Are Portuguese Gambling Taxes Going to Change?
Portugal is well-known in the online gambling market to implement some harsh taxes on gaming operators. This week, the European Gaming and Betting Association is calling for a change. Now is a great time to look closer at the current set of Portuguese gambling taxes.
We’re also going to explain why the EGBA is pushing for these tax rates to become more lenient. There are some massive changes taking place in Europe’s internet gambling market. Could Portugal be the next country to switch up its current set of laws?
Explaining Portugal’s Current Gambling Tax System
Online gambling became legal and regulated in Portugal back in 2015. Under Decree Law No. 66/2015, foreign companies can now legally operate in the country after obtaining a license from the government. The Serviço de Regulação e Inspeção de Jogos do Turismo de Portugal is the authority group here tasked with regulating nearly all forms of gambling.
The market in Portugal is open, yet companies operating here face some of the harshest tax rates in Europe. At the moment, casino revenue earned in the country is taxed from 15-30%. Sports betting revenue is taxed at 8-16%.
Lawmakers here briefly considered changing the tax rates earlier this year. The new plans would have let to a flat tax rate of 25% on all gambling revenue. The Portuguese government denied these plans in April.
19 companies have received licenses to operate in this country. Unfortunately, many have left the market due to the high tax regime. Interestingly, gaming revenue here still increased massively in 2018 from the year prior. So why are certain groups calling for a change to these tax rates?
EGBA Is Calling for Changes to Portuguese Gambling Taxes
The EGBA has made it clear that Portuguese gambling taxes are not benefiting the European market. New reports from this group claim that 75% of online gamblers in Portugal play through unregulated websites. The “discriminatory” tax rates are forcing companies to leave the regulated market, they argue.
Officials in the EGBA are calling for a flat rate on the country’s gross gaming revenue.
“EGBA urges the authorities to apply equal taxes across all online gambling products – and based on gross gaming revenue (GGR). This will ensure the regulated Portuguese market becomes more attractive to players – because a sensible taxation level will lead to better priced betting odds – and pull into the regulated market more of the 75% of Portuguese players who are now playing on websites not regulated in Portugal,” the group states.
This certainly makes sense. The current set of tax laws here clearly favor certain gaming operators. The online gambling sites in Europe forced to pay the higher set of taxes are leaving this market, while still continuing to accept players without regulation.
A flat tax rate across all gaming revenue is common. If Portugal decides to take the EGBA’s advice, it would join most of the other European nations with regulated online gambling markets.
Will Portugal Actually Change its Tax System?
This is the million-dollar question. As we mentioned earlier, gambling revenue has been on a steady incline since the market became regulated. The reports that 75% of bettors here play through unregulated sites may change the government’s mind.
Changes to Portuguese gambling taxes will encourage more online gaming operators to enter the legalized market. This will earn the government millions more in revenue every year.
A review of the tax regime is still taking place. The Gambling Authority in this country is working hard to nail down the pros and cons of the proposed changes. The government recently proposed a 25% flat tax rate across all gaming revenue.
Do you think Portugal should change its tax structure? If so, will this encourage more companies to begin operating here legally? Let us know in the comment section below!
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