Contributed By Bird & Bird Szepietowski i wspólnicy sp. k.
The gambling sector is heavily regulated in Poland, with only limited business opportunities available for private operators. Several types of gambling games may only be offered by the state-owned lottery operator, and strict regulations govern the private sector of the market, with a rather restrictive stance taken by the regulator. It is also often unclear whether a specific game should be considered gambling (as opposed to a contest of skill), and the laws in this regard are ambiguous.
Despite these challenges, the gambling sector in Poland has recently enjoyed a period of spectacular growth, particularly in the betting sector. Unfortunately, the COVID-19 pandemic has negatively affected the sector, and its long-term consequences remain to be seen.
The COVID-19 pandemic is definitely the most significant event which has impacted on the gambling sector in 2020, both in Poland and worldwide. With almost all major sports events cancelled and with land-based gaming venues closed, the gaming sector struggled during the first months of the lockdown, with rumours of some betting operators being on the verge of bankruptcy. As of October 2020, the gaming sector seems to be in better shape, but the economic uncertainty caused by the pandemic and the increasing risk of a second lockdown still loom over it.
In Poland, as a general rule, private entities are not permitted to conduct gambling games online. A state-owned company, Totalizator Sportowy, operates the only legal online casino, and offers games such as roulette, card games (poker, blackjack and baccarat – only in their single-player variants) and slot machines.
The only exceptions to this rule are betting and promotional lotteries, which may be organised by private operators holding a relevant official permit.
Non-gambling Online Games
Non-gambling games, such as contests where participants’ skills or knowledge are tested (where the outcome is not based on luck), can be freely organised, with no official permit required.
Under Polish law, it is often difficult to distinguish clearly whether a particular activity should be considered a form of gambling. This is so with fantasy sports, which may often resemble betting, and online social games, if their results are not skill-based. These types of games are not explicitly regulated by Polish gambling laws, and an assessment of whether they are a form of gambling will depend on the details of each particular game.
The minister in charge of public finance may, on request, issue individual decisions that determine whether a particular game should be considered as a specific form of gambling.
To conduct land-based gambling games, private operators must obtain an official permit or a licence (depending on the type of game), or, in the case of certain forms of charity lotteries or bingo, they need only notify the authorities in advance.
Organising betting requires a permit issued by the minister in charge of public finance.
Certain gambling games, such as roulette or dice, may only be organised in a casino, and casinos are the only places where private entities may offer slot machine gaming. Card games (poker, baccarat or blackjack) may also be held in a casino. A casino licence is typically awarded following a public tender.
Cash bingo games may only be held in bingo parlours, which require a licence. In practice, no bingo licences are currently in force in Poland. Raffle bingo games are only allowed to be held for charitable purposes, and require a permit to be obtained or notification to be given to the relevant tax authority (depending on the value of the prizes involved). "Telebingo", a form of bingo that is televised, is subject to a state monopoly (and is not currently offered).
Polish law considers poker as a gambling game, and contains restrictions on organising poker games if cash or in-kind prizes are offered. Poker games are primarily organised by casinos, and entities not holding a casino licence may only organise minor games, where only in-kind prizes of a total value up to approximately EUR500 may be offered. Each poker tournament must be notified in advance to the relevant tax authority, and its terms and conditions must be approved by the minister in charge of public finance.
There are several types of lotteries envisaged in Polish gambling laws. The national lottery (Lotto) and similar games (called “cash lotteries” or “number games” depending on their mechanics) are exclusively operated by the state-owned company. Private entities may offer raffle lotteries (which may be organised for charitable purposes), “audiotex” lotteries (offered via premium-rate phone calls or text messages), or promotional lotteries (sweepstakes organised to promote sales of goods or services). With the exception of minor raffle lotteries, which only require prior notification to tax authorities, a permit must be obtained for such lotteries.
Slot-machine gaming is severely restricted in Poland. Private operators may only offer slot-machine gaming in casinos, and no other form of slot-machine gaming is allowed. In addition, only the state-owned lottery company is allowed to operate dedicated slot-machine gaming parlours. The authorities very actively prosecute the operators of illegal private slot-machine parlours.
