Poland’s Brutal New Online Gambling Tax Regime Sparks Mass Operator Exodus

Posted on: March 30, 2017, 04:00h. 

Last updated on: March 30, 2017, 02:18h.

Poland’s new online gambling regime, which is to come into force within days, has prompted a stampede out of the market by operators.

Just this week, major online gambling companies like Betfair, William Hill, Bet356, Pinnacle Sports and Mr Green have abandoned their Polish customers.

Operators leave Polish online gambling market
The new Polish gambling regime was designed to reduce the unregulated market but it was designed badly, say operators, who fled in droves this week. (Image: shutterstock.com)

The mass exodus is in protest of the country’s “liberalized” new gambling laws and the 12 percent tax on operator revenue they bring with them.

We say “protest” but the truth is that operators have little choice but to leave in the face of a tax that is unworkable.

Negative Effect

Usually, online gambling companies are taxed on their gross gambling revenue (GGR), or “net wins,” ie, the difference between the amount of bets received after wins have been paid out to customers. Calls from the country’s parliament to impose a more reasonable 20 percent on GGR fell on deaf ears.

Those who continue to engage with the Polish market without seeking a license will be blacklisted and subject to ISP blocking, according to the amendments to the gambling act.

The stated aim of the legislation, passed last summer, was to bring laws in line with EU regulations and to reduce the country’s citizens’ exposure to the unlicensed market. But as the Remote Gambling Association pointed out shortly after the bill’s enactment, it will achieve the precise opposite of the desired effect.  

“The existing 12 percent turnover tax on sports betting has so far failed to build an attractive regime and it is bound to continue to do so, if not changed,” warned the industry body. “The current turnover system will continue to prevent licensed operators from providing the required level of value and choice to Polish consumers.

“As a result, Polish consumers will continue to seek out better offerings from operators who are licensed outside of Poland and who are not liable to pay tax there. The proposed blocking measures will not stop Polish consumers from doing so, as these measures can be easily circumvented.”  

Hostile Environment

The fleeing operators have largely notified their Polish players that they should withdraw funds in advance of the April 1 deadline, which is when the new regime will come into force, and have told Polish-facing affiliates to remove all advertising and marketing.

UK-based EnergyBet, which also left the market this week, said in a statement that, while it had hoped Polish government would listen to the advice of the EU and other authorities, “the new highly restrictive and hostile regulatory environment [had] made continued operations unviable.”

“The decision to cease offering EnergyBet services to customers is Poland was not taken lightly, and any resulting inconvenience and disappointment is very much regretted,” it said.