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Very interesting insights arose from DLA Piper gaming tax and regulatory seminar held at our London office just before the beginning of the ICE gaming conference.
It was a fantastic event with more than 80 registered participants and DLA Piper tax and gaming regulatory speakers from the UK, Portugal, Spain, Poland, Romania, the Netherlands and Italy.
I tried to summarize below my top 5 takeways:
1. Taxes are becoming an effective tool against the black market
A number of operators had to pay in the past back-dated taxes for their unlicensed operations in Spain, and the same scenario is happening also in other countries like Romania. The challenging of back-dated taxes is becoming the most efficient tool against unlicensed operators as this solution avoids to deal with issues relating to the compliance of the local licensing regime with EU principles.
2. Liquidity sharing will lead to major benefits
An interesting comment from the head of remote games at the Italian gambling authority, Francesco Rodano, was that liquidity sharing might
- Bring benefits not only to poker operators, but also casino and bingo operators for its impact on the value of jackpots for instance. Additionally, fantasy sports might see a major driver in liquidity sharing; and
- Push for a higher level of standardization among the jurisdictions that will join the liquidity sharing program which might put an end to the current patchwork of regulations.
3. A fair taxation is necessary to ensure the success of a gaming market
The excessive tax rate imposed in Portugal for sports betting and in the Netherlands might become a major issue hindering the growth of the market. The ambition of governments to get more money with a higher tax rate risks to result in just lower tax entries because operators will not enter the market. On the contrary, the recent lowering of taxes in Italy might create good opportunities.
4. Gaming self regulations are not enough
Self-regulations are not sufficient to govern the sector. This is not only because some operators/suppliers might not comply with that, but also because adequate regulations are necessary to protect the industry itself. Indeed, a gambling advertising ban was rumoured for instance in Italy for a long period of time and only after long discussions between the regulator and the Government, the latter was convinced that reasonable regulations – as the ones subsequently adopted – could achieve the goal of protecting players and at the same time avoiding major disputes for the breach of EU laws.
5. Still uncertainties on licenses
The opening of the application window in the Netherlands is still uncertain and risks to happen in 2017. On the contrary, primary laws on the local licensing regime are already in place in Romania, but the lack of secundary laws makes the legal framework very uncertain. Licenses are available in Portugal and no restricted number or application window is in place, but the current tax regime is dissuading a number of operators from applying for an online license.
The scenario is better in Italy where licenses on Lotto, betting shops and online games will be issued in the course of 2016 setting quite interesting expectations in the industry.
