Denmark to introduce bettors’ ID and Poland to decrease tax rate
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The Danish political parties believe that bettors' ID cards should be introduced. They want to implement them for the local betting retail shops. The first step was made by the Ministry of Taxation. It is assumed that if the decision is taken to introduce them then the ID cards will be introduced on July 1, 2022.
Both the Tax Ministry and many Danish politicians consider the ID cards will help to protect the young people and gambling addicts better and also the AML will be more effective. The Danish Minister of Taxation Morten Bødskov, claims that with the playing card ID it will be possible to do away with the opportunity to play anonymously in, among other things, football matches. Lottery coupons and scratch cards will be exempt from the new measure.
Ivan Kurochkin’s comments
This practice is not unique. Recently mandatory player ID cards have been introduced in Ukraine. Businesses and many members of associations were complaining about this decision. The reasoning behind their frustration was mostly because the operators were not given any timeframe to adapt to new rules. Ukrainian regulations established strict standards for the ID cards in terms of their protection, materials, etc. As a result, operators were not able to produce such cards in a timely manner since their production takes time.
Hopefully, the implementation of mandatory player ID cards in Denmark will be structured in a way that operators could adapt to the new rules gradually and, at the same time, the government could meet the goals that they set introducing the cards.
Moreover, mandatory ID cards are not the only way to strengthen anti-money laundering policy. Referring to the Ukrainian best practices, it is worth mentioning the Diia App that the Ministry of Digital Transformation has released. Currently, it is the only tool in Ukraine that combines a mobile application with access to citizens’ digital documents, and a single portal of public services for the population and business. The App allows identities to be verified easily by accessing the digital documents. Solutions like Diia App would be a great alternative for the online gambling market and could help the government in pursuing the anti-money laundering policy.
There are plans to change the tax base for the online sports betting market. EGBA supports this decision. The idea is to replace Poland’s high turnover-based tax with a tax based on revenue. It would incentivise the overwhelming majority of Polish players to play with websites licensed in Poland, reduce offshore gambling and generate more tax revenues for the Country.
Poland’s current 12% turnover tax on online sports betting, equal to a 55-65% GGR tax, is one of the highest online sports betting taxes in the EU. According to the country's former finance minister Konrad Raczkowski, only 2 out of the 20 companies which hold online sports betting licenses in the country turn a profit. As a result, over 20% of Polish bettors use websites which are neither licensed, regulated nor taxed in Poland, which is one of the lowest rates in Europe.
Konrad Rackowski recommends a GGR tax of around 20% to “achieve a real decrease in the size of the shadow economy [grey market] in Poland’s bookmaking industry”. The EGBA believes that such a GGR tax rate is sensible, in line with other European countries. Evidence from other European countries (and the USA) shows that a sensible GGR-based tax of around 20% is needed to ensure that an online gambling market is viable: that most of a country’s bettors play within the regulated environment, on websites which are licensed in that country.
Ivan Kurochkin’s comments
High tax rates are one of the important reasons why operators tend to stay in a grey market. The idea of moving away from turnover-based taxation is the only right option for a government that wants to bring more operators to a regulated market. The practice of shifting to GGR-based tax for gambling or supporting this shift is common among many countries such as France, Lithuania, Brazil, Ukraine, etc.
The EGBA suggestion to set the tax rate in the amount of 20%, however, is still relatively high compared to other European countries. In any event, it is still better than the current situation when 12% turnover tax equals a 55-65% GGR tax.
It is also worth mentioning that not only high taxes could be the barrier for operators but also licensing fees that must be paid in order to be allowed on the market. In other words, if the Polish government is willing to increase the number of operators on the regulated market, then it should also pay attention to the fees that gambling operators will have to pay for their licenses. Considering that even the proposed GGR-based tax is relatively high, licensing fees should be low to compensate for the costs. Otherwise, operators will not have an incentive to leave the grey market.
Regulated US sportsbooks have officially taken in more than $5 billion in wagers over a single month for the first time in history, according to data compiled by PlayUSA.com. Legal sports betting jurisdictions have so far reported that sportsbooks handled $5.2bn in wagers in September, a month that saw a surge in betting across the country with a full schedule of college football and the first three weekends of the NFL season. Those legal sportsbooks realized $412.5m in gross revenue from those bets.
The previous US record for a month was the $4.6bn, which was wagered in March. This September’s result will reach even higher numbers as Arizona has yet to report data. Anyway, betting in September is up 80.6 per cent so far from the $2.9bn in wagers legal US sportsbooks attracted in September 2020. The record will almost certainly fall in October. Five weekends of football over the month will be the catalyst, but the beginning of the NBA and NHL seasons in addition to baseball’s postseason will make it a perfect storm of sorts.
In September New Jersey led the way with $1.01bn, followed by Nevada with $786.7m. Illinois, Pennsylvania and Colorado completed the top five.