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Long a trendy tourist spot and now the host of one of Europe’s largest gambling conferences, Portugal has struggled to replicate this success in its online gambling market. Vixio sat down with Pedro Cortés, managing partner of law firm Rato, Ling, Lei & Cortés, to discuss the market’s biggest obstacles.
Portugal, infamously, has a special monthly online gambling tax, the IEJO, which was implemented in 2020. For online fixed-odds sports betting, the IEJO is based on turnover with a tax rate of 8 percent.
Do you think taxes are too high?
I think it is too high, especially when we talk about sports betting as it's on a turnover, which for me, doesn't make any sense nowadays, Cortés said.
There are other things that can be easily changed in order to make the market even more attractive.
The fact that the tax is high doesn't mean that we don't have operators here. Rather, we have some international operators and global operators, but we probably do not have those that could be here.
And what I have been feeling in recent years is that, considering that Portugal has a non-limited number of licences to grant, that the interest is here.
We have been contacted by many international operators and local operators also that are willing to set up and then we run into another problem: that is a problem of the regulator being able to answer those requests.
Because even — I think it was a month ago — they opened some 30 new positions for inspectors and for all the [skills] that they need. And this poses some problems for those who are willing to enter [the market].
I can give examples, during COVID there was an operator that took around three years to get licensed. This doesn't make any sense. Someone that wants to invest in Portugal, they may just give up in the middle of the process if they stay waiting for three years.
Is the regulatory structure an obstacle?
[The regulator] is under the tourism board, and this goes back to what we had in 1927. Gaming was illegal, as in many countries in the world until that time, and then they just said: “Okay, we are going to have land-based casinos, but only in the coastal areas and the tourism areas, and the structure is essentially the same.”
It was started like a major tourism matter, which means that they are still under the tourism institute. So it's different from what happens in other countries, where you have independent agencies, or agencies that are the other finance departments. But it's probably something that they should think about.
Do you think changes are on the horizon?
It's a matter of political will. But this is not a priority. The problem is also a public perception of gaming, it's still something that nobody wants to talk about, but everybody bets.
There was a study from the Portuguese association of online gaming, saying that 40 percent of Portuguese still bet on illegal or grey markets. So this is a huge amount of money that the state is not getting, and because people are not educated to say "this one is [legal] or not".
The other problem is the public health problem that we are having, and I know for a fact that this is really happening, and the reason for that is that, yes, we have a code of conduct for advertisements, but then almost nobody complies with that code of conduct.
Because if you are watching, and if I just switch on my TV now and there's a match going on, you will see lots of bookmakers advertisements, even at 5pm, where you have kids watching those matches.
I do think we have a very good and regulated market in some ways, but there are things that can be easily fixed and to the benefit of the consumer. In the end, that's what we are talking about.
