Portuguese Gaming Laws Delay Could Benefit Online Poker

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Portuguese gaming laws
Changes have been made to pending Portuguese gaming laws, but it might not be enough to make online poker viable in the country. (Image: trulioo.com)

Online Portuguese gaming laws have been in a state of flux for over seven months, but in the end that might be a good thing for Internet poker.

Legalized in June of 2014, the iGaming casino bill hasn’t received an expedited approval many lawmakers expected from the country’s Council of Ministers.

While frustrating to both Portugal’s poker players and poker networks, the lengthy delay on the part of the Government of Portugal’s executive branch appears to be a good thing in the long run.

It was revealed this week that multiple changes were made to the bill during the wait, including several that will increase Internet poker’s potential sustainability in Portugal.

With recent amendments to the European Union’s Value Added Tax (VAT), and an already high tax rate in Portugal, the revisions could be monumental in creating an online poker foundation capable of supporting itself in such a challenging climate.

Change of Hearts

The parliament’s 230 members agreed upon a certain set of Portuguese gambling laws, but executive leaders felt the bill needed adjusting before receiving its authorization. After seven months of waiting, it appears the Council of Ministers will finally approve the law on Thursday.

Dropped from the legislation is the requirement for operators to freely supply player data servers to government authorities at any given time for inspection. The removal of this clause will make player pool sharing a more practicable endeavor. In order to compete with its larger neighbors, Portugal will need to bring both .com and .eu players to its .pt tables.

Keeping an up-to-date tally on every single player, consistently ready for inspection by Portuguese authorities, would have made player liquidity nearly impossible for even the most advanced poker networks.

The latest version of the online gambling bill also makes financial transactions user-friendlier. Instead of only accepting deposits and withdrawals from banks and institutions located in Portugal, players will now be offered the ability to perform transactions with any credit institution established in an European Union member state.

This change is another understandable attempt to attract foreign payers, a realization on the behalf of executive leaders regarding the importance of consistently offering robust poker rooms.

Taxes the Kicker?

While it’s obvious Portugal is doing everything it can to create a successful online poker environment, taxes may have the final say. Although recent changes to VAT now tax players based on where they play from instead of where the poker network is headquartered, Portugal made no changes to its proposed taxation on revenues.

The base rate for operators will be 15 percent on gross gaming revenues, with the rate skyrocketing to 30 percent when the network reaches €10 million ($11.3 million) in revenues. Operators will struggle to absorb that high of a taxation rate, meaning players in Portugal should anticipate reduced VIP benefits, if any. In addition to VAT, players are also expected to see their winnings taxed to the tune of 35 percent as poker take is considered income through a lottery or game of chance.

With 13.5 percent of all Portuguese residents unemployed and a government desperately trying to recover from a financial crisis, the potential profitability of online poker in Europe’s westernmost country remains to be seen. But the river card is about to be turned.

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