Online Gaming Legislation Officially Approved in Portugal

Portugal became one of the latest countries to have a legal and regulated online gaming market after the country’s government approved an online gaming regulation bill. The south-western European nation’s Council Of Ministers, the equivalent of a government’s Cabinet, approved the bill this week which could see the establishment of an online gaming market within months.

The idea to legalise, establish and regulate an online gaming industry in the country was fuelled by the International Monetary Fund (IMF), the European Commission (EC) and the European Central Bank (ECB).

Those entities suggested in 2010 that the Portuguese Government formally establish an online gaming market as a way to generate new revenue for its fractured economy.

Portugal has been one of the European countries most adversely affected by the Global Financial Crisis. Its economic problems led to a multi-billion dollar bailout from the European Union in 2011, which came with a strict budget aid program which ended in May last year.

The Portuguese Government highlighted its desire to continue on with economic reforms, however, and the decision to regulate online gaming appears to be proof of that. Portuguese online gaming industry is likely to generate around €25 million (around US$28 million) in new revenue for the country’s government.

Much of that revenue will come from games like poker, as well as other casino-type games, which will have taxes of between 15 and 30 per cent. Tax rates on the high end of that spectrum may lead to some companies choosing not to establish themselves in Portugal as they may see the rate as being too high.

In neighbouring Spain, a number of online gaming companies, including Ongame and Paf, ceased operations in the country due to its 25 per cent gross gaming levy. Major online poker companies like PokerStars and 888poker continued on in Spain, perhaps in part due to its population of over 47 million people.

With a bit more than 10 million people, Portugal’s population is nowhere near as much which would mean revenues and player numbers for online poker operators will not be as high.

This means Portugal’s government will be facing a challenge in imposing tax rates to fund its budget while being attractive enough for companies to establish operations.

Photo: telegraph.co.uk