Poland had been behind the times with its gambling sector, but this changed greatly over the past year or so. Since the country began to regulate online sports betting, annual gambling revenues have skyrocketed 22%.
History of gambling in Poland
The gambling sector was not really regulated in Poland during the 1980s and 1990s.
A new set of laws implemented in 1992 didn’t do much except put stricter rules in place for new casinos, specifying that they can only be located in cities with populations of more than 250,000. Online gambling was dealt with in a similarly lax manner until a 2009 scandal broke.
The scandal involved the sports minister at the time, Miroslaw Drzewiecki, and the incident showed that there was corruption involving pro-gambling lobbyists at the highest level in government.
This led to a strict tightening of the laws. All online gambling outside of sports betting was made illegal. The sports betting sector, however, was still mostly unregulated, which made a lot of foreign operators hesitant to get involved in the Polish market.
Updated gambling laws
Ways of regulating the online sports betting sector were discussed through most of 2016. The authorities aimed to attract more international operators and therefore increase tax revenues for the state.
New rules were officially implemented on April 1, 2017. They required foreign sports betting operators to apply to the Finance Ministry for online sports betting licenses and the tax was set at 13%.
Many believed that this was a very high tax rate for a country with a relatively small population and a gambling market still in its developing stages.
The state still holds a monopoly of sorts: The state-run Totalizator Sportowy can offer bingo, poker, and casino games, while other operators are only allowed to accept sports bets.
To further clean up the sector, Polish authorities engaged in an extensive blacklisting mission. The goal is to get rid of operators that do not have a license. More than 1,600 domains have been blocked so far. Poland has even gone after some major industry names as part of its blacklisting efforts, such as Titanbet and Betsson.
Results to date
A lot of people have asked if these new regulations made a difference. Despite criticisms from certain circles, the answer is definitely yes.
The Ministry of Finance has released its annual report, which shows impressive gains. In 2017, gambling sector revenue reached $3.5bn (£2.7bn), an increase of 22% over 2016. The government’s taxes from these revenues increased by 17%.
Casino revenues increased by 13%, but sports betting dominated the revenue growth with an increase of more than 105%. Sports betting’s portion of the overall gambling sector nearly doubled to 26.4% from 15.4%.
Before online sports betting regulation, it was estimated that local operators had only a 10% share of the online betting market, but the estimate has increased to 40% because of the new measures. Through strict enforcement, the authorities are hoping this figure eventually climbs to nearly 90%.
Ten foreign operators have obtained licenses from the ministry. The tax revenue from online sports betting increased 217%, so it is clear that regulation has provided a significant impetus to the Polish market.
Others to follow suit
Many states and jurisdictions around the world have not yet legalized online gambling. Many states in the US are amending their laws to allow it.
Other countries, such as Belarus and Greece, will be looking at the gains the Polish gambling sector has made since online gambling regulation and will be hoping for similar results as they get ready to issue online sports betting licenses soon.
There are lessons to be learned from Poland’s approach.