Poland

Poland to re-target unlicensed activity

Published

10 years ago

January 11, 2015

Poland’s Ministry of Finance recently signalled its intent to step up the fight against unlicensed gambling over the Internet. Anna Wietrzynska-Ciołkowska and Rafał Burda from DLA Piper’s Warsaw office analyse the context and the various options available to the Ministry.

The last couple of weeks have seen an increasing number of messages emanating from the Ministry of Finance concerning the intensification of its struggle against unlicensed gambling on the Internet.

In mid-November, a statement from the Customs Office was published on the Ministry of Finance’s website, reminding the public that anybody taking part in games of chance or betting organised by foreign operators which do not have a relevant permit will be subject to criminal liability. Also, according to Jacek Kapica, the deputy minister of finance responsible for gambling issues, not only will people taking part in illegal gambling be prosecuted, but relevant websites may also be blocked.

This is not the first time that the idea of blocking the content of websites in Poland has appeared in the context of gambling on the Internet. It was back in 2009 that the idea was raised of creating a special register of websites to which access in Poland would be restricted. However, both then and sometime later when the international AntiCounterfeitingTrade Agreement (ACTA) came into play, the issue of restricting freedom of access to internet content was strongly resisted by the public, as it was
perceived to be an attempt to restrict civil liberties by introducing a type of censorship of the Internet. Besides the civil liberties issues raised, the point was also made that, from a technical point of view, any attempt to block websites would be easy for players to circumvent and, therefore, ineffective in practice. Since then, the government has been much more cautious in its approach to implementing any ideas around blocking the websites of foreign operators, biding its time until public opinion becomes more inclined towards accepting such a solution.

It appears from minister Jacek Kapica’s statement that the government does not intend to create a black list of websites. However, he himself sees the “possibility of using tools that would impede the operation of foreign gambling sites in our country: such as, for example, a graphic curtain/non-removable warning placed in some part of the site which will hamper the use of the portal and make the player aware that by participating in the game on this site he/she is committing a premeditated crime.”

It is also worth noting that it would be difficult to find a legal basis upon which the websites of foreign bookmakers could be blocked. Technically, it is possible to apply the provisions of the law allowing for the blocking of websites containing illegal content. This refers, primarily, to Art. 180 of the Telecommunications Law, which obligates telecommunications operators to immediately block any telecommunications connections or transfers of information, upon the request of eligible entities, if those connections may jeopardise the national defence system, the security of the State, and public safety and order; or to allow those operators to block them. Nevertheless, until the issue of the compliance of the Act on Gambling with EU law is resolved, considering the fact that foreign bookmakers expressly refer to the principle of the freedom to provide services and to the licences obtained in other EU states, and considering that Polish laws are being questioned by the European Commission (which actually triggered the current work on the revision of the Act on Gambling), it is impossible to say with any certainty that we are dealing with evidently illegal content under the provisions of Art. 180 of the Telecommunications Law. Apart from the idea of combating illegal gambling on the Internet by blocking websites, proposals have been put forward to amend current laws in order to encourage foreign entities to obtain the relevant permits in Poland and fully legalize their activities.

The above-mentioned amendment is aimed at allowing foreign bookmakers which register their branches in Poland to obtain a relevant gambling
licence (however, it should be pointed out that the requirements which foreign operators would have to meet are so detailed and complex that they will undoubtedly be challenged as not being proportional to the purpose that they are designed to serve). Both foreign bookmakers and those licensed in Poland have called for a reduction in the so-called gambling tax or a change in the basis of taxation (i.e. moving this from a tax on turnover to a tax on income). Another proposed solution under consideration is to restrict the ability of foreign operators to pay winnings to players in Poland, based on the US model. However, given the current legal uncertainty around whether the provisions of the Polish Act on Gambling are consistent with EU law, it may be difficult to substantiate the application of such mechanisms on the basis that they would not pass the test of proportionality (i.e. that the actions should not exceed what is necessary to achieve
the objective of the Treaties).
Naturally, one can fully understand the reasons behind the measures taken by the Ministry of Finance, which are intended to maximise budget revenues from gambling and effectively enforce the provisions of the Act on Gambling. However, one cannot forget that there are professional private operators licensed in other EU states, and that the Polish Act on Gambling must be consistent with EU law.

