The report commissioned by Poland’s lottery operator Totalizator Sportowy estimates that unlicensed operators accounted for PLN627.4m of gambling revenue in 2020, representing a market share of 25.6%.
Amendments to the Gambling Act in Poland saw the introduction of a 12% turnover tax for online sports betting operators and gave regulatory authorities the power to block offshore sites.
The re-regulation resulted in rapid growth for the online sports betting vertical, with revenue increasing from PLN999.1m in 2018 to PLN1.50bn in 2020.
H2 predicts a compound annual growth rate (CAGR) of 12.5% for the market between 2016 and 2026.
The legal online casino, launched in 2019, is expected to generate revenue of PLN675.2m by 2026.
There are over 120 websites targeting Polish players without a license, and several other operators accept wagers from Polish customers without specifically targeting them.
Around ten companies licensed in Malta, Curaçao, and Gibraltar are responsible for approximately 80% of offshore revenue.
The estimated value of the online gambling shadow economy in 2020 was approximately PLN629.4m.
Poland has been successful in blocking illegal operators’ websites and payments, but tax regulations and advertising restrictions for legal operators continue to be challenging.
The 12% turnover tax has led to the withdrawal of prominent operators from the market, and Totalizator Sportowy is currently unable to advertise its Playtech-powered online casino. Online poker remains unregulated.
An estimated 1.5% of Polish adults have played with unlicensed betting operators, and 2.6% have played online casino or poker games through offshore sites.
Totalizator Sportowy could potentially reduce the unlicensed market size by being allowed to advertise its casino products and adding online poker to its slots and table games offerings.
Replacing the turnover tax with a uniform gross revenue rate across all verticals could increase tax revenue to PLN1.80bn, nearly doubling what was generated in 2020.
Polish players gambling with unlicensed sites can face fines of up to PLN1m.
Even if regulations remain unchanged, the market is expected to grow significantly, with H2 estimating a total on- and offshore GGR of PLN4.14bn by 2026.
Out of this total, PLN3.24bn would come from the regulated market and PLN901.3m from offshore competitors.
