iGB Market Monitor: turnover tax means Poland is “mission impossible” – market would soar under GPT

The latest iGaming Business Market Monitor focuses on the UK and Poland markets and finds that the latter market remains unworkable for igaming operators with a current turnover tax rate of 12%, but if the lobbying efforts of the industry are successful, revenues could more than double over the next five years.

The iGaming Business Market Monitor is your quarterly analysis of the igaming sector in key markets, with the latest edition focusing on the UK and Poland.

Poland remains a relatively small igaming market by European standards, but there is reason to think this could change in future. One reason for its modest size is government intervention – in July a bill was passed to extend the 12% turnover tax regime for land-based betting to the online arena.

The iGaming Business Market Monitor is your quarterly analysis of the igaming sector in key markets and is part of the iGB Intelligence Centre subscriber offer

Click here to view the latest edition  

Working within this tax system was described as “mission impossible” by the chief executive of one of the country’s larger operators last month, while the Remote Gambling Association (RGA) in September released a report which expressed similar views.

The RGA report, carried out by consultancy firm Roland Berger, estimated the size of the online sports betting market in Poland was just over €100 million, which leads us to estimate the total market including online casino and other verticals, is circa €350-€400m. This is small fry compared to the £4.8bn the Market Monitor estimates as the value of the UK market.

Others have put the size of the market much higher; Polish operator Fortuna has suggested the unregulated market alone could be worth over €1bn, while Regulus Partners puts the total market size at €600m.

Although all estimates include a degree of guesswork, what’s generally agreed by those in the industry is that the regulated market will continue to lag those of other European nations if the government does not rethink its turnover tax.

On the other hand, if the intense lobbying by gaming companies proves successful, the Roland Berger report predicts the regulated market would more than double by 2019 under a gross profits tax scenario.

But taxes are not the only reason Poland has fallen behind in the igaming arena – internet penetration is low at 67%, according to EU statistics. This compares with a European average of 79%, with the UK as high as 92%.

However, mobile subscription rates are significantly higher in Poland than in the UK or Germany, and so Poland may well turn out to be a “mobile-first” igaming market, to borrow a expression from recent igaming start-ups that have skipped desktop and developed their entire product range for mobile.

The iGaming Business Market Monitor is your quarterly analysis of the igaming sector in key markets and is part of the iGB Intelligence Centre subscriber offer

Click here to view the latest edition