In The Netherlands progress towards regulation of online gaming has come to a virtual halt. But in another corner of Europe, operators are poised to conquer a newly regulated market: Portugal.
In the run-up to the granting of the first licenses in early 2016, GamblingCompliance organized a one day conference in Lisbon on December 1st. Gaming in Holland was present to gauge the atmosphere in this new playing field for iGaming. Most Portuguese attendees proved to be quite optimistic. As Paulo Rebelo, a professional sports betting trader who turned into a national celebrity, summed it up: “I’m not a bad person. So I don’t want to feel like some sort of criminal just because it’s illegal to bet on sports over the internet. Online gaming has brought a new reality and I’m glad that the Portuguese government recognizes this and has decided to adapt to the new reality by passing a new gaming law.”
Gaming in Holland actually ran into some Dutch attendees, who lamented that “we’ve been waiting for too long in The Netherlands, so we’ve started to explore opportunities elsewhere…” Also present were several executives from the Dutch certification institute NMi. The Portuguese gaming authority has recently appointed NMi as one of the gambling technical system certifying organizations.
The current situation in Portugal is straightforward. There’s one state-owned license holder for lotteries, Santa Casa da Misericórdia, which also holds the monopoly for sports betting. GamblingCompliance estimates that the current online gaming market in Portugal amounts to roughly €75m GGR, with a population of 10.5 million. The general expectation is that the first licenses will be granted in February 2016. So far, the Portuguese authorities have received 11 applications, among which three local land-based casino operators (Estoril-Sol, Solverde and Amorim Turismo).
The other applicants were not publicly disclosed, but GiH understands that they include Betfair and BetClic (currently market leader for online sports betting). As in any market heading towards regulation, taxation was a hot topic. Portugal kicks off with a very workable tax rate on casino games, poker and bingo of 15 percent on annual GGR up to €5m. Above that level, a progressively higher rate of 15-30 percent will apply. For sportsbook, Portuguese lawmakers have decided on a less realistic 8 percent tax on annual turnover up to €30m and a variable rate, capped at 16 percent, on turnover above that level.
Almost all attendees agreed that it’s impossible to build a solid business case taking these rates into consideration. Even at the lower 8 percent bound of the Portuguese turnover tax, GamblingCompliance estimates that licensed sportsbooks will effectively face over upwards of 40 percent of their GGR in taxes.
Interestingly, land-based sportsbetting (on which Santa Casa will keep its monopoly) will enjoy a much lower rate of 4,5%. One of the highlights of the day was a heated debate between Pierre Tournier, who represented the RGA (a trade organization of large online operators), and Fernando Paes Afonso, CEO of Santa Casa Gaming.
As in The Netherlands, the position of the state monopolist is very strong in Portugal. The RGA accuses Santa Casa of protection of its state monopolies by politically supporting the high tax on online sportsbook. Tournier announced that the RGA is seriously looking into lodging a complaint with the European Commission to put an end to this “unfair treatment” and “state aid”.