This report has been provided by iGaming Business.

Related Topics:Anna Wietrzynska-Ciołkowska Eastern Europe EU Law Gambling iGaming Poland Rafał Burda taxes Warsaw

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Latest News

Cross Party Committee calls for Betting Tax Reforms

Published

2 years ago

June 30, 2022

Wladimir P.

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.

Latest News

Polish betting portal launches help center for users

Published

6 years ago

October 18, 2018

George Miller

Polish betting portal launches help center for users Reading Time: 1 minute

Zagranie, a sports and bookmaking portal based in Poland, launched the first-ever help center in the country called Zapytaj Buka! (Polish for ‘ask the bookmaker’). Now users can ask any questions about their doubts and get quick responses.

Here is how it works.

Every player who has played a little, encountered on his way more or less problems with the bookmaker. Late payment, ambiguity in the coupon calculation or no bonus. These problems will be solved by Zagranie.com experts who constitute a bridge between the user and the bookmaker.

The user asks a question which is forwarded to Zagranie.com experts. They try to solve the player’s problem – until he is satisfied with the answer. If the thread is too complex, then the experts forward the case to the bookmaker, who prioritizes the user’s query as much as possible.

“This type of project was born quite naturally. So far, we have received many inquiries from players on our Facebook or groups, just about the rotating conditions of bonuses, the best offers or coupon settlements. Help Center is the answer to such queries. Everyone can ask a question and other users can go back and save time. The knowledge base is huge. In the Response Help Center, answers “do not get lost in the network” – commented Wiktor Wojtkowski, editor-in-chief of Zagranie.com

Source: E-PLAYOnline

Source: Latest News on European Gaming Media Network

Latest News

STS to focus on further development in Poland

Published

6 years ago

October 15, 2018

George Miller

STS to focus on further development in Poland Reading Time: 2 minutes

STS, the premier bookmaker group in Poland, is focusing on further business development in Poland, in spite of the several proposed challenges. STS has categorically ruled out any plans for listing on the stock exchange.

STS currently holds 49 per cent of Poland’s bookmaker’s market in Poland.

“We want to focus on business development in Poland. After the statutory changes, the market is growing all the time. We realise that we will not reach 70 per cent market share, there is an influx of new companies, competition is increasing and the challenge may be to maintain such a high market share. I would be happy if we had 43–45 per cent in five years.” – CEO Mateusz Juroszek told PAP Business.

The President pointed out, quoting the estimates of the “Graj Legalnie”(Play Legally – ed.) Association, that the turnover value of legal bookmaking activities in 2018 should generate about PLN 5 billion. Thus, STS – according to estimates – should make a turnover at the level of approx. PLN 2.5 billion in 2018. In 2017, the STS turnover reached PLN 1.6 billion.

“Analyzing the Italian market, it can be seen that the average Italian spends on one bet five times more than the Pole. The Polish bookmaking market is much younger, Polish society is getting rich, and it has more and more money for betting. Currently, the average amount per bet is PLN 25, and recently it was PLN 19. This should allow us to grow and increase revenues – said president Juroszek – as STS we want to grow faster than the industry in Poland, above all at the expense of illegal competition, which has about 40 per cent of the market” – he added.

The President of STS informed in April that the company has no plans to enter the Warsaw Stock Exchange, which had been mentioned earlier. He also pointed out that the company could make its debut on the London or Stockholm stock exchanges in the future.

“A few years ago, we said that we would like to go public. Then the company, the stock exchange and the market were in a different situation. We do not need capital, we do not intend to sell the company. Therefore, the stock market debut today is not an interesting topic for us and we do not have any discussions in this matter” – said Mateusz Juroszek.

Source: E-PLAYOnline

Source: Latest News on European Gaming Media Network