The Greek government has confirmed that it will introduce new online gambling legislation in 2016, and next week parliament will vote on a proposal to increase gaming taxes to 35 percent of gross gaming revenue.
Both proposals originate in the Greek economic crisis which shows little sign of abating.
They were submitted to the Troika of the International Monetary Fund (IMF), European Central Bank (ECB) and EU as part of a budget deal to trigger further loans.
Amaya’s third quarter financial report for 2015 specifically identified the Greek fiscal problems as one reason for reducing its full year revenue expectations.
PokerStars is operating in the Greek regulated market, in partnership with one of the 20 temporary license holders who received authorization under previous laws.
The fiscal crisis led to a number of questionable legislative changes which have been the subject of legal challenge. When the state sold its share in OPAP, the government announced that the existing licenses would not be renewed, creating a monopoly for the privatized company.
This helped to get a better sale price, but resulted in a legal position that was clearly in breach of EU treaties. The EU Commission, which must approve all new laws in member states, allowed the law to go through, but added the caveat that it may be subject to legal challenge.
Changes in taxation rules then created an almost untenable situation for online poker. Income taxes are now calculated on the amount won in any 24 hour period—losses the following day cannot be offset against winnings.
PokerStars.gr attempted to provide players with a way around the law, scheduling tournaments that began in one tax day and ending in another, but this was soon disallowed.
Tax revenues from online poker are now tiny, and players are financially incentivized to play at offshore sites not licensed in Greece.
An amendment to the way that income taxes are calculated on winnings would be one the online poker industry would welcome.
The new law aims to raise as much tax revenue as possible, however, the blatant cash grab is unlikely to reach the amounts that the government originally forecast. Its prospects have already been derailed by OPAP.
Substantial tax revenues were expected from permitting the deployment of video lottery terminals (VLTs), but OPAP simply told the government that it would cancel its VLT business since it would not be commercially viable under the government’s tax proposals.
OPAP’s concerns are likely to be taken into account in the new legislation, after several meetings between the company and the government. This gives some hope that the online poker industry will also be able to get the government to rethink the income tax calculations.
A restoration of commercial viability in the Greek online poker market would not only increase government tax revenues, but also boost revenues at the major operators like Amaya.