EGBA supports changes to Polish Sports Betting Taxation

The European Gaming and Betting Association have said that they are in favour of proposed changes that Poland’s legislators are recommending to the Ministry of Finance. The cross-party committee want to see reform to the way in which gambling is taxed in the country. The committee that is made up of members of the Sejm, Poland’s lower house, believe the current legislation is repressing the sector.

The committee has submitted a proposal calling for the Ministry of Finance to move away from taxing turnover. Instead, they want taxation to be in line with that of most other European countries where Gross Gambling Revenue (GGR) is taxed.

The EGBA has said that it believes that replacing Poland’s turnover-based tax for online sports with a revenue-based tax would act as an incentive for Polish players to use websites that are licensed in Poland. In addition, the EGBA says that this would reduce players using offshore gambling sites and generate more tax revenues for the Polish Treasury.

In a statement on their website, Martin Haifer, Secretary-General of The EGBA, said “EGBA welcomes the ongoing discussions on the future of Poland’s online gambling regulation and supports changes to the tax base for online sports betting. The current turnover tax is punitively high and not conducive to a viable online gambling market that meets the needs and expectations of Polish players. Poland is a large gambling market and has a great love for sports, and a sensible GGR-based tax would be an incentive for virtually all Polish players to play with regulated websites and for more of Europe’s betting companies, including EGBA members, to consider applying for an online sports betting license. These companies would not only support Polish sports through sponsorships and other revenues, but also pay gaming taxes and contribute to a more viable market which is attractive to Polish bettors and offers them a safe and regulated environment to play in.”

Professor Konrad Rackowski, who is Poland’s former Finance Minister, has published a paper in which he says the changes would create a more viable and attractive online sports betting market. The EGBA supports changes to the way in which gambling is taxed in the country. A cross-party committee has now urged the Ministry of Finance to implement the recommendations.

Currently, Poland taxes online sports betting at 12% of total turnover, equating to between 55 and 65% as a GGR tax. This makes Poland one of the countries levying the highest taxation on online sports betting within the EU. Professor Rackowski says that only two out of twenty of the country’s licensed sports betting companies were profitable.  As a result, a fifth of Polish bettors use websites that are not licensed or regulated in Poland. This means that the Treasury is missing out on potential tax revenues.

After Andrzej Duda’s PiS (Law and Justice) party were elected, Polish online gambling was radically reformed. Up until 2016, Polish online casinos and sports betting platforms operated in a liberalised online gambling market. However, the market was remodelled in 2017 after the Treasury was sanctioned to implement drastic changes to the country’s gambling codes. They imposed the 12% turnover tax and limited the activities of the state monopoly, Totalizator Sportowy.

The changes to the law meant that in order to have a license to operate in the country, online providers had to have a physical presence in Poland. Additionally, they had to provide the Ministry of Finance with databases containing details of their players. This resulted in many international online operators withdrawing from the Polish market. Those companies included bet365, Bwin, Olympic Entertainment Group and William Hill.

The Polish sportsbook trade association, PIFBRiB, suggests that a flat rate of around 20% on sportsbook GGR would be appropriate. Professor Rackowski believes that this would achieve a real decrease in the size of the grey market in Poland’s bookmaking sector.