The Polish gambling market is evolving rapidly. The Polish Parliament is currently  considering four new draft amendments that would liberalize the traditional, restrictive  legal regime regulating gambling and make it easier to offer online gambling services in  Poland.

The Polish licenced gambling market is heavily  dominated by traditional, land-based gambling. With  one small exception, the Polish regulator prohibits  all online gambling activity. The exception is online  betting conducted under a license granted by the Polish  regulator. This license can only be granted to companies  which are registered in Poland. In addition, a 12%  gaming tax is imposed on the turnover of Polish betting  operators. Therefore, both licensed Polish operators  and their competitors from other EU countries have  cause for complaint: Polish operators pay very high  taxes while the government takes no effective action to  enforce the prohibition on operating without a Polish  licence (for example, blocking the websites of unlicensed  operators); and – as described above – operators which  are registered and licensed in other EU countries simply  cannot offer their services in Poland (which does not  seem to be in line with the freedom of services principle). 

However, this restrictive legal regime may move in the  direction of liberalization if four new draft amendments  to the Polish Gambling Act are enacted.

The first draft amendment was published on 29 May 2014  by the Minister of Finance and was modified on  5 August 2014. It is now being considered by both  governmental and non-governmental institutions. If  enacted, it will allow EU gambling operators to obtain a  Polish licence and conduct gambling activities in Poland,  including online betting, through a Polish branch or  subsidiary. Its purpose is clear: to bring the current legal  regime into line with EU law. The opening of a branch  will mean the creation of a permanent establishment,  which in turn means that taxes will be paid in Poland.  Moreover, it will make it harder for EU operators to  continue offering their cross-border gambling services in  Poland under the freedom of services principle because  unless those operators are able to demonstrate the temporary nature of their Polish operation, the freedom  of establishment principle will take precedence. A Polish  branch will be subject to exactly the same obligations  as a Polish subsidiary with respect to the terms and  conditions of running an online betting business, including  the obligation to have a Polish website address (“.pl”),  capital requirements, consent for any changes in the  operator’s structure, and reporting obligations. 

The initial draft of 29 May 2014 also included a new  requirement to implement a responsible gaming policy  which should be visible on the operator’s website.  However, this requirement did not appear in the new  version of 5 August 2014. Further proposed changes  concern facilitating the organization of small prize  lotteries and prize bingos, changing the definition of  audiotele services, and some changes in the method  of calculating the gaming tax. However, no changes are  proposed with regard to the level of the gaming tax.

Apart from this draft amendment prepared by the  Minister of Finance, there are three other amendments  which are going through the legislative process in the  Polish Parliament. The purpose of the first one is to allow  the Internet to be used as a new distribution channel for  selecting numbers, signs, and other features in number  games, as well as stakes and winnings. This change has  already been notified to the EC; if enacted, it will only  have an impact on the state-owned company Totalizator  Sportowy, which has the monopoly on number games in  Poland (draft amendment of 13 June 2013). 

The second one should allow online poker and poker  games/tournaments between players in poker playing  points (i.e. poker as a type of sport). In the case of small  prize pools not exceeding PLN 760 (approx. EUR 190),  this could be done without a licence; poker played against the operator (i.e. poker as a type of gambling) would  still only be permitted in casinos (currently, poker games  and tournaments may only be held in casinos). Under  this amendment, any limited liability company or joint  stock company with its registered office in any member  state of the European Union or any member state of  the European Free Trade Association (EFTA) would be  able to obtain a licence. Furthermore, it should also  permit the advertising of poker as a type of sport (draft  amendment of 20 January 2014, revised on 17 June 2014  and on 25 June 2014).

The final amendment should facilitate the organization  of prize lotteries and prize bingos by public benefit  institutions (draft amendment of 1 April 2014).

The draft amendments described above demonstrate  the steady trend towards the liberalization of the Polish  gambling market. Although the biggest challenge remains  the same (i.e. the level of the gaming tax), the proposed  drafts may change the Polish gambling market and bring  it into line with other EU countries. Gambling operators  should keep their eye on the changing legal environment  in Poland. Sooner or later, the provision of online  gambling (not only betting) services by both EU-based  and Polish companies will become a reality.