Polish Gambling Market Shifts Toward Regulation Amid Offshore Challenges

A recent report commissioned by Poland's lottery operator Totalizator Sportowy highlights that unlicensed gambling operators generated PLN627.4 million in revenue in 2020, accounting for 25.6% of the market. In contrast, licensed betting companies and Totalizator Sportowy's online casino offerings produced an additional PLN1.82 billion. This shift follows amendments to the Gambling Act, which introduced a 12% turnover tax for online sports betting and granted regulatory authorities the ability to block offshore gambling sites. The amendments seem to have sparked rapid growth in the online sports betting sector, with revenue increasing from an estimated PLN999.1 million in 2018 to PLN1.50 billion in 2020. H2 predicts the market will have a compound annual growth rate (CAGR) of 12.5% from 2016 to 2026. Legal online casinos, which launched in 2019, are anticipated to reach a revenue of PLN675.2 million by 2026. H2 director David Henwood noted that over 120 websites target Polish players without proper licensing, with about ten licensed companies—primarily in Malta, Curaçao, and Gibraltar—accounting for approximately 80% of the offshore revenue. He stated, "All this contributed to the estimated value of the online gambling shadow economy, amounting to approximately PLN629.4 million in 2020." Henwood emphasized that without the 2017 regulations, this value would likely be significantly higher. Despite success in blocking illegal operators' websites, Henwood pointed out that regulatory issues, particularly tax regulations and advertising restrictions, continue to drive customers to the grey market. The 12% turnover tax has already caused several prominent operators to withdraw, while Totalizator Sportowy cannot currently advertise its Playtech-powered online casino, and online poker remains unregulated. H2 estimates that 1.5% of Polish adults have engaged with unlicensed betting operators at least once a month, and 2.6% have participated in online casino or poker games through offshore sites. This means that approximately 1.16 million adult Poles have gambled illegally online in the past year. Henwood suggested that improving regulations could further reduce the unlicensed market size, such as allowing Totalizator Sportowy to promote its casino products and including online poker alongside its other games. Shifting from the turnover tax to a uniform gross revenue tax could potentially increase tax revenue to PLN1.80 billion, nearly double the PLN900 million generated in 2020. Polish players who gamble via unlicensed sites face penalties of up to PLN1 million. Nevertheless, the market is projected to continue growing; by 2026, H2 forecasts that total gross gaming revenue (GGR), both onshore and offshore, will reach PLN4.14 billion, reflecting a 12.7% CAGR since 2018. Of this total, PLN3.24 billion is expected to come from the regulated market, while PLN901.3 million will be from offshore competitors.