welcome by conference chair - gamblingcompliance · • ggr is taxed at 15% rate. if annual ggr...

Welcome by Conference Chair

Andrew Gellatly

Head of Global Research, GamblingCompliance

About GamblingCompliance

GamblingCompliance is the leading provider of business intelligence to the global gambling industry, specializing in high level and independent news, analysis, data, eLearning and bespoke research.

Through our research and advisory work we help governments,

operators, and investors confront regulatory and public policy challenges at state, national and international levels.

From London, Washington DC and Taipei, GamblingCompliance

provides an independent listening post, monitoring and evaluating legislative developments in gambling around the world.

European Commission- Study on the Role of the Regulators in Online Gambling

A comprehensive description of the national rules and practices for the authorisation and licensing of online gambling operators, the supervision of authorised online gambling services and the enforcement of national rules against unauthorised online gambling services.

Governmental Policy Development Projects.

3

Dutch Government - Modernisation of Games of Chance Ahead of the issuance of a limited number of new casino licenses in 2017, the Dutch Ministry of Justice has engaged Gambling Compliance to help with its policy development through a survey of land-based and online gambling regulations across selected European jurisdictions.

Portugal and Spain Portugal Spain

Influence of land based industry strong Influence of land-based industry strong

Turnover tax on betting/GGR tax on casino.

GGR tax on all online products

Blackout period ahead of licensing - continuous licensing

No blackout period ( except Sportingbet) licensing windows

Website blocking provided for-No payment blocking

Website blocking provided for. Payment blocking provided for in legislation but not used.

Sports catalogue restricted Sports catalogue now being phased out.

Turnover Tax would Make Portugal an Outlier

How has Spain’s online market developed?

Spain’s online wagering trends

How has Spain’s online casino market developed?

Contact:

Andrew Gellatly

Head of Global Research

T: +44 (0)7767 305069

E: [email protected]

About GamblingCompliance:

GamblingCompliance is the leading provider of business intelligence to the global gambling industry, specializing in high level and independent news, analysis, data, eLearning and bespoke research. www.gamblingcompliance.com

http://www.gamblingcompliance.com/

The New Online Gambling

Regulation in Portugal

Teresa Monteiro

Vice-President of Turismo de Portugal

Technological developments, along with the appearance

of the Internet, brought significant changes to gambling

operations and gambling itself

Online gambling made its appearance, but there was no

provision for this activity in Portuguese legislation

I – BACKGROUND

The existence of an unregulated market considering the

various phenomena associated caused a deep impact on

Portuguese society:

o gamblers were entirely unprotected, particularly minors

and more vulnerable persons

o the possibility of gambling addiction

I – BACKGROUND (Cont.)

o the absence of monitoring and combating of any

fraudulent activities and money laundering activities,

carried out through gambling operations and online

gambling

o the pursuit of a business activity not liable to tax and

with serious consequences for the national economy,

contributing to increased activity in the parallel economy

I – BACKGROUND (Cont.)

The main principles which characterize the legal

framework for online gambling in Portugal are:

o creation of an open-market regulatory model

o granting the right to conduct online gambling and betting

operations, under licence

o licences can be applied for at any time / no limits to the

number of licences issued

II – FEATURES OF THE PORTUGUESE MODEL

o licences are granted for three-year periods, which may

be extended

o existence of a wide range of online gambling and betting

options which may be offered to the players, assuring

greater attractiveness for the market:

casino games in general, including poker; slot

machines; bingo; fixed-odds sports betting; paris-

mutual and fixed-odds horseracing bets

II – FEATURES OF THE PORTUGUESE MODEL (Cont.)

o requirements for a responsible gambling policy, to be

incorporated by the operators into their online gambling

and betting operations

o the gambling technical systems of operators wishing to

obtain a license shall be duly certified and official

approved

II – FEATURES OF THE PORTUGUESE MODEL (cont.)

o an online gambling tax will be levied on online gambling

and betting operator’s activity and no other form of

taxation will be imposed

o prizes obtained by gamblers will not be subject to tax

o advertising and sponsorship of gambling and betting will

be permitted

Role of the regulation, monitoring and inspection body

II – FEATURES OF THE PORTUGUESE MODEL (cont.)