The Act on Gambling Games of 19 November 2009 (the "Act", or, in Polish, ustawa o grach hazardowych) is the main statute regulating the gambling sector. It covers topics such as the regulatory requirements related to specific types of games, licensing obligations, procedures, fees, gambling tax rates and administrative penalties for gambling operators.
Some violations of the Act are also criminal offences, and these are regulated in the Fiscal Criminal Code.
Gambling operators are also subject to other applicable legislation, such as that regulating data protection or anti-money laundering (AML) matters.
There is no definition of gambling per se in the Act. The Act covers organising “gambling games”, defined as “games of chance, betting, card games, and slot machine games”. Each of these categories is described further in the Act, and each category consists of specific types of games.
“Games of chance”, the widest of these categories, comprises “games, including games organised via the internet, played for cash or in-kind prizes, whose results depend in particular on an element of chance”. This definition is very broad, and there is controversy over how to determine the degree of the “element of chance” necessary for a game to be considered a gambling game.
Moreover, contradictory court judgments exist on whether the list of the types of games of chance that follows after the definition in the Act is exhaustive or not. Because of this, new games that may not be unambiguously classified as any of the specific types of games featured in the gambling laws, but which still feature an element of chance, are difficult to evaluate from the perspective of compliance with gambling laws.
Land-based gambling is not defined in the Act in any way, and the majority of the provisions of the Act apply the same rules to land-based and online games, with only certain specific rules being applicable only to games “organised via the internet network”.
There is no separate definition of online gambling or online games in the Act, and the majority of the provisions of the Act apply the same rules to land-based and online games, with only certain specific rules being applicable exclusively to games “organised via the internet network”. The right to conduct the majority of online gambling games is exclusively granted to the state-owned lottery company.
For gambling operators, the key offences that can be committed concern:
Each of these acts may be subject to administrative and/or criminal liability.
Participating in unlicensed gambling, or in any form of gambling conducted abroad while the participant is located in Poland, and in some cases even the possession of a slot machine, are also prohibited.
In most cases, operators violating the Act receive an administrative fine. The amount of the fine depends on the type of the violation, which in some cases may be adjusted to reflect the severity of the violation. The fine for offering gambling games without a licence or permit is fixed, and in most cases amounts to five times the official licence/permit fee.
A licence/permit may be revoked as a penalty for a gross violation of its terms.
Conducting unlawful gambling games is also subject to criminal liability for fiscal offences. Depending on the type and severity of the act, the criminal penalties include imprisonment for up to five years and/or a fine (the amount of which depends on factors such as the severity of the act, the perpetrator’s income, and their personal and family circumstances). Only natural persons (eg, officers or directors of a company) are subject to criminal liability; however, for acts committed by persons acting on behalf of a company, the company is also obliged to pay the fine (auxiliary liability), and additional measures may be taken against the company under the Act on Criminal Liability of Collective Entities for Punishable Offences.
Participants of unlicensed or foreign online gambling games may also be fined under fiscal criminal liability rules.
As of October 2020, the Polish government was considering certain amendments to the Act, primarily focused on the procedure for blacklisting unlicensed gaming websites. It intends to blacklist not only websites offering gambling, but also those used to advertise unlicensed gambling. What is more, the criteria for the entry of a gambling website onto the register are to be significantly changed. It will no longer be required to be "directed" to recipients on the territory of Poland for the website to be blacklisted. As intended by the bill, it will be sufficient if the website will "be accessible" on the territory of Poland.
As the bill is still being considered by the government and has not yet been sent for parliamentary consideration, the amendments are still subject to change, and it is not certain if and when they will come into force.
There is no dedicated regulatory body responsible for the gambling sector in Poland. The duties typically associated with such a body are delegated to the minister in charge of public finance. The minister is responsible for issuing casino licences and betting permits, and may order operators to remedy breaches of the terms of their licence or permit. The minister may also issue decisions determining whether a specific game should be considered as one of the gambling games as described in the Act.
In addition, the National Revenue Administration authorities are responsible for some other duties, and for enforcement measures, including issuing the majority of administrative fines.
