Portugal’s Council of Ministers has sent a bill to parliament to move forward with the licensing and taxation of online gambling, with a target to introduce regulations by the end of the year.
Prime Minister Pedro Passos Coelho’s cabinet agreed on Thursday to seek parliament’s approval to fully regulate online gambling in Portugal after a failed attempt last year.
The government plans to license and tax a broad spectrum of online products, including online casino, sports betting, poker and bets on horseracing.
Speaking after the cabinet meeting, the Secretary of State for Tourism said the government intended to create a licensing model for operators that want to offer online gambling in Portugal.
Adolfo Mesquita Nunes said the regulation of online gambling, which “still requires authorisation from the parliament”, shall enter into force “later this year”, according to national newspaper Público.
The bill has now been sent to parliament and if it is approved the government will have 180 days to implement the new regulation.
Exact tax rates have not been set, but the bill proposes a gross gaming revenue tax of between 15-30 percent for online games of chance and a turnover tax of 8-16 percent for sports betting.
Online companies will need to have representation in Portugal “to be held accountable legally and fiscally”, use a dot.pt domain and send financial transactions through a Portuguese bank account, Nunes told reporters, but the requirements were not set out in the bill.
Santa Casa de Misericórdia de Lisboa would continue to have exclusive control of its existing lottery games and land-based sports betting, he added.
Betclic, Bwin.Party and Betfair are among the international operators with exposure to Portugal.
The government will also strengthen sanctions against illegal gambling and will create “social policies” for the distribution of revenues, according to Nuno Azevedo Neves, a lawyer at ABBC law firm in Lisbon.
The bill sets out the government’s desired enforcement measures, including the possibility to block online websites.
The government wrote in the bill: “Today the proliferation of illegal gambling is a reality. In this context, special perspicacity of the Portuguese regulation is required.
“Considering the extent that this activity is almost entirely out of the current regulatory framework, it is necessary to promote its regulation in order to legalise operators and players that are now moving in the illegal market with a high degree of risk and with disastrous consequences to the state and to the public order.”
The Council of Ministers moved forward with the online gambling plans just three weeks before parliament breaks for its summer recess on July 10.
"It's good that online gambling will be regulated and that it becomes a legal game. How it will be done can be more or less pleasant," said Jorge Armindo, president of the Portuguese Casino Association.
However, gaming experts said the government had ignored appeals from Portugal’s casinos to give them exclusive licences to offer online casino games.
"The government did not accept the request from the casinos to grant them exclusivity in the exploitation of online games of chance," said Eduardo Serra Jorge, partner at Eduardo Serra Jorge & Maria José Garcia law firm.
The online gambling regulator will be the newly-formed Gaming General Inspection, under the supervision of Turismo de Portugal, and not Santa Casa as has previously been suggested, according to Serra Jorge.
International operators have expressed hopes that a bill will be in force by 2015, despite several delays under this government.
At the end of last year, ministers were forced to drop a section of the 2014 Budget that would have given the government powers to regulate online gambling after lawmakers argued the sector was too important to bundle into a finance bill.
In March, the government announced that “the framework law for online gambling has been sent to the Council of Ministers for approval by end-April 2014”.
That deadline was missed and last month ministers delayed approval for state-owned Santa Casa to launch fixed-odds sports betting as they continued to mull over the online reforms.
Changes to Portugal’s online gambling market have been discussed for more than a decade after Santa Casa received the right to offer its existing lottery, betting and other games online in 2003.
Discussions gained momentum when online gambling was identified as a revenue raising measure in the wake of Portugal’s €78bn bailout from the EU and the International Monetary Fund (IMF) in 2011.
Portugal’s exit from the bailout programme last month has relieved pressure from international creditors to find extra tax revenue, but Santa Casa, Portugal’s casinos and some online firms have continued to push for online gambling to be fully regulated.
For a copy of the government bill (in Portuguese), click here.
Written by: Lina Sennevall, GamblingCompliance
23 Jun, 2014
Reprinted with permission from the www.gamblingcompliance.com
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