The EU will soon have a new member in the club of nations that license gambling inside their borders. On Friday, Sept. 7, Greece's Finance Ministry unveiled its new plan for online gaming licensure. Actually, Greece has already issued gambling licenses to a total of 24 private entities but has done so only on a provisional basis, and moreover, some of these firms have subsequently abandoned the country. Yet the time will soon be here when these de facto licenses must become fully vested official warrants granted by the Greek government.
In truth, Greece was not particularly interested in allowing private operators to gain access into their market at all. This was, at least partially, because the government already operated all manner of gaming establishments as a state monopoly prior to their entry into the EU. Yet one of the conditions of their accession into this international European body was to allow various enterprises to enter their previously monopolized market.
Since Greece became a member back in 1981 and joined the common Euro currency project in 2001, the country has clearly not been proactive in granting these licenses. Only in 2011 did Greece get around to issuing the first provisional permits, which generate approximately 5.3 billion euros' worth of sportsbook handle per annum. Local calculations suggest that this sum is nearly matched by the estimated 5 billion euros flowing through local operations that have not bothered with getting licensed.
Despite the slowness of the actual process, the concept of getting a solid regulatory and revenue handle on this 10 billion euro pot has been the goal of the cash-strapped Greek government and its many international creditors for quite some time. One of the main complaints of the country's creditors is that Greek society is not particularly welcoming towards taxes and burdensome regulations, which in turn comprises electoral resistance to changes in the current half-laissez-faire system.
The reluctance to seek out licensure is probably magnified by the fact that there is a 500,000 euro deposit required just to apply for one of the new five-year licenses as well as a hefty €4 million charge for offering online sports betting plus an additional €1 million if the licensee wants to offer additional forms of gambling, like poker and casino games. Renewal of licenses is possible with the same fee structure but only if the license-holder submits for renewal at least one year prior to license expiration.
It's unclear whether gaming enterprises would have to pay regular taxes on their revenue in addition to the upfront fees. Earlier proposals had called for a tax rate of 35 percent of gross gaming revenue, but the latest documents from the Ministry of Finance are silent on this matter. Given Greece's current economic climate, it would be unusual if these taxes were waived, so it's likely that the 35 percent rate will, in fact, be applied to gaming revenue.
Individual gamblers too will have to hand over a portion of their winnings to the authorities with the amounts owed withheld automatically by the operator. Wins between €100 and €500 would be subject to a 15 percent tax while those over €500 would be charged 20 percent. Amounts of less than €100 will be exempt from this withholding.
All of these fees come in tandem with a series of restrictive rules that heavily cull the field of prospective applicants even if they can afford the actual application and license fees. While the full slate of regulations has yet to be announced on a comprehensive basis, we do have a broad outline of the major elements.
The list naturally starts with the large application and license fees as listed above. While these seem high to ordinary people, they are really not very big in comparison to the potential benefit that such a license would confer upon its holder. No serious entrant into the field would find their bid foiled by the amount demanded, not even when such fees and their renewals are effectively demanded on an upfront basis. Given the Greek government's need for reliable sources of revenue, this is all quite understandable.
Yet the real kicker is found in the other newly-published provisions. There are minor restrictions on allowable website addresses and server farm locations (both must be Greek), which are more a nod to local pride than they are a plan for effective regulatory management inside the greater EU framework. Nobody likes to see foreign web addresses when engaging in domestic commerce. Additionally, firms that wish to transact in the Greek online gambling economy would have to partner up with local enterprises for payment processing.
More importantly, the new Ministry of Finance rules seem to contain an admission that Greek authorities may not have sufficient expertise to truly judge whether an applicant is actually worthy of being allowed into the market. In this regard, the plan is to effectively outsource verification of an applicant's bona fides by requiring that they already be licensed to provide online gambling services in some other EU country and have provided three years' worth of financial data to back up their claims. The one odd result of this provision is to effectively handicap numerous local companies that may wish to apply for a license due to their inability to show that they have been in the business for a minimum of three years in some other country.
This effective discrimination against one's own countrymen cannot be incidental but rather is most likely intended as a shortcut towards getting the new Greek online gaming industry off to a fast start with established players who are likely to pay their taxes and fees in full without any argument. Presumably, local companies can then trickle into the pool of a smoothly running revenue-collection machine and be obliged to play by the same sort of enmeshing EU-style rules that many local Greek operations disdain.
Given the way in which the new rules are cast, it seems clear that they have been drawn in close consultation with EU bureaucracies, which are anxious to fully assimilate the fractious Greeks into the wider network of continental compliance and obedience. There are, of course, good reasons for the EU to insist upon such a radical departure from the traditional Greek way of doing business.
Still, it is always sad to see the independent ways of a historic community being subsumed into a more homogeneous and imperial-minded set of inflexible rules. There's a consultation period, lasting until Oct. 10, before the finalized rules are promulgated, though, so we could see some modifications appear in the meantime.
As mentioned above, the size of the unlicensed Greek online gaming market is about equal to that of the regulated sector. This means that there are countless organizations that will happily accept wagers from Greek citizens even without having gone through the licensing process. Sportsbetting.ag is one of them, and it offers sports betting, casino action, a poker room, a racebook, and several other gambling platforms. Poker players get a 100% up to $1,000 bonus when they make their first deposits. Read our review of Sportsbetting.ag for more information.