The minister in charge of public finance’s approach is often considered restrictive. It may seem that the regulator’s primary goal in this is to secure funds for the state treasury. The minister tends to interpret gambling laws in ways that limit the scope of what operators are allowed to do, and at the same time, through sometimes controversial readings of the Act, strives to expand the scope of activities that, in his view, are either prohibited or require a permit or a licence.
There are two basic types of gambling licences available: a licence (koncesja) and a permit (zezwolenie). Under Polish entrepreneurship laws, a licence is required for economic activities concerning areas relevant to state security or an important public interest, where the business must be supervised by the authorities. Under gambling laws, licences are issued for casinos.
Permits are issued where a lesser degree of supervision is necessary, and a permit is required for all major forms of gambling other than casinos, including bingo parlours, betting and promotional lotteries. A permit only covers one kind of activity or a single promotional lottery, with online and land-based betting also requiring separate permits.
In respect of poker tournaments, minor raffle lotteries and raffle bingo, prior notification describing the details of the undertaking is required. No licence or permit is issued in such cases.
Only a limited number of casinos may operate in Poland: only one casino is permitted for every 250,000 inhabitants of a city, and the maximum total number of casinos depends on the population of each province (voivodship). When there is more than one applicant for a licence (which is usually the case), a public tender is held.
Similar limits are in place for bingo parlour and slot-machine parlour permits, but, in reality, not a single bingo parlour is operating in Poland at this time, and only the state-owned operator can run slot-machine parlours.
Other gambling permits are available without restriction.
Casino licences, bingo parlour permits and betting permits are granted for six years. They may be extended once for another six-year period.
Other permits are issued for the duration of each raffle bingo game or lottery, but for no longer than two years.
In the case of casinos, bingo halls and betting (both land-based and online), only a limited liability company or a joint stock company may conduct such games. The company must either have its registered office in Poland, or, in the case of companies having their registered office elsewhere within the European Economic Area, they must set up a branch office in Poland or appoint a representative in the country.
The basic application process is similar for all types of games where a licence or a permit is required. It comprises of submitting an application, along with all the necessary paperwork, to the relevant authority. In the case of local lotteries or raffle bingo, this would be the director of the Revenue Administration Chamber, and for other games, the minister in charge of public finance. While reviewing the application, the authority may request additional information or documents from the applicant. After the review has been completed and the applicant has met the statutory requirements for obtaining the licence or permit, the authority issues a decision granting it.
The specific requirements for the contents of the application vary for different types of gambling games, but in general the following (among other things) must be submitted.
There are no significant differences between the application requirements for land-based and online games, but an applicant for an online betting permit must submit additional documents, such as the technical documentation for the website intended to be used for betting.
Application Requirements – Directors and Shareholders
Members of the management board, supervisory board and the audit committee of each company applying for a casino licence, or a bingo hall or betting permit, must not have been convicted of an intentional crime, and no proceedings concerning criminal offences related to money laundering or the financing of terrorism may be pending against them in the European Economic Area. The same obligations apply to shareholders of at least 10% of the share capital of the company.
In addition, such shareholders must prove that they obtained the shares using disclosed sources of income.
In theory, a licence or permit application should be considered within six months from its submission, while for promotional lotteries, raffle lotteries and “audiotex” lotteries, this period is shortened to two months. Unfortunately, the authorities are not bound by these timelines, and in practice it often takes longer to obtain a decision (up to one year for a betting permit).
The application itself is free of charge, but the granting of a licence or a permit is subject to a fee. The fee depends on the type of game, and the specific amount is different each calendar year, as the Act makes it a multiple of a “base amount” (ie, the average monthly salary). As of 2020, the fees are as follows.
In addition, for several types of games, gambling operators are also required to provide guarantees, which are intended to cover the handing out of prizes, customers’ claims or unpaid gambling tax. Depending on the type of game, the guarantees may be in the form of a bank deposit or a bank or insurance guarantee. The amount of the guarantee is different for each game; in the case of a promotional lottery, it should cover the value of the prizes, and for a casino, it is fixed at PLN1.2 million.
With the exception of gambling tax (see 13 Tax for details), private operators are not subject to any ongoing fees related to holding a gambling licence or permit. The state-owned lottery operator is obliged to pay “surcharges”, a form of additional quasi-tax used to support various state funds related to resolving gambling-related problems, and promoting sports or culture.
