Greek Legislation Taxes Revenue, Discourages Foreign EntryPublished May 30, 2016 by Lee R
A flat tax solution will increase existing revenues, but may discourage added revenue from without.
Economically challenged Greece is moving ahead with implementing an iGaming model to address the island nation's and EU member's well-publicized woes.
Taxing for Relief
The imposition of a 35% flat tax on all online gambling revenue that the legislation calls for is designed to meet criteria to qualify for the cash-strapped country's next EU sanctioned loan tranche. The flat tax comes off as a desperate measure which could scare off new operators.
Meeting Bailout Requirements
The Greek Parliament addressed this issue in a Sunday vote on the omnibus financial bill, approving the bill in order to secure the latest round of EU bailout funds from international lenders.
Retroactive to January 21, 2016, the flat tax replaces the current 30% to 35% variable online gambling tax. The governing Syriza party has placed revenue goals for the specific measure at $54m in tax revenue.
In the Greek market there are at this moment 24 online providers operating under temporary licenses issued in 2011. The latest legislation calls for new permanent licenses to be issued to operators for an upfront charge of $3m for five years.
Discouraging foreign competitors is not necessarily a bad thing to some market stakeholders in Greece. Former state-owned betting monopoly OPAP, to whom the 35% tax rate has already applied, was seen as a main proponent of adapting the rate across the board in order bid to discourage market entry from new international competition.
OPAP nonetheless has recently shown signs of equitable privatisation, having hired former Ladbrokes Managing Director Damian Cope as its new CEO, with former CEO and chairman Ziegler continuing on as chairman as of July 1.
Task at Hand
Greece is currently legislating under loan sanctions imposed by the EU requiring Greece to meet a surplus of 3.5% of its national budget. Greece at this point is trying to cover a remaining deficit of $1.5 billion in taxes by increasing taxes on a variety of items, not just gambling.