Greece can make €500 million per annum in tax revenue from online gambling. That’s the ambitious claim Yanis Varoufakis made to his peers recently when discussing the subject of online gambling.
Although Greece is currently experiencing a major financial crisis, Varoufakis believes his projections are correct and that he can find half a billion Euros each year thanks to the regulated online poker and casino operators in the country.
While that figure certainly sounds good on paper, many commentators have asked whether the man in control of Greece’s purse strings has got his math wrong.
As it stands, European states currently generate around €13 billion in revenue each year through regulated online gaming sites.
A Miscalculation by Finance Minister
Of that figure only around 10% contributes to tax revenues, which means Varoufakis’s annual target would be almost 50% of Europe’s overall total. In reality, it’s much more likely Greece will generate somewhere close to €30 million if it can implement a solid taxation plan.
EU reports from 2011 show that Greek-based platforms generated around €250 million in revenue (after deductions) which is already 50% less than the amount Varoufakis wants to tax.
Moreover, the Greek online gaming economy is far from booming at the moment and as more legislation creeps in it’s tough to see how the country can make anything like the figure Varoufakis is suggesting.
The ambitious calculation by Varoufakis is reminiscent of Chris Christie’s projections for New Jersey’s online gaming market. During his push to have poker and casino games regulated, Christie confidently told lawmakers and gaming experts that the Garden State could generate $13.4 billion over a five-year period.
That projection would have meant a huge tax boost for New Jersey, but so far that estimate is looking extremely ambitious.
Shades of Christie in Varoufakis
Despite a recent upturn in fortunes, New Jersey’s first year of operation fell well short of Christie’s $1 billion forecast. In total the overall revenue from the State’s igaming platforms reached $120 million and projections by analysts such as Andrew Zarnett of Deutchse Bank have put 2015’s total somewhere close to $150 million. At this rate New Jersey’s igaming economy would struggle to meet Christie’s one-year estimate, moreover his five-year figure.
This over optimistic mentality is something Varoufakis could be suffering from. Although he’s yet to reveal his plans for the online poker industry in Greece, it’s unlikely the country’s 11 million inhabitants can generate the €500 million he believes is possible.
As a comparison, New Jersey has around nine million residents and while regulated online poker in the US is still in its infancy, the likelihood that Greece can generate roughly €400 million more per year in revenue is something few experts believe is possible.