Each gambling premises (a casino or a betting point) must be compliant with certain requirements outlined in the Act. For example, each casino must have a CCTV system that records the progress of each game, and an independent power source to ensure that the games are not interrupted by power outages. The premises used for gambling must be listed in the casino licence or betting permit, but no separate licences for premises are issued.
According to the bill amending the Act, which is, as of October 2020, being considered by the government, gambling venues will be able to file certain reports via the internet. The bill also relaxes some restrictions concerning the placement of slot-machine parlours (which may only be opened by a state-owned company), among some other minor changes. All of these amendments are subject to change, or may not be introduced at all.
The only forms of online gambling available for private operators are promotional lotteries (which are not typically associated with gambling) and betting websites. Conducting betting online requires a permit (for an outline of the licensing requirements and process, see 4.6 Application Requirements). Licensed betting operators only provide services to consumers.
Entities such as gaming software providers are free to operate without the need for any licence, and no such licences are in fact stipulated in the Act. Of course, they may not conduct gambling games themselves, as a B2C licence would be necessary for that.
As licensed betting operators may be advertised online (although there is some controversy about this, see 9.4 Restrictions on Advertising for details), using affiliates is also fine in general. Affiliate marketing is still a form of advertising, and must follow all the guidelines applicable both to advertising in general and to the advertising of gambling in particular. Notably, any form of advertising must be clearly identified as such, since covert advertising is considered an act of unfair competition.
Affiliates must also comply with all the rules on advertising for gambling, such as the prohibition against advertising a large set of games, and they must adhere to the obligations on the content of ads (see 9 Advertising for details).
Polish gambling laws do not recognise white-label providers as such, and there are severe restrictions on what activities related to conducting games may be entrusted or outsourced to third parties, especially online. Basically, third-party providers may only act as contractors providing services to online betting operators (such as software licensing), and should not interact with customers or influence the outcome of games. This makes it impossible to operate as a white-label provider in the typical meaning.
There are no significant upcoming legislative changes related to licensed online gambling operators, although offshore operators will likely be affected by the forthcoming amendments related to backlisting measures – see 3.7 Pending Legislation.
The websites of unlicensed gambling operators have been blocked in Poland since 2017. Internet service providers (ISPs) operating in Poland are obliged to reroute their customers who wish to access blacklisted websites’ URLs to a website hosted by the government, where information on the risks of unlicensed gaming are presented. A “DNS blocking” technique is used. As an additional measure, Polish payment service providers are obliged not to provide their services on blacklisted websites.
Blacklisted websites’ URLs are available in a publicly accessible online register. Website owners may appeal against blacklisting, but they are not informed of their website being blacklisted. Some offshore gambling operators are currently trying to fight the blacklisting mechanism in the courts, stating that it is not in line with the EU freedom to provide services, although the Polish courts have been dismissive of these claims so far.
The government plans to expand the blocking measures to also include websites advertising offshore gambling – see 3.7 Pending Legislation.
Online gambling operators, as well as the state-owned operator of slot-machine parlours, are obliged to implement responsible gaming policies, which include:
The responsible gaming policy must be approved by the minister in charge of public finance.
Online gambling operators and the state-owned operator of slot-machine parlours are obliged to provide certain gambling management tools, such as measures for customers to control their engagement in gaming, by limiting the time that may be spent playing (a “timeout”), or setting the maximum amount of money that may be spent during a specific period. Operators are also obliged not to allow their customers to play when there are no funds in their account (they may not accept gaming on credit).
There is no regulation on self-exclusion schemes. A criminal court may, however, impose the penal measure of a prohibition on an individual participating in gambling games and entering gambling premises. This may be imposed alongside a conviction for a crime committed in relation to conducting or participating in gambling games.
Gambling operators are subject to AML regulations, particularly the Act on Combating Money Laundering and the Financing of Terrorism, which sets out the main AML-related obligations for all “obliged institutions”. There is no AML guidance applicable specifically to the gambling sector.
AML compliance is one of the prerequisites for obtaining a casino licence, a bingo parlour permit, or a betting permit. If an officer of a company holding a licence or permit is convicted of money laundering, the regulator is obliged to revoke that licence or permit.