II – FEATURES OF THE PORTUGUESE MODEL (cont.) The taxation model

Taxation varies according to the category of gambling or

betting operations

Games of chance (includes bingo, poker and slot machines) and

paris-mutual horseracing bets

- Tax base, GGR (stakes less winnings), 15% rate - When the GGR is greater than €5,000,000, this amount will be taxed progressively up to the maximum 30% - In cases where the operator’s revenue only comes from commissions, 15% tax is levied on the commissions

II – FEATURES OF THE PORTUGUESE MODEL (cont.) The taxation model

Fixed-odds bets - The tax base is the bet turnover and the rate levied is 8% - When the bet turnover is greater than €30,000,000, this amount will be taxed progressively up to the maximum 16% - In this case too, when commissions are the operator’s only revenue, 15% tax is levied on the commissions

Evaluation

III – OPERATIONALISING THE MODEL FOR ONLINE GAMBLING OPERATIONS AND GAMBLING IN PORTUGAL

The legal frame for online gambling in Portugal is in

place

The secondary legislation has been notified to the EC

Some drafts were commented on by the EC and the

Portuguese authorities provided the requested

clarification. As a result, all the gambling and betting

execution regulations, as well as those regarding player

registration and accounts, have already been approved

III – OPERATIONALISING THE MODEL FOR ONLINE GAMBLING OPERATIONS AND GAMBLING IN PORTUGAL (cont.)

The draft regulation containing the technical

requirements of the gambling technical system was the

subject of a detailed opinion of the EC and of some

comments. Consequently, a new standstill period began

which will end on 7 December next

The draft containing the regulation on the rules of

execution for fixed-odds sports betting where gamblers

play against each other (betting exchange) was also

notified to the Commission

III – OPERATIONALISING THE MODEL FOR ONLINE GAMBLING OPERATIONS AND GAMBLING IN PORTUGAL (Cont.)

The standstill period ends on 12 February next

The list of entities who can certify technical gambling

systems has already been published

In 2016 we shall have a fully operational regulated

market capable of attracting operators and players

Impact of the VAT Use and

Enjoyment Rule for Marketing

and Advertising Services

Richard Woolich

Head of UK Tax / Chairman of DLA Piper EU VAT Group

Context

Place of Supply Rules, B2B

General Rule: establishment of customer (Article 44 PVD)

Effective use and enjoyment (Article 59a PVD)

Aim of Rule: to prevent double taxation, non-taxation or

distortion of competition

No motive required

Application of "place of consumption" principle

Restrictions on application

EU Supplier → Non EU established Customer: Effective use EU

EU Supplier → EU based Customer: Effective Use Outside EU

1 December 2015 UKG/22193851.1 26

What does it mean?

general rule, place of supply Gibraltar

place of use and enjoyment

Spain

other EU member states X

outside EU X

Supplier charges Spanish VAT

1 December 2015 UKG/22193851.1 27

Supplier

[Spain]

Operator

[Gibraltar] Spanish VAT

Which countries currently affected?

Italy

Spain

Portugal

Denmark

Sweden

UK (2017)

1 December 2015 UKG/22193851.1 28

Services

Marketing/advertising

Affiliate services

1 December 2015 UKG/22193851.1 29

Where does use and enjoyment take place?

Athesia Druck Srl Case C-1/08 (2009)

Where the advertising material is "disseminated"

Case referred to newspapers, magazines, radio, TV,

advertising

What if the customer sells the services on? Look at use by

immediate customer

Possible places of use and enjoyment: Where operator

based? Where viewers are based? Where operator's

infrastructure is based?

Danish case (2006): advertising on a webpage aimed at

Danish customers. Use of enjoyment in Denmark.

Question: Who are you aiming to capture?

1 December 2015 UKG/22193851.1 30

Structuring issues

EU Procurement Company

Partnership with Operator

1 December 2015 UKG/22193851.1 31

Any questions?

