The iPoker Network has withdrawn all of its member sites from the Polish online gaming market in response to new gambling regulations that took effect on April 1st. Some sites, like William Hill and bet365, already left the market in March, but now it is everybody. Things like this have been happening more and more over the last couple years, but word is that some of the poker rooms didn’t even warn their customers in advance, leaving many people searching for alternatives.
Online poker had not technically been legal prior to the new regulations – only the lottery and online sports betting were allowed – but clearly sites were operating in Poland. Polish regulators to “diversify” the local market with the new laws, and by legalizing online casino games, poker, and bingo, as well as allowing poker tournaments to be held outside of casinos, it did to some extent, but all is not quite as it seems. The state-controlled gambling monopoly, Totalizator Sportowy, is the only entity permitted to operate online casino, poker, and bingo games.
Now, even with that, the iPoker Network might have tried to remain in the country, as most of its rooms do have online sports books. It would have been possible for the sites to apply for licenses. But it seems likely that the final deciding factor on the exit from Poland is the nutty tax law in place for online gaming.
Regulations stipulate that an online gaming operator be taxed at 12 percent of annual turnover, a calculation that is essentially insanity. Typically, operators are taxed based on gross gaming revenue, essentially how much money the site brings in from bettors minus how much it pays out. Turnover, on the other hand, is how much players bet without taking into consideration how much of that turns into actual revenue for the site or how much is returned to players in winnings.
At one point, it was suggested to make that number 20 percent, which would have been simply astronomical. For most small operators, it is not worth seeking a license with the current tax rate. The Polish government has said that it would take another look at the tax issue in the future, but who knows if that will happen. Online gaming operator bwin (not part of the iPoker Network) seems to be counting on that, as it applied for a gaming license this month.
In the meantime, sites and networks are deciding what to do. There is always the option to flaunt the law and just keep operating in Poland without a license, though it remains to be seen who might take that step. The government has said that it will start blocking unlicensed domains as well as their payment methods by July 1st, but steps like that haven’t always worked very well in other jurisdictions.