iGaming Market in Poland Marred by Illegal Operators Despite Increase of Regulated Efforts

2017 Gambling Act has done a lot of good for the Polish gambling scene – is has helped it grow immensely and get regulated. However, an independent audit has established that, while there have been some positive steps – it's still largely in the shadow of a much bigger, illegal market.

This is a conclusion of a survey conducted by the Polish Supreme Audit Office (NIK) that suggests “additional powers to be granted to the Ministry of Finance” in order to battle more effectively with illicit environment that uses subtle strategies to get around the lawful enforcement of gambling regulations.

Illegal Activities Still Reigning

It is estimated by the numbers posted by the official bodies in charge of this...

...that the Polish online gambling market (both legal and illegal) amounted to PLN7.9bn ($2.02 billion) in revenue in 2018, which is, compared to 2015's PLN5.0bn, a vast difference. Legal operators have contributed with a handle (amounts wagered) that was PLN3.88bn – an amazing rise of 600% over the three-year period.

But despite the efforts from the regulators and enforcement bodies, it's the illegal gambling market that remains dominant in this Eastern European country – even despite the rise of the regulated market's share and its subsequent slow decline. Online wagering with unlicensed operators increased 42% from 2015 to 2018. This represents just over half of the entire market.

Big Names Leaving

When Gambling Act was introduced and then put into effect on April 1st 2017...

...land-based betting companies were subject to a 12% increase of tax on online revenue, Also, Totalizator Sportowy – operator owned and run by the state – became the sole provider of online casino and promotional lotteries, as defined in the said Act.

An online sportsbook license was secured by 14 operators, however, this was not a big solace since some major brands such as Unibet, bet365 and William Hill have withdrawn from Poland's market. Some of them even had their sites blacklisted after the legislation was put in motion.

Blacklist Not Effective

The new laws did contribute to the rise of the online gambling tax revenue (from 2017's PLN 1.67bn to 2018's PLN1.90bn), however, this is less than what government forecast. NIK blames constant delays of Totalizator Sportowy products launch – for instance, their online gaming products – totalcasino.pl and ilotto.pl that were powered by Playtech, only occurred in December 2018, although they were slated for early Q3 release.

With the Gambling Act passed and adopted in 2017...

...the country also produced its first unlicensed domains blacklist that was online from July 1st 2017. On August 26th 2019, it already contained 7,140 blacklisted domains. This list's effectiveness is dubious, though, as NIK points out – payment and internet providers which should block access to sites – did not follow orders from Ministry of Finance which has launched enforcement action against these providers (20 in case of internet providers, 4 in case of payments).

Because of this, the Gambling Act was amended on January 2nd this year, so that the Ministry of Finance now has the jurisdiction over blacklisting domains.

What also remains a problem in Poland are offshore operators...

...that Polish authorities have no right to prosecute or charge with offences. Even Polish players continue to gamble via these sites, even though they could also be subject to prosecution, since playing on these illegal sites is strictly forbidden. What these rogue operators also do is that they use the so-called clone domains, with slightly different URLS to avoid their sites being taken offline.

Source:

“Polish gambling market still dominated by illegal operators”, igamingbusiness.com, September 9, 2019.