RGA-Commissioned Study Declares Portugal Regulatory Regime an Abject Failure

As the truism goes, no matter how bad you think you have it, somewhere else, somewhere has it worse. That’s the story being told today as the London- and Brussels-based Remote Gambling Association (RGA), has again taken to task the firewalled online-gambling country of Portugal over its too-high taxation regime. The RGA, which includes plenty of your favorite and well-known online books, has complained loudly and publicly about the tax rates being charged under Portuguese gambling laws. The rates are so high, the RGA operators complain, that they continue to drive Portuguese punters to unregulated offshore sites in search of better odds.

Portuguese officials do this driving of punters to unregulated sites in massive numbers, if one believes the top-line findings of the RGA study. The market research effort was commissioned by the RGA and performed by a prominent Lisbon-based marketing and research firm, Eurogroup Consulting. Among the findings: As many as 68% of Portugal’s online bettors do their betting — either wholly or partly — on sites that are unregulated by Portugal’s gaming overseer, the Serviço de Regulação e Inspeção de Jogos (SRIJ).

The RGA previously took Portugal and the SRIJ to the public whipping post back in May, and appears to have commissioned the Eurogroup Consulting study shortly thereafter.

It’s at the top of several interesting finding released by the RGA, though one has to note that the RGA has yet to release the full study, including the methodology, so that the research can be properly vetted. Nonetheless, if the announced results are even close to true, it’s an indication that Portugal’s tax rates are, as alleged, excessively high… to the point of suppressing competition and participation in the country’s online market.

There’s really only one reason why a typical bettor would chose an unregulated site over the safety and protection a regulated site offers, and that’s a much better payback rate. That difference has to be large enough to overcome, in general terms, the market’s natural tendency to avoid risk, all other things being equal. What difference in return is enough to induce such a massive move to unregulated sites? Ten percent? Twenty?

Again, more information is needed. It’s clear, though, that the Portuguese online market is amiss, or a mess… whatever.

According to Pierre Tournier, the RGA’s Director of Government Relations at the RGA, “The legal regime for online gambling that was adopted in 2015 is clearly failing to combat the unregulated market and change is much needed to make the regulation work. We strongly believe that the Portuguese government should follow examples of other European countries that have successfully regulated the sector by adopting a GGR-based tax and waiving some of the restrictions such as the sports catalogue, which would attract more operators in Portugal.”

In addition to the eye-grabbing 68% number noted above, an RGA statement on the study asserted that “the Portuguese legislation has not achieved one of its key objectives, namely reducing the unregulated offer, and the RGA believes that a more sensible licensing regime along with a workable taxation system [] would bring the best possible outcome for consumers, the industry and the Government.”

The RGA statement also offered this, in connection with the study’s findings:

The Eurogroup Consulting report, which is based on an online gamblers survey, finds that 38% of Portuguese online gamblers gamble on unlicensed operators only and 30% gamble on both licensed and unlicensed operators. The respondents to the survey also explain that their choice is primarily driven by better odds that offered by offshore operators. This is consistent with the characteristics of the Portuguese market where online sports betting is the most important segment and also the most restricted as a result of the Turnover tax. Importantly also, the report finds that the channeling rate expressed in turnover is very low as only 39% of the funds gambled by Portuguese online gamblers are placed on the regulated market.

Again, the full study needs to be released, to determine not only the accuracy of the claims, but to assess the possibility of so-called “leading” questions and other study influences that could possibly skew the findings.

In an ill-advised move, the RGA also appears to have removed its list of member operators from public view. However, back in May, the RGA counted some 30 operators as corporate members. That list included 888.com, bet365, betfred, betway, Blue Print Gaming, Gala Coral, Gamesys, IGT, Ladbrokes, Microgaming, Meridian, NetEnt, Netplaytv, NYX Gaming Group, Openbet, Paddy Power Betfair, Playtech, PokerStars, Rank Group, SBOBET, Skybet, Sportingbet, Sportech, Stan James, Stanleybet International, Tabcorp, Tipsport, Tombola, Unibet, and William Hill.