Development of Poland’s Gambling Market a Year after Its Regulation - Master Gambling Bonuses

Sunday, April 8, 2018

Development of Poland’s Gambling Market a Year after Its Regulation

Casino News Daily
Development of Poland’s Gambling Market a Year after Its Regulation

Poland’s new gambling law took effect almost precisely a year ago. And while the legislative framework was touted as one that would liberalize the market and provide international operators with attractive opportunities to operate in a regulated environment, the country’s newly formed gambling landscape looked a bit different in reality.

Poland’s Senate passed the country’s new set of gambling rules in late 2016 and these took effect on April 1, 2017. Under the new Polish gambling regulations, interested international online sports betting operators are able to apply for a license from the Finance Ministry. However, by applying, they agree to pay a 12% tax on betting turnover.

Here it is important to note that turnover as a tax base is the worst thing that could happen to a ‘liberalized’ iGaming market. And it can be said that a 12% rate is a bit too high for a country with a population of around 38 million and with a nascent regulated online gambling market.

How has the Polish online gaming and betting market developed during the first year after regulation? Casino News Daily is looking into several factors that are instrumental in shaping one gambling market or another and how these have shaped Poland’s market.

Legal Gambling Options

Poland’s new gambling law allowed for a certain level of expansion within the market. Within the iGaming sector, the Polish government legalized the provision of sports betting, casino games, poker, and bingo. However, of all of the aforementioned, only sports betting was not limited to the state-run operator Totalizator Sportowy. In other words, interested operators are now able to apply for a license from the Finance Ministry and to operate in the country’s regulated market.

Following the regulation of the Polish market, lawmakers announced that Totalizator Sportowy would launch an online casino with different gaming options to service local players. The operator was expected to launch a tender for a technology supplier to power its iGaming operation. However, it was in November when the bidding process finally began.

Prior to the introduction of Poland’s new gambling law, a number of major operators targeted local players in a gray environment. These included William Hill, bet365, and 888. They all flew shortly before the new law came into effect and never entered the country’s regulated market.

While Polish lawmakers believed that the new regulations could turn the country into an attractive regulated destination, some of Europe’s larger gambling companies have not launched operations there. And it seems that they might not be interested to enter the Polish market or at least not for now.

Taxation

Taxation of gambling services is one of the things that could go terribly wrong while a market is undergoing regulation. It can be said that was the case in Poland. Lawmakers, despite their willingness to liberalize the market, approached the taxation matter in a manner that was not particularly friendly toward regulated operations.

As already pointed out, licensed operators are required to pay a 12% tax, with turnover being the tax base. Poland thus became one of relatively few countries to be taxing gaming operations on turnover. Most of the countries opt for gross gambling revenue/yield as a tax base.

It can be said that the 12% rate and the use of turnover as a tax base had a negative effect on the allure of the Polish market to major gambling operators. While there were quite a few international companies to apply for and receive licenses from the Finance Ministry, the giants are still steering away from the market.

Blacklisting

Blacklisting was one of the measures adopted by Polish lawmakers to punish erring operators and cleanse the market from unlicensed operations. The Polish Finance Ministry makes sure to update the blacklist on its website regularly, adding operators that target local players without the necessary authorization.

A total of 1,615 domains have been blocked over the past year, as it can be seen on the Ministry’s official website. It is also interesting to note that major betting operators such as Betsson, Titanbet, and Intertops have been among those blocked. Another important thing that needs to be taken into account is that some of the operators have tried to target local players through multiple domains.

While a list of 1,615 blocked domains may seem quite impressive, opinions were voiced that the crackdown on erring operators has not been as effective as it should have been. According to a recent report by the Polish legal association Graj Legalnie, the list should be updated more regularly and the Finance Ministry should tighten its grip on the country’s unregulated market. Only this way, the Ministry will be able to provide licensed operators with fair competition opportunities and to reduce the country’s unregulated market, the association believes.

Poland’s Gambling Landscape after One Year

According to the Graj Legalnie report, unlicensed betting operators still dominated Poland’s gambling market despite its recent regulation. The association claimed that companies targeting Polish bettors without the necessary license from the Ministry of Finance control 60% of the market.

The report found that an additional of PLN396 million was collected in taxes from licensed operators during the first year after the market’s regulation. However, Graj Legalnie argued that the Finance Ministry could increase that amount to PLN594 million, if it toughens its stance on unlicensed operations.

Polish lawmakers recently announced that despite the high tax rate on licensed gambling services, the country’s regulated space delivered turnover of PLN3.3 billion (approximately $962.6 million) last year, up from PLN1.7 billion recorded in 2016.

Final Thoughts

The turnover figures above show that there clearly is demand for regulated gambling services in Poland. However, if the Finance Ministry wants to establish an ever-growing and effectively regulated market, it will certainly need to consider that there are currently factors that could prevent that from happening.

A 12% tax rate on turnover is a bit too high and has a negative impact on the market’s allure to international operators. And the fact that some of Europe’s largest operators have not taken steps to enter Poland is a good indication that the market might not be that attractive at present. On the other hand, a lower tax and regulations that are equally friendly to both operators and their consumers could help Poland’s gambling market secure a growth; a long-term one.

The post Development of Poland’s Gambling Market a Year after Its Regulation appeared first on Casino News Daily.

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