Portuguese Draft IGaming Regulation To Be Debated Before July 10th
June 16, 2014 4:48 pmBack in 2011, Portugal agreed to a €78 billion EU bailout in return for implementing a series of revenue-raising measures, including the regulation of its online gaming market. A few years on and the draft legislation is still on ice at the Finance Ministry, prompting the Troika to issue a demand that the Portuguese government honours its commitment within a month. That seems to have done the trick and now the Portuguese government has allocated parliamentary time to discuss the draft online gambling bill by July 10, after which a vote can be taken.
Although all forms of gambling are already available in Portugal, including casinos, sports wagering, lotteries, and internet gaming, the industry is currently run by state-controlled gambling authority Santa Casa da Misericórdia de Lisboa (SCML), which subsequently collects 27.8% of revenues which then go to charitable causes, such as hospitals for the poor.
Under the new online gambling bill, the monopolistic system is expected to be replaced by a liberal system more in line with other EU countries, such as Spain, Italy and France. Naturally this means opening up the market for foreign operators to obtain licenses and pay taxes to the Portuguese government. This is also a stipulation of the European Court of Justice (CJEU), which highlighting its concerns over a monopoly system, explained:
“A monopoly is the worst possible way to restrict the freedom of operators to offer services and of consumers to choose what is best for them. It is also on Portugal to prove the necessity of restrictions in the online gaming market, as the European Court of Justice established strict and precise rules for monopolies.”
A point of contention, however, would appear to be the high tax rates of up to 25% proposed by the draft online gambling bill, which some detractors argue may simply drive potential customers into the arms of offshore operators. Nevertheless, there seems little possibility of reducing this rate in the short terms as the government has already stated a lower rate would be impractical at this time.
Despite the gap between disparate groups having to be bridged before regulation is approved, SCML seems already on-board as the gambling authority will be allowed to keep its 27.8% share of revenues even under a new liberal system. Commenting on the draft online gaming bill, SCML chief, Pedro Santana Lopes, stated:
“If the state gives us, as we hope, the opportunity to exploit sports betting we have everything ready to begin immediate investigations, which is not the case with other operators interested in this legislation.”