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This month in iGaming: November 2023

December 5, 2023
5 min

Curaçao kicks off its licensing portal, Georgia jacks up tax rates, Kenya revamps its gambling laws, German players flock to the black market, and Brazil lowers its tax rate.

Curaçao’s licensing portal is open for business

Potential operators interested in a Curaçao license can now apply through the country’s online gambling licensing portal.

Curaçao has long been one of iGaming’s most prominent licensing authorities, with its affordable licenses and comparatively simple acquisition process.

However, as a condition for receiving bailout money from the Dutch government during the coronavirus pandemic, the island was required to update its licensing system, which you can read more about here and here.

As part of the new licensing regime, which is replacing the previous master license-sublicense system, potential licensees will submit their applications through an online portal. The portal was opened to receive applications and registrations on November 15.

Georgia raises gambling tax rates

Georgia is raising gambling tax rates out of concern that the country’s dramatic increase in gambling participation could lead to higher levels of problem gambling.

Taxes on business profits will be raised from 10% to 15%. Players will now pay a 5% surcharge on withdrawals, up from 2%. The increase comes despite tight restrictions on the industry, including an age requirement of 25 and a near-total ban on advertising. The restrictions were part of a raft of reforms passed in February 2023 which also made online licenses available only to holders of land-based licenses.

Prime Minister Irakli Gharibashvili claimed in a speech that gambling turnover in the country had grown from GEL 48 billion to GEL 52 billion (€17.9 billion/$19.2 billion). Gharibashvili expects the tax to yield GEL 400 million ($147 million/€134 million) in revenue per year.

You can read more about Georgia here and here

Kenya overhauls its gambling regulations

Kenya, one of the biggest markets in Africa, is set to overhaul its gambling industry.

The Gambling Control Bill 2023 will create a new Gambling Regulatory Authority, which will replace the current Betting Control and Licensing Board once the bill is passed by parliament.

The Authority will handle both licensing and regulations, and is expected to introduce higher taxes and fines for offenses. The bill will also prohibit bets of less than KES 20, on pain of a KES 5 million fine for operators offering bets smaller than that.

It will be interesting to see how this particular restriction plays out; Kenyan punters customarily make high volumes of low-value bets.

The bill will require licensees to have Kenyan citizens own at least 30% of shares in the company and process transactions through a Kenyan bank. There will be a 15% tax on gross gambling revenue.

Kenya’s betting regulations have been a source of turmoil in recent years, with brands like Sportpesa and Betin — two of the biggest on the market — withdrawing from the country in protest during a protracted back-and-forth over taxation, with government proposals including a 20% tax on stakes.

Kenya is a compelling case study for other emerging markets, such as those in Latin America. Striking the right balance with gambling regulation is difficult. Governments want to benefit from tax revenues while protecting the populace from underage and problem gambling; however, if restrictions are too tight, the legal market can suffocate, as players simply visit offshore platforms — as seems to be happening in Germany.

German players turn to the black market

Germany’s re-regulation was a hot topic, with the country’s heavy restrictions drawing plenty of criticism. Tight regulations included a one-euro-per-spin limit for slots, a mandatory cooling-off period, and other restrictions.

Criticism included the charge that such strict limits on what licensees could offer players would simply drive them towards the black market — which seems to be exactly what’s happened.

A study commissioned by the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) found that almost half of all online gambling activity in the country takes place on black-market sites.

As a result, the DOCV and the DSWV have called for the country’s regulator, the GGL, to enable licensed casinos to provide more competitive products.

According to the study, 50.7% of German players use regulated, domestic sites, while 28.9% use unlicensed providers located in the EU and 19.9% bet with offshore providers; the study’s authors estimate that black-market activity accounts for 75% of all online revenue.

The report indicates that players’ preference for the black market is due to accessibility, as well as the lack of stake limits and more generous bonuses on offer.

Brazil lowers gambling tax, moves to regulate iGaming

We’ve extensively covered the rollout of sports betting regulations in Brazil — one of the biggest topics in the industry in recent years.

While the regulation of the country’s sports betting industry was cause for celebration, there was also cause for concern — an eyebrow-raising tax rate of 18%.

Now, however, the country’s Economic Affairs Commission has approved a bill including a reduced tax rate of 12%. In another development to keep a close tab on, an attempt to remove iGaming from the gambling bill failed, meaning that a vote to officially pass the legislation would also allow for online casinos.

Sports betting is currently legal and regulated under a provisional measure, signed into law by the president in July. Tax revenues will be redirected to sports organizations, tourism organizations, public safety, education, social security, and other areas.

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