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NEWS 29 January 2015

Portuguese government could be missing out on €20m in tax revenue

By David Cook
The Portuguese government could be losing out on €20m from its sports-betting tax regime, according to a study commissioned by the Remote Gambling Association (RGA).

RGA’s findings, titled “Sporting Bets Regulation in Portugal”, have been submitted via auditor Pricewaterhouse Coopers on its behalf.

The study found that €20m more revenue would be generated from tax on sports betting up to 2018 if the taxes were based on gross gaming revenue (GGR) as opposed to the current system of betting turnover.

The government currently stands to make €17m in revenue up to 2018, with the RGA claiming that €37m would be generated using the GGR method.

RGA claims the study shows that countries with a GGR system in place have benefitted from more secure systems and that Portugal's taxation plans could lead to consumers using non-regulated markets due to a lack of competitiveness for regulated operators, referencing the difference in the absorption rate compared to countries using the GGR approach.

The RGA states: “Under these conditions, the ability to attract supply and clients from the unregulated to the regulated market (absorption rate) is minimal.

“The verified experience in other countries shows that a tributary regime based on the total amount of bets prevents market evolution and is not able to absorb more than one-fourth of the market.

"On the contrary, the GGR model increases its absorption rate over 50% (more than 50% in Spain: more than 80% in Denmark), double the projected rate for Portugal under the present regime.”

The Portuguese government approved a bill to legalise online gambling in June.

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