EY: The turnover value of Poland's entire casino market has reached PLN 43.4 billion
The turnover value of Poland's entire casino market has reached PLN 43.4 billion, excluding the grey market in the land-based market, including the grey market turnover value of Poland's online casino market of nearly PLN 20.1 billion in 2021, experts at consulting firm EY estimate.
The activity of illegal operators competing with legal operators in the online casino market is a problem present in many countries. EY experts estimate that in 2021 the value of turnover in the gray zone of the online casino market in Poland will be close to PLN 20.1 billion. The legal part of the online casino industry generated a turnover of PLN 17.4 billion in 2021, while legal players in the land-based market achieved a turnover of PLN 5.9 billion. Thus, the turnover value of the entire casino market in Poland reached PLN 43.4 billion, not including the grey market in the land-based market, according to the report.
EY Poland's experts point out that the key reasons for the gray market are primarily legal restrictions regulating legal operators. EU countries that first began regulating the online casino market initially addressed the problem by banning such activities. When most EU countries decided to legalize the market, a system of selling appropriate licenses to private operators was introduced. In some cases, however, a state monopoly was established. The trend of market liberalization continued in subsequent years, with a decrease in the number of monopolies observed in 2018 from 7 to 3 in 2021, while the number of countries with licenses for private operators increased. Monopolies are still present in Poland, Austria and Finland, while bans are in place in France and Ireland, EY reported.
"The growth of the shadow economy and the reduction of the legal market is influenced by the competitive advantage of illegal operators, which is due to the different level of restrictiveness of regulations in different countries. By operating in the shadow economy, entities present there avoid the costs of taxation, licensing fees and other regulatory requirements imposed on legally operating entities. In Poland, we are facing the problem of a huge shadow economy of more than 50 percent, in the entire online gambling market, with billions of zlotys behind it," said the president of the Graj Legalnie Association, Pawel Sikora.
He pointed out that we have one online casino managed by a monopolist, namely Totalizator Sportowy. On top of that, there are at least dozens of casinos with "offshore" licenses that operate illegally, regularly violating Polish law.
"Therefore, in our opinion, the best solution would be to allow local bookmakers to operate online casinos, as is happening throughout Europe. The effect of opening the online casino market should be a significant reduction in the shadow economy, i.e., according to an analysis by EY Poland, a decrease in the value of net revenues in the shadow economy by PLN 540 million (i.e., by 67%). Gaming tax revenues would increase by PLN 270 million. In our opinion, this is the only right solution," Sikora stressed.
Since the launch of Total Casino, the Polish legal online casino market has been characterized by rapid growth. The monopoly's annual net revenues from this business increased by 98% between 2019 and 2020, and by 103% between 2020 and 2021.
"The results of EY Poland's proprietary econometric approach to studying the size of the shadow economy in the online casino and betting market show that while the share of the shadow economy in the online casino and betting market has been declining in recent years, the level of the shadow economy in nominal terms has been rising. The observed decline in the share of the shadow economy in the total value of the online casino and betting market is therefore not due to the shrinking of the shadow economy, but to the faster growth of the legal market. The analysis shows that the public finance sector, despite the amendment of the law and the tools introduced with it to counteract the shadow economy in the online gambling market, loses hundreds of millions of zlotys every year due to unpaid gaming tax, to which the lost income from CIT or PIT would have to be added," commented EY partner and chief economist for the European Union and CESA region, co-author of EY's report on the shadow economy in the online casino and betting market in Poland Marek Rozkrut.
Source: EY and ISBnews