Richard Woolich

Head of UK Tax / Chairman of DLA Piper EU VAT Group

[email protected]

00 44 207 153 7336

1 December 2015

mailto:[email protected]

The new Portuguese online

gambling tax regime in a

constitutional context

António Moura Portugal

Partner, ABBC

The new Portuguese online

gambling tax regime in a

constitutional context

António Moura Portugal

1 December 2015

� Legal framework for online betting (Decree-Law 66/2015 or RJO)

� Liberal regime (provision of online betting and gambling is not reserved tosome entities; availability subject to licensing procedure)

� Decree-Law 66/2015 contemplates three kinds of online gambling andbetting:

i) games of chanceii) fixed-odds sports betsiii) horse racing bets, whether fixed-odds or totalisator

� Taxation of online gambling is seen as “regulatory instrument”, following thelogic set for land based games of chance (preamble of RJO)

1 december 2015, The new Portuguese online gambling tax regime in a constitutional context

Legal framework and tax objectives


Common taxation models for online gambling

Customer stakes Tax on stakes

Tax on GGR

GGR – GrossGaming Revenue

(operatorrevenue)

Prizes Awarded(Pay-out

to costumer)

2 main forms of onlinegambling taxation

� Taxation of online gambling and betting income occurs under a special tax(IEJO – special online gambling tax), which replaces any other taxes,general or local;

� Three sets of rules depending on the nature of the game:


Portuguese online gambling tax rules (articles 87º - 91º RJO)

• GGR is taxed at 15% rate. If annual GGR sup. to 5M €, revenue exceeding this amount will be subject to additional tax up to a limit of 30% (cap)

i) Games of chance (GGR)

• tax is based on the operator’s revenues resulting from the amount of bets made (no deduction of winnings) at an 8% rate; if annual stakes exceed 30M€, revenue exceeding 30M€ will be subject to additional tax up to a limit of 16% (cap)

ii) Fixed odds sports betting (stakes tax)

• fixed odds horse racing betting [GGR same as i)] and for mutual horse racing bets [stakes tax same as ii) above]

iii) Horse racing bets


General income tax rules vs. Offline gambling tax rules

• General rule for taxation of income by legal persons: corporate income tax (IRC) levied on profits;• Gambling income has been traditionally excluded from the scope of corporate income tax (exclusion rule) and subject to a special tax on gambling (“IEJ”)

CIT

(IRC)

• Mutual betting and State’s social games operated exclusively by Santa Casa da Misericórdia de Lisboa (SCML) are subject to stamp duty at 4,5% rate levied on the value of the bet plus an amount that may go up to 20% rate to the amount exceeding € 5,000.00

STAMP

DUTY

• Casinos (operating based on concession agreements entered into with the State) that explore land-based chance games are subject to IEJ (with different rules for table games and non-table games)

SPECIAL

GAMBLING

TAX

(IEJ)

Active Role of the Portuguese Constitutional Court

� Tax regimes applicable to gambling activity should be a reflection of pre-defined regulatory models


Stakes tax on sports betting: Violation of principl e of neutrality?

Liberalisedmarket

little concern with the potential

social harm of the activity

no reasonable justification for the imposition

of different forms of taxation

� Even if the legislator for some reason deems necessary to create aspecific tax applicable to a given activity, within the context of that tax, allentities providing the activity should be treated the same way

� The existing different treatment comes with a high potential to raise issues ofa constitutional nature

� Is there a Constitutional admissible reason to justify the imposition ofdifferent tax models to land-based casinos and online casinos and, withinthese, depending on the type of game, and bet, offered to consumers?

� Tax revenue maximization is not per se an admissible ground

Expected legal challenge on the grounds of breach of neutrality principle




Any questions?

Thank you!

António Moura [email protected]+351 21 358 36 20

Q & A

ABBC AdvogadosSociedade de Advogados RL

Largo S. Carlos, N.º 31200-410 Lisboa - PortugalTel: +351 21 358 36 20Fax: +351 21 315 94 34 www.abbc.pt

welcome by conference chair - gamblingcompliance · • ggr is taxed at 15% rate. if annual ggr...

Documents