EGBA calls for a flat tax rate based on gross gambling revenue as the popularity of the unregulated market grows among Portuguese gamblers
The European Gaming and Betting Association (EGBA) has urged the government of Portugal to review the nation’s gambling tax regime as the “discriminatory” tax on online gambling has affected player channelization.
EGBA’s call comes shortly after news emerged that the government of the southern European country has assembled a special working group that was tasked with analyzing Portugal’s regulated online gambling market and assessing whether the current tax rules needed revision.
The working group had a month to present lawmakers with their findings, but there has not been much information about the results of the group’s review more than a month after its initiation, and it seems the review is yet to be completed.
Under Portugal’s gambling law from 2015, online sports betting services are taxed at between 8% and 16% on betting turnover, while online casino games are taxed at between 15% and 30% on gross gaming revenue.
In a Monday statement, EGBA’s Secretary General, Maarten Haijer, said that Portugal’s online gambling tax regime is “discriminatory because it applies a more favourable tax for some operators, whilst others have to pay a much higher tax based on a broader tax base.” Mr. Haijer went on to explain that the current tax rules have made the nation a less attractive destination for international online gaming and betting companies.
Portugal’s gambling regulator, Serviço de Regulação Inspeção de Jogos (SRIJ), issued the first license under the nation’s new regulatory regime in May 2016. The agency has granted 15 more licenses since then.
EGBA noted that only one of its members – French gambling group Betclic – holds a license in Portugal, but that more would be interested to enter the local market if the country moves to introduce a “non-discriminatory and better suited” tax regime.
Portugal’s Discriminatory Tax Affects Player Channelization
According to a recent study by Universidade NOVA de Lisboa and Qdata, 75% of Portugal’s gamblers opted for the products offered on the country’s unregulated market in 2018, up 10% from the previous year.
The President of the Portuguese Online Gambling and Betting Association – Associação Portuguesa de Apostas e Jogos Online (APAJO) – Gabino Oliveira, has told local news outlet Dinheiro Vivo that the lack of proper tools for the prevention of the growth of the unregulated market and of restrictions preventing unlicensed operators from easily advertising their products across social media, different websites, or even in taxi cabs is one of the pressing issues that require urgent addressing.
EGBA has added that the player channelization has also been affected by the high taxes and the use of turnover as a base for taxing online sports betting services. The association advised that Portugal should consider the use of revenue as a tax base, similarly to most regulated EU jurisdictions, and introduce a flat rate for all regulated services.
Portuguese legislators proposed late last year the introduction of a flat 25% online gambling tax on gross gambling revenue. However, the proposal did not gain enough momentum to take effect and replace the current regime.
A review of the country’s gambling rules is long overdue as the government has originally promised that such a review of the law would be initiated precisely two years after the issuance of the first license. As mentioned above, SRIJ awarded the first permission for the provision of regulated services to local gamblers in May 2016.
It is to be seen whether the Portuguese government would succumb to growing pressure for changes.
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