With the intention of augmenting the state coffers, Government of Portugal amended the rules of the land to legalise betting.
If the initial reaction from the bookies is indicative of the ramification of the law, then it looks like that the government’s efforts are not going to pay off.
Exodus from Portugal
In their bid to increase the income of the state, Portugal government rather hastily fixed tax rates, which the betting sites think are very high.
Top three betting sites, William Hill, Amaya and PKR have in fact decided to pull out operations from Portugal.
While for start-up betting sites that have a turnover of up to €5 million are required to pay tax at the rate of 15% on their annual earnings, bigger firms with higher turnover are required to pay almost double this percentage. This has prompted the exodus of a few companies from Portugal.
Others to Follow
While the big three online betting sites have announced their decision boldly and quickly, experts and public are anticipating further pull-outs over this development.
In fact, murmurs are heard everywhere that the often criticised French tax regime is much lenient compared to the proposed Portugal taxation.
With other online betting sites watching the unravelling Portugal drama, it would not be surprising if more bookies decide to pull out of Portugal.
As of now, the small and medium sized betting sites are hoping that they might benefit by the exodus of bigger names.
But then, since they would be required to pay taxes at a higher rate later on, the entire scenario is rather murky.
Not all Hopes are Lost
But there are some optimists who still hope that things will turn out for the better.
While PKR has ruled out a return, the other prominent members who have now quit have expressed views that they are open to work under the governmental system provided that the taxes are not so exorbitant.
In fact, Pokerstars, a subsidiary of Amaya has even applied for license, under the new laws.
But as the ultimate goal of sports betting sites is to make profits, it is impossible to visualise betting sites functioning in Portugal as earlier, unless there is drastic reduction in the tax rates.
Bettors, who are the other stake holders in this saga, feel let down as they are not allowed entry in the sites, which have pulled out their operations from Portugal.
The Way Out
Since the whole exercise was undertaken by the Portugal government to increase their monetary resources and stop the flow of money to illegal channels, the government has to revisit its policy and make suitable amendments.
Experts opine that unless such a step is taken by the government this futile exercise would put the bettors in quandary and pave the way for illegal channels to flourish unchecked on the net.
But for now, the leading betting sites are either out of Portugal or are in the process of quitting!