Operator Talk: Hawkswood says high taxes could cripple Portuguese market

Operator Talk: Hawkswood says high taxes could cripple Portuguese market

Thursday, May 7, 2015 Totally Gaming
Clive Hawkswood believes Portugal will not be an attractive prospect for operators

Remote Gambling Association (RGA) chief executive Clive Hawkswood has questioned the potential of the new licenced gambling industry in Portugal over concerns about tax.

RGA, the body that represents many of Europe's biggest gambling companies, believes that the licencing regime will struggle to attract operators when it launches on June 28 after being approved by Portugal's Council of Ministers and President Aníbal António Cavaco Silva on April 30.

Hawkswood told TotallyGaming.com that turnover tax rates of 8-16 per cent for sports betting services and between 15-30 per cent for online casino games make Portugal an unappealing prospect for any operators looking to be granted one of the three-year licences.

"The inconsistent tax regime is probably the biggest issue, most obviously the high turnover tax rate for sports books," Hawkswood told TotallyGaming.com.

"In that respect it is much worse even than France and it is hard to see how anyone could run a profitable sportsbook on that basis.

"There are others problematic issues, such as the proposed catalogue of sports events that market can be offered on, but that is almost a moot point unless something can be done about the tax regime.

"Until the law was signed off there was no formal process to undertake, but one of the priorities is now to get as much clarification as possible about what will be required."

Hawkswood has also expressed concerns that Santa Casa da Misericordia (SCML) will still maintain a monopoly on the country’s offline sports-betting market, and only be charged a fraction of the taxes its online competitors will face, suggesting this may breach State Aid rules.

While he has been pleased by the way the Portuguese authorities have been more open to dialogue with the gambling sector since he criticised their insular approach last year, he is concerned that creating a market that is unworkable for private operators is actually no more open than the monopoly that existed before.

"If any new regime only serves to create a market where businesses are not viable and cannot operate profitably then we are no better off than we were before any reforms were introduced," Hawkswood said.

"However, in the last year there has certainly been more engagement with politicians and increasingly with regulators. When the Ministry of Tourism notified us that the law had been signed off by the President we very much welcomed the explicit reference to discussing implementation with stakeholders."

SCML will be in charge of issuing licences in Portugal, with those companies successful able to advertise and market their products under the same set of marketing rules as those applied to marketing alcohol.

Portuguese news sources have stated that the government believes it can raise €25m ($28.4m) in online gambling taxes under the new framework.

Adolfo Mesquita Nunes, Secretary of State for Tourism and the Minister who will oversee gambling, added: “We are preparing everything so that on June 28 the technical control structure is operating. The intention is to sign up as many operators as possible, particularly international ones.”

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