: the Czech player Martin Staszko finished second on the last year's WSOP.

Poker attracts good players, not gamblers. The gambler relies on their luck only. The good or excellent poker player must know the game perfectly, have background in psychology (the ability to watch and predict play of opponents), math and statistics. That, imho, speaks against poker being considered as game of chance (as according to the Czech Lottery Act). Luck does not last forever and the good player can neither rely on it, nor to build the long-term success based on it.

Online Poker Issue

Another issue that has not yet been solved in the Czech Republic is playing poker over the Internet. It is an opportunity for the players to fight through or qualify for generous live poker tournaments with a minimum fee. Unfortunately the current legislation stops that. The biggest poker rooms are run by foreign companies that do not have the license of the Czech Ministry of Finance. Moreover they cannot even obtain one due to discriminatory nature of the new Czech lottery legislation.

A brand new lottery act (to be effective from 2013) is being prepared and shall enable the foreign betting companies to get the Czech lottery license. On the other side the act presents more conditions or constraints, such as the necessity to found a stone branch in the Czech Republic, which very likely do not comply with primary EU legislation (free movement of services).

Additionally players themselves are not allowed to participate in the games organized by the companies without the licence and there is no Czech (or licensed) online poker ground existing in the Czech Republic. Even if one is created – there are rumors that domestic betting companies are in preparation of their own project "CZ Poker" (therefore they were accused of lobbying to ban the foreign companies) – the players doubt they can bring comparable comfort and sufficient amount of online poker players as the Czech market is rather small.