Czech gambling advertisement developments

As we have previously mentioned on MediaWrites, as of 1 January 2017 a new Gambling Act has come into force in the Czech Republic introducing strict rules for the gambling industry, with the intention of preventing gambling addiction and associated criminality. Alongside the Gambling Act an amendment to the Act No. 40/1995 Coll., on Regulation of Advertisement (Advertisement Act) has also become effective, which now sets out more gambling advertisement restrictions in order to facilitate the intended effect of the Gambling Act.

Craps table
Imagecredit: flickr/creativecommons, Lisa Brewster

Advertisement of licensed gambling was allowed in the Czech Republic before 1 January 2017 and this remains so. However, now the regulation around gambling advertising is divided into two categories: (1) general requirements under the Advertisement Act; and (2) specific requirements under the Gambling Act.

General advertisement requirements

Pursuant to the Advertisement Act, a gambling advertisement must follow a few basic rules:

  • it may not target persons under the age of 18;
  • it may not give the impression that gambling can serve as a source of income;
  • it must clearly state that persons under the age of 18 cannot participate in gambling (Warning); and
  • it must include the following statement: “Ministry of Finance cautions: Participation in gambling may lead to addiction!” (Label).

(together the Requirements)

Advertisement placed on the outside of a gambling venue

The Gambling Act goes beyond the Requirements. Section 66 of the Gambling Act prohibits the gambling operator from placing any gambling advertisement or any kind of promotion for winning opportunities on the outside of the gambling premises or in its publicly accessible interior (e.g. shared hallway with a hotel), including any textual, audio, moving, static, lighting or graphic means of promotion. These requirements basically prohibit the display of any roulette wheel, poker chips, money, jackpot or other gambling related symbols.

The gambling operator is, however, allowed to mark the gambling venue with its name and include the word “Casino” or “Gambling room” in such a display (Mark). According to the documents released by the Ministry of Finance of the Czech Republic (Ministry), the gambling operators are allowed to place the Mark on the exterior of a building, in which gambling premises are located only if the gambling premises have its own separate entrance. Furthermore, according to the Ministry, the Mark may only be placed in close proximity to the entrance in order to comply with Section 66 of the Gambling Act. Therefore, the gambling operators are not allowed to display the Mark on their gambling premises wherever they desire.

Note that the Ministry is not actually the relevant supervisory authority as it may not impose fines for violations of the Gambling Act. The Customs Administration of the Czech Republic (Customs) supervises brick and mortar gambling. For now, it seems that the Customs have adopted the Ministry’s view. The information provided by the Customs is, however, quite general and the gambling industry are hoping for more conclusive guidance from the Ministry.

Note that not all of the gambling operators are affected by Section 66 of the Gambling Act, since the Gambling Act contains a transitional provision in which delay its effectiveness with respect to gambling operators who continue to provide services under licences issued pursuant to the Act No. 202/1990 Coll., on Lotteries and Other Like Games.

Implications of Section 66

While this new provision may seem strict, it still gives the gambling operators plenty of room to promote their businesses.

However, there is a need for clear “rules of the game”, since the below questions are left unanswered by the legislation:

  • Is it mandatory to use the Label even on the gambling premises in which the Mark is used?
  • Is the gambling operator obligated to use the Label and the Warning along with every display that promotes its operation, even inside the gambling premises?
  • May a gambling operator publicly use his registered trademark without the use of the Warning and the Label?
  • What are the legal implications of sponsorship? Is the use of sponsors’ logos allowed or do the Label and Warning have to be displayed alongside the sponsor’s logos?

Furthermore, sponsoring ought to be addressed by the supervisory authorities, since based on some interpretations, if an operator displays the logo of a sponsor who is also a gambling operator, the Label and the Warning need to be included as well. One has to ask: Was it really the intention of the Ministry to regulate gambling sponsorships and the use of gambling trademarks more strictly than that related to tobacco products?

Answering the above questions seems crucial, since gambling operators need to prepare a change in marketing strategies and if done poorly, it may have severe implications for the gambling operator’s revenues. Additionally, a fine of up to CZK 5,000,000 may be imposed for breach of the Requirements.

It will certainly be interesting to see how the Advertisement Act’s provisions will be tackled by the supervisory authorities. It would seem rather excessive to use the Label and the Warning alongside every public display of gambling operator’s trademark. However, since many gambling operators actually sponsor sports teams, we may find out the supervisory authorities’ opinion quite soon…

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