Flat Online Gambling Tax Proposed In Portugal

Flat Online Gambling Tax Proposed In Portugal ( Click to Enlarge )

Portuguese government proposes 25% flat online gambling tax

Boost For Online Operators

Online gambling legislators in Portugal look set to bring an end to punitive taxes.

On Saturday October 13th, it was reported that Portuguese government officials had drafted a budget for the next fiscal year. The preliminary budget includes huge changes to the way online gambling operators are treated.

While the report is by no means set in stone, it proposes a new 25% flat tax on all online casino revenues, replacing the current 15-30% sliding tariff on current casino and poker profits.

Special Online Gambling Tax

The proposed shift, known as the Special Online Gambling Tax (or IEJO) is currently subject to modifications. However, if it goes ahead it could potentially kick-start Portugal’s online gambling market, which currently suffers from heavy over-regulation.

The existing sliding-scale betting turnover tax has been heavily criticised by industry insiders for creating an inability to channel enough volumes of online casino activity to Portuguese operators.

The country issued its first online gambling licence back in 2016, but since then a total of just eight operators have benefitted from securing local authority approval.

In total, these eight operators hold a combined total of 13 online casino, poker and betting licenses.

Healthy Gains

The Portuguese online casino market reported impressive gains during the second quarter of 2018.

A total of 37.3 million was taken by the country’s eight licensed operators, with the government’s share weighing in at a stifling 16.9 million – representing 45% of overall revenues.

It only takes a simple calculation to figure out just how much better off vendors will be with a flat 25% rate.

In January of this year, the government sought stakeholder input into changing its online licensing regime.

The review was submitted in May, and it currently appears that Portuguese officials may have taken notice of the eight operator’s justifiable complaints.

What Next?

While nothing has been set in stone yet, operators are optimistic that a decrease in taxation will lead to green shoots in the Portuguese online casino market.

If the market is made more affordable, this naturally means it becomes more accessible to local and international businesses looking to corner what could potentially be a very lucrative market – but time will tell.