EGBA – Unworkable Portuguese Tax code is endangering national consumers

Maarten Haijer – EGBA

As Portuguese business news sources report that around 75% of national online gambling consumers are wagering with unlicensed operators, the European Gaming & Betting Association (EGBA) has urged Portugal’s government to rethink its industry taxation policies.

The EGBA has deemed Portugal’s current ‘turnover & revenue tax policy’ as unworkable for foreign operators, and which have further created an unappealing market for national consumers – who are clearly rejecting the services of licensed incumbents.

The Portuguese government reformed the nation’s gambling framework in 2016, which left industry incumbents underwhelmed as the Antonio Costa government introduced a complex tiered ‘turnover & revenue tax’ structure across multiple online gambling verticals.

This sees Portugal operate a 15% turnover tax on bingo and online casino games up to €5 million, with a further 15% revenue charge attached on revenues above €5 million.

For online sportsbook, the Portuguese government charges licensed incumbents 8% turnover charge on revenues up to €30 million, with an 8% revenue tax charge triggered on revenues over €30 million.

Maarten Haijer, Secretary General for the European Gaming and Betting Association (EGBA), said: “The current online gambling law in Portugal rightly allows multiple online gambling operators to obtain a license and provide their services to Portuguese citizens who wish to place a bet online.

“In the online environment, this is the best way to ensure that Portuguese players can play on licensed and regulated gambling websites – and that is why 25 EU member states have now adopted this model.

“However, the current Portuguese tax regime for online gambling is discriminatory because it applies a more favourable tax for some operators, whilst others have to pay a much higher tax based on a broader tax base.

“As a result, applying for a Portuguese license is much less attractive for online gambling companies based elsewhere in the EU: for instance, only one EGBA member has a license in Portugal, while many more are very interested to obtain a license there if the tax regime becomes non-discriminatory and better suited to the online gambling environment.

“If the tax rules do not change then Portuguese consumers will continue to find more competitive gambling products with websites which are not regulated and licensed in Portugal — which do not pay tax in Portugal and might expose Portuguese players to inadequate consumer protection safeguards.

“That is why, we encourage the Portuguese authorities to tax all online gambling operators equally and on the basis of the so-called gross gaming revenue, as is done in almost every other EU country. This would encourage more companies to get a license for the Portuguese market and increase the share of existing Portuguese players who are playing within the regulated online gambling environment in Portugal.”

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