Part 1: The regulatory backdrop
Part 1:
The regulatory backdrop
Since opting for a
restrictive and high-
tax regime, the dot.pt
market has attracted
few entrants and
proven controversial
A reluctant liberalisation
The relationship between the
Portuguese authorities and online
gambling can perhaps best be
described as being arm’s length.
Since 2003 the lottery operator
Santa Casa da Misericordia de
Lisboa has had a monopoly on
online gaming operations. It fought
to maintain this monopoly with
a landmark case against Bwin
(which had moved to sponsor
the Portuguese football league
in 2005) that went before the
European Court of Justice (ECJ).
The court found that although
the Portuguese laws ran contrary
to the principles of the EU, the
monopoly could be justified under
certain circumstances.
The monopoly remained in place
until the global financial crisis
upended the Portuguese economy
at the end of the last decade. As
a by-product of an EU-led bailout,
the government was forced to open
up the online gambling market to
competition and following a decree
issued in April 2015, the first licence
was awarded a year later to Betclic,
followed by Bet.pt that summer.
The main principles of the
legislation are very much in line
with best practice across Europe
and elsewhere:
• To protect minors and the most
vulnerable, preventing excessive
and unregulated gambling
and addictive behaviours and
practices;
• To avoid fraud and money
laundering, ensuring security and
public order;
• To prevent criminal behaviour in
online gambling; and
• To guarantee the integrity
of the sport, preventing
and combating betting
addiction associated with the
manipulation of sports results.
The industry can be pleased with
the suite of products allowable
under the licenc es, which includes
sports betting (and pari-mutuel
betting), all casino games and
poker, both cash and tournament.
A less-than-super tax
But the sting in the tail came with
the tax arrangements put in place
by the government. The decree
that authorised online gambling
also included provisions for a new
special online gambling tax, or
IEJO.
In gaming and bingo the special
tax is based on turnover (but
effectively is a GGR tax), with a
15% rate applying to all gambling
turnover up to €5m. Then, a
further 15% is levied on turnover
Portugal: The challenges and potential in one of Europe’s most controversial markets
5