EGBA Claims 75% of Portuguese Betting in Unregulated Market

The EGBA has called on the Portuguese government to review how it taxes online gambling – claiming 75% of gamblers get their action in unregulated markets.

The European Betting and Gaming Association (EGBA) is a trade association comprised of the EU´s leading licensed online operators (Bet365, GVC, Kindred, etc.). Its objectives are to promote the implementation of regulated markets throughout the EU in order to ensure gamblers can bet in a safe, secure, and reliable environment (on its members´ websites rather than on competitors´ websites).

Therefore it comes as no surprise the Association has reacted in horror to research claiming that 75% of Portuguese gamblers get their action in unregulated markets. It has called on the Portuguese government to revise the “discriminatory tax regime” that makes it difficult for the Association´s members to compete, and to take action against unregulated operators.

How Accurate are the Claims?

The claims are difficult to substantiate. The survey to which the EGBA refers was conducted by the Universidade Nova in Lisbon and has not been published online. Therefore it´s impossible to determine what questions were asked, what methodology was used to analyze the answers, and how big the sample size was. The smaller the sample size, the less accurate the results.

It is also likely respondents did not know the difference between regulated operators and unregulated operators. This has often been the case in previous surveys relating to online gambling when gamblers have been asked whether they bet with regulated operators. Because only a small percentage know for sure they are betting with a regulated operator, the remainder is put into an “unregulated/don´t know” category. Consequently, the EGBA´s claims should be taken with a pinch of salt.

What´s EGBA Really Complaining About?

Portugal´s approach to online gambling taxation is undoubtedly unfair – particular when it comes to sports betting. It´s bad enough that online casinos and online poker operators pay between 15% and 30% tax on their gross gaming revenues (on a sliding scale depending on GGR), but sports betting is taxed at between 8% and 16% on betting turnover. So, if a sports betting operator takes a million Euros in bets, and pays a million Euros in winnings, it still has to pay tax on how much was staked.

What this means for gamblers is that the odds being offered by regulated sports betting operators are unattractive when compared to those available in the unregulated market. Furthermore, there is not so much money around for promotions or marketing, so new gamblers – who are more unlikely to be aware of the difference between regulated operators and unregulated operators – head to where the best deals are – and who can blame them!

Will the Portuguese Government Take Any Notice?

There was talk last year of introducing an across-the-board tax on GGR of 25%, but it never gained enough traction to make it into law. However, whether or not there will be any movement towards a fairer taxation regime this year is unlikely to be influenced by a trade organization making unsubstantiated claims that its members are suffering, especially when the government saw tax revenues soar in 2018 – only the second full year of online gambling regulation in Portugal.

According to figures released earlier this year, tax revenues from online casinos and online poker increased by 37% in 2018 to €73.3 million, while taxes on sport betting operators contributed a further €78.9 million over the course of the year. In the Portuguese regulator´s report (PDF), it was noted that 338 unregulated operators had been identified and warned to withdraw from the Portuguese market; and, that the 270 operators who ignored the warnings were subsequently blocked by Portuguese ISPs.

The blocking of unregulated operators throws more cold water on the EGBA´s claims – if the alleged findings of the survey are accurate and current. What´s more likely the case is that the EGBA is quoting out-of-date figures (possibly unintentionally) in order to benefit its members, when what it should be doing is encouraging its members to trim their profit margins in order to make their products more attractive to gamblers in Portugal. But then there would be nothing for them to complain about!