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.