Poland’s Ministry of Finance is under pressure from Members of Parliament to review how gambling tax is structured in the country. A cross-party committee has expressed concern over the current legislation and is looking to rekindle the licensed bookmaking sector of the economy. They want to see more income generated but believe the current taxation system is repressing growth in the industry.
The cross-party committee is compiled of members of Sejm. Sejm is the lower house of the national legislature of Poland. The committee represents Polish consumers and entrepreneurship. It has submitted a proposal calling on the Ministry of Finance to “abandon the 12% turnover tax applied to sports betting”.
The committee wants the country to adopt the tax system favoured by most EU member states. The standard system applied across the EU to tax gambling services is based on Gross Gambling Revenue (GGR). Poland’s current system is on total turnover.
The European Betting and Gambling Association are supportive of the move, and in a statement on their website, Martin Haijer, Secretary-General, 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.”
Between 2011 and 2016, a liberalised online gambling market operated for betting and online casinos in Poland. However, following the election of Andrzej Duda’s PiS (Law and Justice Party) to Government, the sector was radically overhauled. As a result, the Treasury was sanctioned to implement radical reforms to Poland’s gambling codes. This led to the remodelling of the makeup of the market in 2017. The changes included the imposition of a 12% turnover tax across all the gambling verticals in the sports betting market. As a result, the activities of online casino gaming were restricted and the domain of the state monopoly in the sector, Totalizator Sportowy, was limited.
The changes in the legislation post-2017 required all licensed operators to have a physical presence in Poland and for the companies to log databases of their players with the Ministry of Finance. This led to many international operators, including William Hill, Olympic Entertainment Group, Bwin and bet365, ceasing to operate in Poland.
The Sejm Committee regards these reforms as regressive compared to other European nations and has urged the Ministry to reconsider its tax policies. The Polish sportsbook trade association, called the PIGBRiB, has previously lobbied the Government. The Sejm Committee has recommended that the Government implement the recommendation of taxing sportsbook activities on GGR and not turnover. The advice is to introduce a flat 22% rate of taxation on sportsbook GGR.
Members of the Sejm Committee are drawn from across the political spectrum. Poland is one of only six European nations that tax betting based on turnover, not GGR. The committee members believe that the current regime suppresses the potential tax-earning income of the sector. The EGBA has carried out independent calculations that show Poland’s 12% turnover tax is equivalent to around a 65% GGR tax rate. This means that, by comparison, Poland has one of the highest online sports betting taxes in the EU.
There was also a question by the committee as to whether the size of the market could be accurately calculated, given that the current data is based on taxed income and not gross proceeds.…
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