All questions

The licensing process

i Application and renewalLand-based games of chance

The concession of land-based games of chance is granted by the Portuguese state through a public tender to private undertakings, incorporated in the form of a limited liability company or equivalent, with its registered office in a Member State of the EU, or in a state that is a signatory state to the Agreement on the European Economic Area, which is bound to administrative cooperation in the field of taxation and the fight against tax fraud and money laundering, provided that, in the case of foreign companies, they have a branch in Portugal.

The public tender specifies all the terms and conditions for the awarding of the concession agreement. These terms and conditions include the cumulative requirements to be met by applicants (good standing, technical and financial capacity), the location of the casino or bingo hall where the gaming activity will be carried out, and the assets allocated to the concession, the period of the concession agreement and the possibility of its renewal and the awarding criteria.

Until 2015, the renewal of the concession agreements in what concerns land-based games of chance was the sole competence of the government. With the amendments made in that year to the legal framework, the renewal of concession agreements is only possible if it is previously provided for in the public tender.

Remote gambling

The operation of online gambling is granted by means of a licence issued by the Gambling Authority to private undertakings incorporated in the form of a limited liability company or equivalent, as referred for land-based games of chance.

There are four different types of gambling licences available: fixed-odds sports betting, pari-mutuel and fixed-odds horse-racing bets, bingo and other games of chance.

The licence application has to be submitted on the standard form approved by the Gambling Authority duly accompanied by the documents required for the verification of the good standing and the technical, financial and economic capacity requirements.

The applicant must also submit a structuring plan of the gambling technical system containing a document describing the gambling technical system, its location in the national territory, where the front-end recording infrastructure will be hosted, the identification of the categories and types of online gambling to be operated, the mechanisms for player self-exclusion and for preventing the registration of players banned from gambling, the betting limits, the allowed payment methods and the rules for calculating and paying prizes, the way in which all the transactions in the player account are made, how transactions that involve transfers of funds between the operator and the player are processed, and the information security mechanisms adopted.

If the decision on the approval to grant a licence is favourable, the operator has to proceed to the down payment of the licence fees, present the safety deposits and obtain certification of the technical gambling system in order to the subsequent homologation. Only then will the licence be issued and the operator licensee may begin the operation.

Licences are valid for a period of three years from the date of issue and may be extended for successive periods of three years if the operators maintain all the requirements demanded and if the Gambling Authority's audit is successful.

ii Sanctions for non-compliance

In land-based games of chance the non-fulfilment by the concessionaires of their legal and contractual obligations constitutes an administrative offence punishable by the application of a fine and by the termination of the concession agreement.

The general rule is indeed the imposition of a fine or sanction. Only in certain cases (e.g., the concealment of gaming revenues, the failure to deliver or to increase the security deposits or the repeated infringement of the gaming legislation or the concession agreement) may the authorities suspend or terminate the concession agreement.

The concessionaires' responsibilities do not affect the criminal or administrative liability of the respective employees or agents for the infractions the latter may have committed.

The infringement of legal obligations in online gambling constitutes an administrative offence punishable with fines. There are minor, serious and very serious offences of the law and the amount of the fines vary accordingly, from €5,000 to €1 million.

According to the seriousness of the infringement and the fault of the offender, additional penalties may be imposed, such as prohibiting the offender from partaking in any online gambling and prohibiting the right to take part in contract formation procedures or in procedures aimed at granting licences.

Taxation

Gambling in Portugal is subject to different taxes.

Land-based casino games are subject to the special tax on gambling (IEJO), which takes into consideration the different types of the games (games where players play against the casino, games where players play against each other and slot machines) and the geographical gambling area where the casinos are located. The rates grow slightly every five years throughout the concession agreement (until the fifth quinquennium, if applicable).

On average, the rates vary between 4.5 per cent and 36 per cent in terms of gross gaming revenue (GGR).

No other general or local tax is claimed regarding the exercise of the gambling activity.

Prize money won by players is not subject to taxation.

Land-based bingo operated in bingo halls (traditional and electronic) is subject to stamp duty of 25 per cent.

Online gambling is also subject to IEJO, which varies according to the different type of game or bet:

  1. in games of chance (including bingo), and on pari-mutuel horse-racing bets, the IEJO is levied on the GGR of the operator. The IEJO rate on these games varies progressively between 15 per cent and 30 per cent;
  2. in fixed-odds sports, betting and fixed-odds horse-racing bets, the IEJO is levied on the revenue from the amount of the bets placed (turnover). The IEJO rate on these games varies progressively between 8 per cent and 16 per cent; and
  3. in games of chance in which players play against each other and where the fees charged by the operator are the sole revenue deriving directly from operating, and in betting exchanges, the IEJO is levied at the rate of 15 per cent. The revenue deriving directly from the pursuit of activities liable to the IEJO is not subject to corporate income tax and stamp duty. Prize money won by online players is not subject to taxation.

State-run games are subject to stamp duty of 4.5 per cent on the amount of the bet and of 20 per cent on the amount of the prize that exceeds €5,000. Stamp duty is borne by players. Mutual horse-racing bets are subject to IEJO at a rate that varies from 15 per cent to 30 per cent of GGR.

Players' winnings are not subject to income tax.