Polish Betting Operators Ask for a Tax Break

14.04.2020, 15:47

The Bookmakers Company Association of Poland addressed the government in its search for help in dealing with the COVID-19 pandemic. The fast spread of the virus threatened both the employees and business owners in the bookmaking industry, laying off thousands of workers and cutting revenues. Poland currently has approximately 1,500 betting shops with about 5,000 employees in total. Besides this, there are hundreds of people performing office tasks for these companies.

COVID-19’s Impact on Poland’s Bookmakers

The coronavirus pandemic became the reason for a series of delays and cancellations of major sporting events around the world, such as the Kentucky Derby, NASCAR, Major League Soccer, the NBA, and many others. Due to this, experts estimate a 60% reduction in the number of wagers, which may get worse as the outbreak approaches its peak.

Most companies in the betting industry have chosen to lay off their workers from the middle of March until the pandemic is over. These measures are essential for the sake of reducing the number of social gatherings and, thus, helping prevent the spread of COVID-19. The temporary shutdown of stationary betting shops was the only sensible way to protect the clients and employees. However, it caused a drastic decline in revenue.

Online betting sites are struggling as well, as they are experiencing a lack of reliable mainstream sporting events that users would typically wager on. In addition to this, clients nowadays are hesitant to invest their finances into gambling and betting due to the unstable work conditions that COVID-19 is creating.

As the coronavirus is continuing its spread across the globe, it is still unclear how long the economic uncertainty for businesses will last. For betting shops that do not offer online services, this situation is an entirely unexpected crisis that has made their business freeze until further notice.

Appeal for Temporary Tax Relief

The closure of betting shops resulted in a complete halt of land-based betting companies for the duration of the pandemic. For many businesses, it imposed a state of severe financial instability. According to official data, PLN 820 million from the PLN 7 billion annual turnover of Poland’s licensed betting operators goes to the State Treasury as lottery and gambling tax payouts. So not only are businesses losing out on revenue, but the government is bringing in less funds as well.

Since offline betting facilities are currently not generating profit, these facilities are naturally looking for ways to lower the fixed costs that they have.

Licensees have been appealing for support from the state in order to avoid bankruptcy.

The Polish betting operators requested the consideration of their demands regarding the taxation policy. In particular, businesses asked for a reduction of taxes on lottery and gambling from 12% to 10% for the period of the pandemic crisis, at least starting from March until August. They also hope for the government to postpone the due date of tax payment for the lottery and gambling industries to September 2020.