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  1. #1
    The Buzz's Avatar
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    Default Report: High taxes have not been a market killer for Portugal

    Joss Wood of Legal Sports Report has a deep dive look back at the first full year of regulated sports betting in Portugal and provides some interesting analysis. While he says that high taxes have not been a market killer in Portugal, that may not be the case elsewhere, especially in the U.S.

    Some of the highlights:

    In total in 2017, online gambling generated Ä122.5 million ($151.5 million) of revenues. Gaming taxes took Ä54.3 million ($67 million) of this revenue, an effective tax rate of 44 percent.

    However, taxes on sports betting are set at 16 percent of turnover rather than as a percentage of gross gaming revenue. In a high handle, low margin activity like sports betting, this means that operators are paying the equivalent of 60 percent in tax on gross gaming revenue.

    At the time that the tax rates were set, many commentators felt that they were so high that online sports betting would not succeed in the Portuguese market. But 2017ís numbers suggest that on the contrary, high taxes have not been a market killer.
    Online sports betting revenues are virtually the same as Spain

    Portugalís population is 10.3 million with average GDP/capita of $19,813. Its nearest neighbor, Spain, shares a similar culture and has a population of 46.6 million and a GDP/capita of $26,528. Spain levies relatively high gaming taxes, but they are substantially lower than those in Portugal. Making a simple market comparison, itís clear that despite the high taxes in Portugal, the new system has generated similar market revenues to those in Spain.

    If we take into account the lower income in Portugal then the figures are even closer. GDP per capita in Portugal is actually 25 percent lower than in Spain, so maybe Portugal has actually done better than Spain even with its crippling taxes.

    This comparison is not perfect, since gambling propensity, different product availability and other factors also come into play. But the stark and simple message is that a regulatory system with apparently absurdly high gambling taxes can work.
    In 2015, the French regulator ARJEL publicised the fact that nine out of 11 operators offering online poker had never made a profit since regulation began in 2010. More than half of online poker licensees have left the market since then.

    Only five of the eleven licensed sports betting operators have been able to make a profit in France.

    With only four online sports betting licensees, Portugal faces a worrying level of market concentration if even one of them pulls out.

    US politicians looking at data from Portugal in the hope that it will offer support for their own high gambling tax proposals should remember that the systemic effects of high tax rates can cause a lot of collateral damage.

    They both reduce the level of consumer protection new laws provide and reduce the positive industry impact on which rosy additional employment expectations are based.
    Read the entire article here: https://www.legalsportsreport.com/18...tting-lessons/

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    TheGooner (14 March 2018)

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    I am amazed that with 16% turnover taxes licensed bookmakers were able to make a profit.

    However, taxes on sports betting are set at 16 percent of turnover rather than as a percentage of gross gaming revenue. In a high handle, low margin activity like sports betting, this means that operators are paying the equivalent of 60 percent in tax on gross gaming revenue.


    I can't see how it survives long term.

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    Renee (14 March 2018)

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    It must be that most bettors play acu=parlay bets, where the margin adds up.

    Those bets are much more popular in Europe than in US (at least when I am looking at stats of players at 5dimes).

    Still the tax rate is deadly and 1xbet is doing great because of that on grey market in Portugal.
    We are all bloodsucking ticks, hungry, devious
    each one latched on to the ass of the previous
    when the last and the first latch on it can be shown
    ass-blood sucked by the first from the last is his own

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    You are 120% right Sherlock. Parlay bets are helping with the high rate of taxes. Actually, in Europe, these bets are very popular - small stakes and many games waiting to come.
    Also, many of the bookies in the European countries offer enhanced multiples. Betting on multiples is and will be the "easy money" scenario for all the gambling industry.
    Good and smart players always, I underline always bet on singles.

    Portugal is a lovely place for grey market and it will always be

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