Exclusive: STS CEO condemns unlicensed online operators in Poland

STS Group CEO Mateusz Juroszek has slammed operators serving the Polish market without a licence as he singled out Kindred Group, Betsson and 1XBet for criticism.

The Polish market was regulated in 2017 and is under the supervision of the Ministry of Finance, with STS operating as the largest licensed bookmaker in the market, yet online casino isn’t permitted alongside sports betting in licensed operators’ offerings.

Juroszek believes the market is going in the right direction but that there is still work to be done in terms of regulation, especially around operators providing services without licences.

Speaking to EGR, he said: “I think our issue is that there are still companies such as Kindred, Betsson and 1XBet, who operate in Poland on the black market when compared to what is visible in the governmental website.”

“I don’t understand how they can if there is regulation in Poland and it is notified by the European Union. But these companies currently operating in Poland are breaking the law. I don’t understand how this can work, so it shows there is still work to be done.”

To combat the problem, Juroszek has said that licensed operators such as STS should work closely with the government and a potentially dedicated regulator within the Ministry of Finance to try to bring the Polish market to the same level as other regulated European markets.

The CEO added: “Having a totally dedicated gambling regulator within the Ministry of Finance would be very helpful. It would allow us to have a professional discussion. Following that, we should rationalise the taxes in Poland to try and bring more operators to Poland.”

“We operate with one of the highest gaming taxes in the world, which is why not many operators come to Poland as for them it would be unprofitable.”

Licensed operators in Poland are taxed at a prohibitive 12% of turnover, which equates to a 55%-65% cut of GGR if tax was collected this way, like it is in most regulated markets around the world.

A paper published 12 months ago by Konrad Raczkowski, Poland’s former finance minister, said only two of the 20 companies with online licences in the country turn a profit.

As a result, Poland has one of the lowest channelisation rates in Europe with, according to Raczkowski, over 20% of bettors using websites neither licenced, regulated nor taxed in the country. He has called for a 20% GGR tax on licensed online operators to quell the black market.

Juroszek also insisted that one of the most troubling aspects of the Polish market is around online casino licensing. At the moment, online casino is a state monopoly which Juroszek feels plays right into the hands of the black market.

He said: “The online casino licence is something we lack. In every licensed jurisdiction in Europe, you have a sports betting licence and an online casino licence. In Poland, online casino is a monopoly. This generates a huge black market because the state monopoly is one company.

“I would say 80 or 90% of the online casino market is black. This is where I think a better taxation system would help reduce the black market. I think there is so much we can do, but we need a fully dedicated regulator to talk with us which should be on a more efficient level.”

Juroszek is confident that the Polish market will reach the same levels as other regulated markets.

He concluded: “We are getting there; I would say in the next three to five years, Polish sports betting companies should get an online casino licence and more rationalised taxation. I think it’ll get better.”

Betsson Group refused to comment when approached by EGR.

EGR has also reached out to 1XBet for comment.

In response to Juroszek’s comments, a Kindred Group spokesperson told EGR: “STS is painting a hugely simplified picture of a legally complex situation and it’s trying to steer attention away from a debate that’s currently being handled before the courts. It’s important to emphasise that Kindred is in favour of a local licensing regime whereby professional operators established in the EU/EEA can freely apply for a license and operate in the market, in line with the fundamental freedoms that apply in the internal market.

“Kindred currently holds local licenses in all the major European markets and has fervently supported sustainable regulatory efforts. Kindred is of the opinion, and continues to legally defend the position that, the Polish regime in its current form is non-compliant with EU law, including the mandatory sports betting right that applies to local operators.

“In accordance with standing jurisprudence from the Court of Justice of the EU, national regimes that are incompatible with EU law, cannot be enforced,” the spokesperson added.