The Greek Finance Ministry estimates that the country’s online casino industry should generate around 2 billion euros annually. Naturally, the government wants a nice big piece of the pie to flow into the nearly bankrupt state coffers. After decades of endless socialist spending, the Greek economy is decimated and on the verge of collapse. EU creditors forced the ultra left Greek government to stop spending money as if it was growing on trees, and implement fiscally conservative policies which started multiple riots.
The Greek political left believes that the casinos taxes will now solve all of the country’s fundamental problems and aid the ailing Greek economy as well. This was the primary reason for the original proposal to reform Greek gambling laws and to legalize online gambling, which is fundamentally against Socialist teachings.
Just like in other places in Europe, the proposed tax scheme raised concerns among casino analysts and insiders who are heavily involved with internet gambling in Greece and their representative body, the Remote Gambling Association (RGA). The main disagreement was the tax rate, which the operators felt would destroy all of their competitive advantage. Government plans a six percent tax on online gambling turnover.
CEO of Remote Gambling Association, Clive Hawkswood, described the proposed tax as “simply not viable for operators in a highly competitive global market.” The Association even went as far as retaining the services of KPMG to independently analyze the effects of the proposed tax on the online casino industry and Greece as a whole. After KPMG’s research indeed showed that the tax will only do harm and that “only a gross profits taxation model will provide value for consumers, a reliable source of revenue for the government and a healthy competitive environment for the industry.”
Under great pressure from the EU, Greek authorities agreed to change the tax framework to a more sensible one. Finally, the thirty percent gross profit tax was proposed. Industry leaders applauded the government’s reluctant decision as being wise. RGA appeared to have embraced the change, yet commented – “the 30% rate in Greece is higher than other jurisdictions, and we will continue our lobbying efforts to bring those more into line with other countries.”
A growing interest from foreign gambling operators, interested in penetrating the Greek market, may signal that its time to lower the casino taxes to become more competitive. All the major players want a piece of the Greek pie. The Greek government feels that awarding up to fifty 5 year long licenses in 2011 is the best move for the country and is already quietly spending the money it borrowed against future licensing fees.