Polish market struggles whilst STS retains leadership position

Financial results published by a range of Polish bookmakers will not make fun reading for many industry stakeholders in the country, as few companies returned a profit in 2021.

Over two-thirds of the country’s sports betting and gaming providers recorded a loss in their 2021 full year financials, with just eight out of 23 generating profit, with five securing earnings in the millions. 

These were STS at PLN 153.3m (€32.6m), Fortuna at PLN 31.9m (€6.8m), Betfan at PLN 3.6m (€765,919), forBET Zakłady Bukmacherskie at PLN 3.4m (€723.4m) and Cherry Online Polska at PLN 1.8m (€383,000).

STS emerged as the dominant operator in the country once again, having led the market with a revenue of PLN 127m (€27m) in 2021, building on a strong performance the year prior which saw its market share increase to 50%.

The remaining three profitable operators in 2021 were BestBet at PLN 193,427 (€44,151), BEM Operations Ltd at PLN 112,615 (€23,957) and Fun Projekt at PLN 7,340 (€1,561).

Meanwhile, of the eight in total, three – Cherry Online, Fun Projekt and BetFan – had recorded losses last year, whilst the remainder were profitable year-on-year.

“The financial results of Polish operators show that the vast majority of entities in the industry do not make a profit from their operations,” said Paweł Sikora, President of the Graj Legalnie.

Poland’s sports betting association, Graj Legalnie attributed the results to high taxation and ‘additional fees’ such as 0.5% of annual bookmaker turnover directed towards the Ekstraklasa football league, as well as the  PZPN women’s football system.

The trade body added that, in its view, the demanding conditions of the Polish market means that many firms, particularly for smaller companies, will struggle to break-even, and a ‘significant part of operators’ will not recover funds invested into the national betting sector.

“What is more, some operators are implementing a business strategy that involves high investment in marketing, sponsorship and bonus policy, with the aim to achieve a high rate of revenue, and ultimately to generate profit,” Sikora continued.

An additional area of concern for the Graj Legalnie was the Polish grey market – which Sikora estimates at ‘several dozen percent’, depleting state tax revenue via tax reduction – as well as oversaturation, with there being ‘not enough space’ for the 23 active companies.

Total cross-sector revenue for 2021 stood at PLN 11bn (€2.3bn), with the state budget receiving almost PLN 1.3m in gaming tax from licenced firms. 

However, Graj Legalnie estimates that ‘hundreds of millions’ in taxes are avoided by grey market operators each year.

“The grey market, the level of which oscillates around 50%, also has a very significant impact on this picture of the market,” Sikora concluded.

“As a result, illegal operators take away the opportunity to earn money from companies licensed by the Minister of Finance.”