Part 1: The regulatory backdrop
ineffective enforcement so a
normal user can easily access the
offshore operators”.
This is exacerbated by the
affiliate sector, which clearly
finds that promoting offshore
operators remains more profitable
than sticking solely with licensed
Portuguese operations. “The
affiliate sector has not been forced
to promote offshore sites,” says
Domingues. “They do it because it’s
more profitable. Illegal operators
offer better commercial terms and,
unless there’s enforcement from the
regulator, affiliates will continue to
promote them.”
The tax take
What is also clear from the first
two years of operation of the
Portuguese market is that the
tax year is lopsided. Due to the
threshold systems for both sports
betting and gaming, the tax take
is backended. Hence, the special
online gambling tax (IEJO) rate fell
to 34% in the first quarter of this
year, before bouncing back to 44%
in the second quarter of the year
(see Chart 1).
Though the market has yet to
reach the high-water mark of 63%
in the fourth of quarter 2017, the
44.5% figure remains punishing, as
does the average for the past four
quarters of 42.4%.
The Estoril Sol example
“The whole system
and taxation regime
was designed to
protect Santa Casa
from competition”
Pierre Tournier, RGA
As mentioned previously in this
report, Estoril Sol is a listed land-
based and online casino concern
and it breaks down its first quarter
online revenues to give an insight
into how an operator is affected by
the tax regime.
The comparison between the
first quarter of this year, when the
company had its sports betting
operation up and running, and
Chart 1: Portugal online gambling tax take (3Q16-2Q18)
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
Source: SRIJ
Tax revenues (m)
8
GGR (€m)
Tax revenues as % of GGR
Portugal: The challenges and potential in one of Europe’s most controversial markets
2Q18