Poland to Prosecute Online Gamblers

Posted on: December 1, 2014, 08:00h. 

Last updated on: December 1, 2014, 09:45h.

Polish flag
Poland, whose restrictive online gambling policy has been criticized by the EU, is determined to hunt down and prosecute its biggest online gamblers. (Image: jackieschmidscholarship.org)

The Polish government has warned online gamblers who engage with the offshore, unregulated market that they may be prosecuted, marking the first time authorities in the country have threatened to pursue players as opposed to unlicensed operators.

According to a statement on the Ministry of Finance’s website, the Polish gaming regulator has acquired information about 24,000 players who have participated in “illegal” gambling, including 17,700 who have won a total of PLN 27 million ($8 million). Furthermore, the ministry claims it has already initiated 1,100 criminal investigations against players and aims to prosecute the biggest winners in the country.

Poland has a difficult and complicated relationship with online gambling. In 2009, as the state prepared legislation to revise its gambling laws, the so-called “Blackjack Scandal” broke, which implicated several high-level politicians in attempting to influence the nature of the bill in the gambling industry’s favor for payoffs.

Prime Minister Tusk was forced to fire several ministers and political allies, including Sports Minister Miroslaw Drzewiecki, and the subsequent gambling act punished the gambling industry, imposing sweeping restrictions on brick and mortar casinos and a blanket ban on online gambling.

EU Criticism

The reforms were widely criticized by the European Union as they appeared to contravene Article 56 of the Treaty on the Functioning of the European Union, which deals with the free movement of trade across borders between European Union member states. Under political pressure, Poland modified its gambling act in 2011, permitting online sports betting, but with a cumbersome and restrictive litany of regulations.

All servers must be based in Poland, stated the new regulations, with the corresponding websites carrying the domain endings .pl. Furthermore, all transactions would have to run exclusively through Polish banks and the tax rate was set at 12 percent, which, at the time, was the highest level of any gambling jurisdiction in Europe.

As such, the new regime attracted just four operators, all Polish: Fortuna Entertainment, Milenium, STS and Totolek. The European Union was still unhappy and, in November 2013, sent Poland, along with several other countries, an “official request for information” about its future legislative intentions regarding the restrictiveness of its online gambling policy. 

Reforms Stalled

In June this year the Ministry of Finance drafted an amendment to its gambling act that, if implemented, would remove the need for operators to incorporate a subsidiary within Poland; instead, they would simply be required to maintain a local branch office for tax purposes, a move that would essentially open its borders to any operator from within the EU.

The motion appears to have stalled. Meanwhile, it’s estimated that Poland’s four online operators cater to just nine percent of the country’s online gambling market, which is believed to be worth $1.5 billion a year, and the government is losing an estimated $178 million per year in potential tax revenue to the offshore market.

It’s unfortunate then, that Poland, at least in the short term, is seeking to quash the offshore market not with the legislation that has been proposed but through rather more authoritarian means.