- Legal States
Fiona Simmons May 27, 2022 3 min read
Ministry of Finance of Poland to Raise Sports Betting Tax
Poland is a place where gambling exists, but it’s kept under close supervision from the central government. Now, the Ministry of Finance wants to see more things done about the taxation of sports betting in the country, which will most likely lead to an increase in the tax base. Lawmakers insist that the tax amounts calculated should be based on the gross gaming revenue, i.e. the income before tax deductibles.
Taxing GGR Not the Stakes Paid
This will immediately put more pressure on sportsbooks, but it will also lead to a higher amount collected by the central government which is what the ministry argues should happen in the first place. But this rate of taxation is not carried out of meanness. Rather, legislators argue that the Polish tax code is falling behind others in the European Union insofar as how taxation of the sports gambling industry goes.
Right now, Polish pari-mutuel betting is levied at 12% of the stakes paid, but lawmakers want this to change to 22% of the gross gaming revenue. According to deputy minister of finance, Jan Sarnowski, this will quickly bring the Gambling Act up to speed with other jurisdictions and will allocate more funds to the public purse, which is the only reason why sports gambling exists in the first place, some argue.
Turnover is not really taxable in the European Union, although there are six countries in the EU that continue to do so. However, the trend is to shift towards taxation of gross gaming revenue as a fairer metric. This decision is not made independently of stakeholders or a better look into the gambling industry.
The Ministry of Finance of Poland is running frequent studies to try and determine how well the industry performs and whether a shift towards a more beneficial, from a public point of view, the model would be feasible. Part of the strengthening of the taxation regime is also inspired by the country’s desire to ensure that the illegal gambling market is limited.
Poland Creates a Fully Regulated Market
Poland has not minced words nor wasted time mounting an offense against illegal operators. Sports gambling became legal in the country back in 2017. At the time, a number of “grey” operators, such as Bwin, bet365, and William Hill, made an immediate exit from the country and decided to reapply when and if possible for a license.
Meanwhile, sports betting in Poland has been going strong. According to the ministry, the first quarter results for 2021 already demonstrated a 30% jump in the total amount wagered, or some $69.7 million. Online accounted for the biggest contributor, which is to be expected given the lasting impact of the pandemic and shift towards more digital products.