Betfair joins Poland exodus

Betfair has joined the growing number of high-profile operators to leave the Polish market ahead of the country’s new licensing regime.

The company confirmed to EGR Intel this morning it would exit the market before 1 April, joining bet365, William Hill, Pinnacle and EnergyBet among others.

EGR understands Betfair is unlikely to apply for a full licence thanks to 12% tax on turnover and other restrictions that appear to favour local operators, such as limitations on marketing.

Some firms took a more positive view of the market however, as GVC said last week it was considering applying for a licence; bet365, said it was monitoring the process closely, and William Hill told affiliates it expected to work with them again soon.

The new regime is similar to the previous framework, which many firms did not comply with, but is now considered to be in line with European law since operators are no longer required to have Polish offices.

Unlicensed firms will face enforcement action, including IP and payments blocking from July.

Michal Kopec, senior business manager at Better Collective, said the exodus was welcome news for the regulator and local Polish operators, and meant the tax rate – described as unworkable by the RGA – was unlikely to change anytime soon.

“The absence of bet365 alone means the grey market will drop from around 80-90% of activity to around 50%, and local operators will now fight hard pick up that slack. If firms continue to leave and payments providers like Skrill follow, the regulator will soon have a market where grey activity will be very small.”

“Unfortunately this means that we are unlikely to see any changes in tax regime anytime soon. If the regulator successfully limits the grey market why they would consider tax regime changes?

“Hopefully we will see at least a few operators picking up licences despite heavy taxation and then they will prove to the regulator that a move away from turnover tax would improve the market further.”

One operator told EGR that international firms were “stuck between a rock and a hard place”, thanks the complex nature of the licence application process which reportedly takes up to 12 months to complete.

“If we apply now, it legitimises the 12% turnover tax which we don’t want to do, but if we wait until it changes we face a year on the sidelines,” the operator said.

The firm said it would likely apply for the licence while continuing to lobby for a GGR-based tax.

“Turnover taxes simply don’t work for operators, consumers or governments,” the operator added. “Look at Portugal where they’ve only got two licensees after nearly 12 months.”