Prostitution in the Czech Republic is not illegal, but organized prostitution (brothels, prostitution rings, pimping etc) is prohibited. The enforcement of these laws, however, can be lax. Ever since the Czechoslovakian Velvet Revolution (1989) led to the creation of the two independent states Czech Republic and Slovakia, prostitution has been flourishing, and has contributed its share to the region's booming tourist economy. It is widespread in Prague and areas near the Republic's western borders with Germany and Austria. In 2002, the Czech Statistical Bureau estimated the trade to be worth six billion crowns ($217 million) a year. Current estimates indicate there are 10,000 to 25,000 prostitutes in the country. In Prague, the city's third district (Praha 3), immediately east of the center, is home to much of the city's sex industry. As of January 2008, prostitutes could be found in the local Czech classifieds newspapers for approximately 1,000 crowns per hour.
According to the Czech Ministry of the Interior, there are over 860 brothels in the Czech Republic, of which 200 are in Prague. Most of the country's prostitution centers in the Northern Bohemia and Western Bohemia regions and in the capital city. Brothels line the country's roads to Austria and Germany, the source of many customers. Weekend trips to Prague for some tourists also include visits to erotic clubs. There are almost 200 websites for prostitution services in the Czech Republic, up from 45 in 1997, which enable sex tourists to book their travel and appointments to buy sex acts before they leave home. Prague has the world's first online brothel, Big Sister, where customers get free sex with the sex acts being broadcast on the internet.
The Czech Republic is a source, transit, and destination country for women and children trafficked from Ukraine, Russia, Belarus, Moldova, Lithuania, Romania, Bulgaria, Slovakia, China, and Vietnam into and through the Czech Republic mainly for the purpose of sexual exploitation. Czech victims and those transiting the country are trafficked to Western Europe and the United States, sometimes via third countries. Internal trafficking occurs from low employment areas to Prague and regions bordering Germany and Austria. Ethnic Roma women are at the highest risk for internal trafficking, and almost always are trafficked by a relative or someone known to them previously.
The Government of the Czech Republic fully complies with the minimum standards for the elimination of trafficking. In 2004, the Czech Government strengthened its anti-trafficking legislation and turned its pilot victim assistance program into a nationwide government-funded program. While enforcement statistics improved during the reporting period, sentences imposed on traffickers remained low.
The Czech police increased its capacity to investigate and convict traffickers over the reporting period, although the overall numbers of cases prosecuted pursuant to anti-trafficking legislation remained low and sentences imposed remained weak. Amendments to the Czech Penal Code went into effect in November 2004 making all forms of trafficking illegal, including labor exploitation and internal trafficking. Maximum trafficking penalties were increased from 12 to 15 years, with a minimum penalty of two years. In 2004, Czech authorities investigated 30 individuals and prosecuted 19 under the trafficking statutes. The courts convicted 12 traffickers under those statutes, an increase from five in 2003. Of the 12 convicted, three received unconditional prison sentences of three to five years, and nine received conditional or suspended sentences. Police training curricula included segments on trafficking, and a new internal website for police provided trafficking awareness information. While no government officials were indicted or convicted for complicity in trafficking, allegations continued about the involvement of individual border police officers facilitating illegal border crossings. Czech law enforcement conducted joint anti-trafficking investigations with Germany, Slovakia, Austria, Poland, and Ukraine in 2004.
The Czech Government continued to improve trafficking protection and assistance over the last year. In November 2004, the Model of Support and Protection of Victims of Trafficking in Persons was expanded to a permanent, government-funded program that is open to all foreign and Czech victims. This program involves close cooperation between the government and NGOs, and allows the victims a 30day reflection period to receive assistance and consider whether to assist in prosecuting their traffickers. From January 2004 to January 2005, 14 trafficking victims — including one forced labor victim — took part in the program. Many victims chose to apply for asylum, which allows them legal status in the Czech Republic until their cases are decided — a process involving months to years. The government houses victims and potential victims applying for asylum with other at-risk groups in guarded asylum centers to prevent unwanted contact with traffickers. The government funded several NGOs and international organizations for sheltering and care of victims; two of the Czech Republic’s principal organizations provided shelter to 68 trafficking victims in 2004.
The Ministry of Interior is currently collaborating with IOM to produce a demand-reduction campaign targeting clients of commercial sex outlets along the Czech-German border area. A government-fund-ed NGO conducted awareness campaigns among potential trafficking victims at schools and asylum centers. The Ministry of Foreign Affairs continued to provide trafficking information to applicants for Czech visas from identified trafficking source countries. The Crime Prevention Department continued awareness programs at schools. In addition to the Czech National Action Plan on trafficking adopted in 2003, the government in July 2004 adopted a plan to combat commercial sexual abuse of children.
Prostitutes in the Czech Republic work in a legal gray area, neither explicitly legal nor illegal, which makes it tough for the state to control disease, the sex-slave trade and underage prostitution.
The Czech government has attempted to legalize and regulate prostitution, but these efforts have failed.
In 2005, the Czech government approved a law to license prostitutes and confine the trade to certain areas as part of an effort to curb prostitution and reduce organized crime.. However, the law needed the approval of the parliament and the parliament failed to approve it.
"The assumption is that it is unrealistic to effectively ban prostitution," the ministry proposal said. "It is only possible ... to set rules so the public does not perceive prostitution as a serious public order problem or health risk."
The plan called for prostitutes to buy licenses, undergo monthly health checks, pay taxes and have health insurance. Annual licenses would have only be issued to Czechs and other European Union nationals older than 18 who had no criminal record. It would have been illegal to operate without a license, and those who refused to register would have been prosecuted and would have faced fines. Soliciting sex would have been banned near schools, playgrounds, churches and cemeteries.
The general opinion is that while prostitution should be legal and sex workers registered, politicians seem unwilling to take a stand and many doubt that workers would register in the first place.  UK police superintendent John Mottram, working as an advisor to the Czech government on organised crime, said that the interior ministry in Prague does not see prostitution as a priority. "Unfortunately, they are not devoting the kind of attention to it which I think they should."
Opposition to the Czech government's plan to legalize prostitution came from a group of international human-rights activists representing diverse political and philosophical positions. 110 signatories for organizations representing millions of members sent a letter to Czech President Václav Klaus and other government officials, urging them to reconsider.
We are writing to express our profound concern over the prospect that the Czech Republic may be planning to legalize prostitution ... We believe that such action would be a terrible mistake for the country as a whole and, in particular, for the women and children of the Eastern Europe region who will be victims of the Czech Republic sex trade ... We are certain that legalizing prostitution within the Czech Republic will not curb abuses such as child prostitution and enslaving sex trafficking. Organized crime controls the "industry" and, in a legalized regime, it will have an enhanced capacity to do so ... Brothels are sexual gulags for women and girls ... A decision to accommodate traffickers, pimps, and organized crime's slave trade in girls and women [is] an act unworthy of Czechs' traditions of fighting for their own freedom. It is an act we will resist with every democratic means available to us, and will fight in Congress and our legislatures, through our organized women's movements and from tens of thousands of church and synagogue pulpits. At a minimum, we are determined that our efforts will in financial terms alone, be more costly to the Republic — and not in terms of tourism alone — than any hypothetical financial gains claimed. We close by urging you to reject the calls for legalization that sully the reputation of the Czech Republic and dishonor its history. Please take a leadership role in resisting the trade in women and children and please, in a manner consistent with your traditions, maintain the Republic as a model for human rights and democracy.