Portugal is slapping taxes on gambling
It is legal, but right now the government is planning to introduce a tax that may just kill the industry or jumpstart it, Calvin Ayre reports. Here’s what this means for the Portuguese gamblers and for you.
The bad legalization
Legalization of anything is great until it turns bad. It worked out with drugs in the country. Portugal had a huge problem with drug consumption in the country, and tackled it by making all drugs legal. This allowed them to help the people who struggled with addiction and decrease the level of heroin addiction. Legalization cured the country.
However, gambling appeared to be a harder thing to legalize. For starters, there are only 8 legal gambling operators. Only 8 companies have a sum of 13 gambling licenses for many activities.
The eight companies are taxed 15-30% depending on their revenue. An additional 8-16% tax is added on sports betting turnover. This is quite a burden.
The new proposal that Portugal is preparing wants to make things simpler. it slashes all the previous taxes and replaces them with a 25% flat tax.
It’s a great step forward for sports betting. While previously, a large enough turnover of sports betting revenue would be taxed at 46%, the company now has to pay only 25%. This will definitely drive the industry forward and create new jobs.
However, there’s a problem with the reform. Before a company that would want to join the market could start at 15% and slowly rise to power. Right now, it may become impossible.
It’s unclear whether Portugal wants an easily controlled small number of companies on the gambling market, but this is what the new legislation may lead to.
If there’s no leniency towards a new company that wants to obtain a license, there are less chances they’re going to want it in the first place. This means less diversity for Portuguese players.
The proposal is not final and will be given a closer look on the nearest session in May after the proposal is analyzed.
How gamblers are affected?
As a result of this bill some gamblers will benefit, and some won’t. Those who prefer to place bets on sports will definitely benefit as the companies they’re betting at won’t have to play such high taxes. The payouts may slightly increase.
Casino players, on the other hand, may not like the outcome of the bill. Either way, the number of casinos may end at eight. That’s not a bad thing in and of itself, but it’s a fact.
What’s in it for me?
As you know, Ireland doesn’t have the final regulatory law in power yet. Since it’s not final, Irish legislators may look at other countries to find ideas on how to govern the industry.
If they take the path of 8 gambling companies and a 25% flat tax, this may mean less diversity in casino games for Irish players.