A flawed Polish online gambling regime could be getting the revamp it desperately needs to “stop the leakage” via the expected new coalition government, local gambling executives have said.
A system with a state monopoly provider for online casino games and high taxes, combined with restrictive regulations for sports betting, mean the black market has a 50 to 60 percent share of the Polish gambling market, one executive said.
“We have failed to protect 1.2m players who are definitely in the black market every week,” said Adam Lamentowicz, a Superbet executive who heads the Polish Chamber of Commerce for the Entertainment and Bookkeeping Industries (PIGBRiB).
But with the dire state of public finances, the industry believes it has strong arguments for the new government to completely rework Polish gambling laws, he said.
“It’s not that everyone will be welcoming us,” Lamentowicz said, but the new government will soon realise that it faces an “enormously big” budget deficit that could be alleviated if regulations are enacted to “stop the leakage” in the gambling market, he said.
Lamentowicz was among panellists speaking on Tuesday (October 31) at the European Gaming Congress in Warsaw.
After an October 15 election, Poland is poised for big changes in the coming months.
With turnout at a record 74 percent, a coalition of opposition parties together outpolled the ruling Law and Justice party, leading to expectations the coalition will form a government by the end of this year.
So along with many Poles, the industry is hoping for change.
A 12 percent tax on stakes for betting is equal to about 60 percent of the more standard tax on gross gaming revenue (GGR), which is a crushing load, executives said.
Online gambling growth has stalled, with tax take declining in the first half of 2023, Lamentowicz said.
The tax burden, coupled with a highly competitive market, means “bonus wars” have been “really difficult”, said Lukasz Seweryniak, chief executive of Superbet Poland.
Gambling regulation is split between the Ministry of Finance and the Customs and Tax Office, with the tax office gaining oversight over blacklists of unlicensed operators soliciting Polish residents.
The current government spurned calls for one unified regulator last year, even though the Ministry of Finance has not had much luck collecting fines from illegal online slots operators.
“We need fair competition, it’s unfair competing with the grey zone,” said Aneta Tylicka, chief executive of Fuksiarz bookmaker.
Some gambling regulation is not very clear, such as on fantasy sports or pick'em games, which could be either an advantage or a disadvantage, said Piotr Dynowski of Bird & Bird Poland.
Regulations appear to allow skill games, said Ewa Lejman-Widz of WH Partners.
Both lawyers said operators interested in offering such games may or may not want to ask for an official ruling on legality, because the answer could be “no”.
“Sometimes it’s better to stay in the shadows,” Lejman-Widz said.
But given that violations of gambling laws are a criminal offence, executives may not want to take chances, said Lamentowicz.
“I think we see less benefit to imprecise legal clarity,” he said, joking that the government's attitude could be “we hit you between the eyes if you screw it up”.
The trade group is targeting a goal of between 22 and 35 percent of GGR for a tax rate and believes a potential hit to government tax take would be short-lived, while long-term advantages to the government would be substantial, Lamentowicz said.
As some bookmakers have given up on the Polish market due to grim prospects for profit, cutting the tax rate would attract foreign investment, he said.
Sports associations are also coming round to the view that betting sponsorships would benefit their sports, the trade group believes.
“There are 17 (sports-betting) operators, four are strong, the rest are in survival mode,” Lamentowicz said. “It would give a completely different boost to sports.”
One key goal is to get a dedicated regulator that can build expertise on gambling issues, rather than have functions split among departments that are more accustomed to dealing with VAT or customs duty than issues related to gambling.
Ministry of Finance officials have been sympathetic to that view, he said.
The trade group is also trying to get BLIK, the payment service run by Polish banks, to stop processing payments for unlicensed operators, he said.
“Whatever BLIK does, the rest of the market will have to follow,” Lamentowicz said during a break in the conference.
Even without a new gambling act, the industry wants to suggest modifications that would add flexibility, Lamentowicz said.
At the moment, the only games allowed for sports-betting operators are those which use sports or animal racing, but the trade group chief said the industry would like to seek approval for a wider menu of games.
With an improved tax situation, legal bookmakers could regain ground lost to the illegal market as most legal bets are placed via sophisticated apps, said Tylicka of Fuksiarz.
“Believe it or not, we are a nation of technology freaks,” she said.