In early July, regulations came into force to eliminate illegal gambling on the Internet. The Ministry of Finance keeps a register of gambling domains, betting and online casinos operating in violation of the new act. Internet providers must completely block access to them and payment operators must prevent transactions on their behalf. In practice, however, access to many such sites remains open.

- The new Gambling Act introduced three key changes. Two concern blocking IP addresses and blocking payments to illegal operators. The third change allows legal operators to sell bets on virtual events. This should normalize the situation on the betting market, which until today has been dominated by offshore operators, located outside Poland, offering their services - both betting and casino services - without the permission of the Minister of Finance - says Newseria Biznes news agency Adam Lamentowicz, President of the Management Board of Totolotek SA.

The amendment to the Gambling Act - passed and signed by the President in December 2016 - is to reduce the grey market and protect players, and at the same time increase revenues to the state budget. The Ministry of Finance hopes that thanks to the amendment the revenues may increase by about PLN 1.5 billion a year.

Most of the provisions of the amended gambling act entered into force at the beginning of April. Three months later, on 1 July, the remaining provisions of the Act came into force, which concern blocking access to gambling domains registered outside Poland, illegal bookmakers and online casinos. From that moment on, Internet providers are obliged to block such sites on the network under a fine of up to PLN 250 thousand.

The blockade is based on the publicly available register of illegal gambling services maintained by the Ministry of Finance (Register of Domains Serving to Offer Gambling Games Incompatible with the Act). At present, there are 488 such domains in the register.

- The list grows daily, but does not fully work. Even though it has already passed on 1 July, it is still possible to enter certain sites and there is no list of illegal entities to which a player should be automatically redirected. Not everything is still working, but I assume it is "childhood problems". - is judged by Adam Lamentowicz.

In theory, a player who enters an illegal gambling site should be redirected from the machine to the register of prohibited domains of the Ministry of Finance, see a blockade notice and a notification that participation in the game entails criminal and fiscal risks. In practice, access to very many prohibited domains is still open.

No access to online gambling

The regulations, which came into force at the beginning of July, also apply to payment operators. Under the threat of a financial penalty, they must block the possibility of making transactions for illegal gambling domains (within 30 days of their registration in the MF register). President Totolotka believes that this should ultimately discourage players from using illegal online gambling.

- Experience of other European markets shows that blocking IP addresses is not entirely effective. There are various possibilities of circumventing these blockades by cheating the system from which we log on. Blocking payments is another issue - besides looking for excitement and adrenaline, the player comes to such sites for money. If he has a problem with their payment, we assume that he will direct his steps towards a legal offer - says Adam Lamentowicz.

The amendment of the Gambling Act is intended to ensure that players will only use the legal offer. So far, illegal online bookmaking betting has accounted for about 90% of the market. They are usually conducted by foreign companies (often registered in tax havens), which pay taxes outside Poland and are not subject to Polish jurisdiction. The change of regulations is to regulate this market, both financially and legally, and to eliminate illegal online gambling.

- The value of the betting market in Poland is estimated at over PLN 5 billion, of which about PLN 4 billion was generated by the offshore industry (foreign companies). This resulted in huge losses for the state budget, and for us very difficult competition with illegal entities that did not pay tax on games. This tax is one of the highest in the EU and worldwide [12% of turnover - ed.]. Now the situation should normalize," predicts Adam Lamentowicz.

According to the new regulations, entities that have a license in another EU country must apply for a permit in Poland and obtain the approval of the Polish Ministry of Finance in order to operate in the local market.

- I do not expect that nowadays there will be a lot of operators on the market who were in the grey market. Some of them will disappear, some will try to offer their services to those 20-30% of players who decide to take risks. I assume, however, that most of them will simply stop directing their offer to the Polish player," says Totolotka president.

Entities which believe that they were wrongly entered in the register of prohibited domains of the Ministry of Finance may appeal against this decision within two months and, in case of another refusal, go to court. There are currently seven entities operating in Poland which legally operate online betting services. Apart from Totolotnek, the short list also includes Millennium Betting, Fortuna Online, E-TOTO, forBET, Star - Type Sport and LV BET.