Poland Update – (EEGReport – Magazine – Issue3 – June – September 2016)

More than 90% of the Polish online gambling market operates illegally, this is thanks to the non-notified Gambling Law. These companies are offering “against the law services” and the Government is not able to efficiently control this activity. Most of the negative effects are reflected on the players, who often are not able to check if they are playing legally or illegally. Not to mention, that they are subject of a stringent punishment if caught to gamble illegally.

Gambling Law

The Gambling Law entered into force in November 2009. Based on its Article no. 29a in Poland it is prohibited both to organize and participate in gambling over the Internet. The only exception is the so-called betting, that is, for example, betting on sporting events, but only those that meet the relevant conditions.

The first condition is to obtain an authorization for such activities, which can be obtained from the Ministry of Finance. The second condition is the payment to the Ministry of Financial Security in the amount of 480,000 Zlotys (€110,000). The Ministry shall publish on its website the list of entities that have registered and have met the above conditions.

The problem is that there are a lot of betting sites and gambling portals, not registered in our country, and present on the Polish Internet. Typically, such sites are written in Polish, but their domains end with .com. Therefore, it is very difficult, I have no knowledge in this area, to suspect that these companies operate illegally. Often they are used for advertising purposes, even by the famous Polish celebrities, which may raise the confidence in the eyes of potential players.

The confusion stems from the fact that in many countries of the European Union, betting online is legal (eg. in Cyprus). The company is registered in the country, pay taxes there, but offers its portals to a Polish audience. In the light of Polish law, taking part in such establishments, and their organization in Poland is illegal. It is very difficult to enforce this law, however, and now even to foreign entities registered in another country, acting in accordance with its provisions. Because of this, some of the companies hide behind the European Union’s regulations, which does not prohibit this type of activity. Of course, in the light of the Polish legislation they are law violators.

This creates a kind of spiral. The stricter the rules in Poland, the more illegal businesses flourish an are available online. In 2012, 86 foreign companies offered in the Polish internet users illegal online gambling activities, while in 2014 the number of such entities already reached 156. This number is still increasing.
Turnover of this type of activity is counted in billions of zlotys, and the loss of the Polish State resulting from the non-payment of taxes by these companies in Poland – is of hundreds of millions.

Illegal Gambling: penalties

Penalties for illegal gambling can affect not only the entities that organize gambling (which often is not easy to chase), but also the participants to this types of activity. What are the treats for the players? Penalties are defined in the Fiscal Penal Code. According to its provisions (Art. 107), the punishment that can be applied for participation in the foreign-game random or foreign mutual, is a fine or imprisonment, or both together.

The fine is calculated on an individual basis, and depends among other things on the income, financial situation, family status of the perpetrator. The penalty could range from 560 Zlotys to several thousand.

It is estimated that 800,000 – 900,000 Poles had contact with gambling (illegally, according to Polish regulations) in the past year. Many of them were not aware that they are involved in illegal practices.

The bookmakers cut is usually from liability. Frequently they report, even on their websites, the containing provisions in their rules, transferring the responsibility to the players. Pointing out that the duty of every player is to check whether participation in the game is organized on the area of the State where it is located (and within its jurisdiction) permitted or not. This raises the question of what is there to do, if one wants to play online safely and legally?

How to play legally in Poland?

Only 1 in 10 visitors of e-casinos in Poland are playing online legally. According to information published by the Ministry of Finance on its website, previously obtained information on more than 24,000 players who took part in international games of chance, including 17,700 players who have received winnings totaling 27 million PLN. They initiated more than 1,100 preparatory proceedings in cases. Subsequent proceedings will be taken in the first instance to persons receiving the highest winnings from illegal gambling activities and continuing dealings. Has someone been convicted? … Anyone identified only 24,000 players? Bravo…

To be safe and reduce the risk of breaking the law in Poland, you should follow a few basic rules when playing online. These are, of course, recommendations for those who believe that the Polish legislation is compatible with the European one – and that is very much in dispute – that the Polish State can punish players using the services of companies that operate legally. Well, but it may be better safe than sorry:

First of all, players are advised to consult the basic laws in Poland regarding online gambling. Ignorance of the law does not exempt from liability. The law, however, is that all cases against players are redeemed. Well, but as I have, overcoming any concerns, you decide if you want to play online, make sure the entity that organizes the games is granted to operate in Poland legally. On the website of the Ministry of Finance you can find a list of such entities. Currently, the registered players is very little. Mutual-betting is prohibited in Poland, but people are doing it and somehow no one has ever paid for it.
Another gold tip-if you decide to play online, on the page on which you are not sure whether establishments are organized legally, refer to the Terms and resting on your responsibility. Of course, you read that responsibility rests solely with you and for anyone else. If you think that you have the right, then play. More than hundreds of thousands of Poles play in a similar manner.

And finally something for the scrupulous players, urgent and those with line detective – Track the current changes in legislation. There is a chance that the Polish legal standards will be modified, and the scope of legal betting and gaming will grow (now the Polish State bears huge losses as a result of this illegal activity). In the coming days a new draft gambling law it is to be announced (quite possible that at the time that this article appears in print, Poland will have a new gambling law).
The gambling operations in Poland is complex and often absurd. Suffice it to recall that the European Union does not prohibit the organizing of betting on the Internet and you are not punished for participating in them. Thus, the Polish legislation can argue in this aspect of Europe. But it seems, that the smallest issue currently is ruling the Poland team.

At the same time, “illegal” gambling is a huge loss for the Polish, amounting in hundreds of millions due to the non-payment of taxes by the online gambling operators. Because online gambling is here, and there is no easy way to get rid of it. And it operates illegally.

Legitimate, registered companies loudly complain that the law is uneven and that they pay taxes and registration fees and others don’t. The state is helpless in the prosecution of illegally operating entities. On the other hand, companies operating legally in Poland, can’t compete with these “illegal operators” – because only bookmakers can operate legally, the one that have a network of land-based shops, which need to be maintained. This type of companies have higher costs and does not allow to offer competitive rates and promotions.

And finally the most important. And paradoxically, awakening the best hope for both players and operators. It seems that now the ruling will not just stand on banning online gambling, but “illegal” operators will be chased away from the Polish market. Pre-election promises, even the promised 500 per month paid from the budget for each child, you will need to start filling. Especially, because the authorities of the ruling party are already announcing another term. And where is the easiest way to gain, virtually free money for the government? In gambling. Just let the experts do what they do best, and thanks to sensible tax ensure a steady cash flow. The greatest demagogue is bend down after such a bonus. And it probably will be. President Kaczynski even promises to pay the Polish gamblers. Funny thing is that everyone will be satisfied.