PWC study outlines GGR pros for Portugal's online sportsbetting tax proposal

A PriceWaterhouseCoopers (PWC) study commissioned by the Remote Gambling Association (RGA) was presented to Portugal’s Commission for Economy and Public Works, estimating Euro 20 million additional revenue on a gross gaming revenue (GGR) tax regime for online sporting bets until 2018 as opposed to the current proposal of a tax regime based on betting turnover which would yield around Euro 17 million.

The PWC study titled “Sporting Bets Regulation in Portugal” also surmised that current taxation plans will lead to a loss of competitiveness for regulated online sports betting operators thereby pushing consumers into the non-regulated market.

Other pertinent points in the study, should a betting turnover tax regime be adopted, included:

harder to promote a big regulated market;

a small, inefficient and unprotected market;

countries with the alternative GGR tax system were able to create larger, efficient and secure systems for consumers.

a betting turnover regime discourages the demand for online sports betting licenses and the entrance of new operators in Portugal, for the awards won’t be competitive, maintaining players in the unregulated market.

the ability to attract supply and clients from the unregulated to the regulated market (absorption rate) is minimal. The verified experience in other countries shows that a tributary regime based on the total amount of bets prevents market evolution and is not able to absorb more than one fourth of the market.

The GGR model on the other hand increases its absorption rate over 50 percent (more than 50 percent in Spain: more than 80 percent in Denmark), double the projected rate for Portugal under the present betting turnover regime.

PWC noted that “in France, with a model identical to the Portuguese, half of the online gambling traders had left the country by the end of the first year due to the lack of profitability (18 of the total 35), which weakened the offer made to the consumers and caused a meteoric decrease of revenue to the Government.”

The study concludes that the proposed system is diminished, inefficient and unprotected. That countries with a GGR model were able, in contradistinction, to create plural, efficient and protected systems.

The full report can be read at: http://www.rga.eu.com/news.php/en/108/portugal-the-case-for-ggr#sthash.JGAjBS39.dpuf