All “obliged institutions” under the Act on Combating Money Laundering and the Financing of Terrorism, including gambling operators, are required to employ financial security measures, which include obligations to:
Among other AML obligations, it is also required to report to the General Inspector of Financial Information any cash payments made or received that exceed the equivalent of EUR15,000, and certain transfers of funds exceeding EUR15,000.
There is no dedicated regulatory or supervisory agency responsible for advertising of gambling specifically, although the body granting a licence or a permit for each specific gambling operation is equipped with a general right to instruct an operator to remedy any violations it finds, and may also consider irregularities in advertising as such.
Radio and TV advertisements are supervised by the National Broadcasting Council, but only broadcasters would be responsible before the Council if, for example, a betting ad was shown before 10pm.
Moreover, violations of advertising laws in the gambling sector are fiscal crimes, and may be prosecuted before a criminal court.
The Advertising Council is a self-regulatory body of the advertising sector. It considers complaints regarding advertisements, and may rule that an advert violates the Code of Ethics in Advertising, although such a decision is not binding.
A very broad set of actions constitutes “advertising” or “promotion” of gambling games under the Act. Any public display of trade marks of gambling operators, or other graphical symbols related to such games, as well as information on the possibility of participating in gambling, is considered advertising. Even the advertising of non-gambling goods or services whose “advertising image”, name or logo is similar to those of gambling services or operators falls within the category of the advertising of gambling games.
Moreover, acts including the public presentations of gambling games; giving out any merchandising items or coupons, or selling them; as well as other forms of public encouragement to participate in gambling games all constitute the “promotion” of such games.
The Act also regulates a specific form of advertising defined as “informing about sponsorship”. Here, betting operators may display their name and/or another identification mark (such as a logo) to inform that they finance or co-finance the activity of individuals or entities. Including any advertising content other than the name and logo, such as marketing slogans, is prohibited for this type of communication. Despite these restrictions, this form of advertising is popular among betting operators, with several sports clubs and national teams being sponsored by them.
The Act defines what constitutes the advertising or promotion of gambling games, and specifies what types of games may not be advertised at all (with certain exceptions), and the extent of advertising permitted.
Advertising gambling games in contravention of the law is a fiscal crime, and sanctions for it are provided in the Fiscal Criminal Code.
As a general rule, advertising and promoting almost any kind of gambling game is prohibited, unless specific provisions of the Act state otherwise. Only “public” forms of advertising or promotion are prohibited, however, so advertisements may be displayed on the premises of casinos or betting points, or on online betting operators’ websites.
There are no restrictions on advertising lotteries (as well as number games run by the state-owned operator) and bingo.
Only licensed betting operators are allowed to advertise on a larger scale, but there are also restrictions concerning the placement and content of their ads. In particular, betting advertisements may not be presented:
There is some controversy over whether this final prohibition, against advertising for betting in “public places”, covers online advertising. The majority of betting operators understand this restriction as only referring to a physical location, and the regulator does not seem to object to this stance.
As to their content, betting advertisements have to include warnings about the risks associated with gambling, the consequences of participation in illegal gambling and a reference to the operator’s permit. They may not feature minors or be addressed to them, and may not include statements or themes that present refraining from gambling in an unfavourable light. Betting adverts cannot invoke associations with certain topics, such as relaxation, sexual attractiveness or professional success.
The Act does not specify any direct sanctions for violations of advertising rules, although the authorities responsible for issuing licences and permits may, as a measure of supervisory power, instruct an operator to cease broadcasting an ad the regulator has found to violate the Act.
Advertising gambling games in contravention of the law is a fiscal crime. It is also a crime to receive benefits from such advertising. The penalty for each of these acts is a fiscal fine. The amount of the fine depends on factors such as the offender’s earnings, other personal circumstances and the severity of the crime. The court may consider the act of such advertising as only a misdemeanour, in which case the penalty would be significantly lower.
Only natural persons may be subject to criminal liability, but if such a person is found to have acted for a company, then the company is jointly liable along with the perpetrator for the payment of the fine.
The minister in charge of public finance must be notified of every change in the capital structure of a company engaged in running a casino, cash bingo parlour, or betting operation where such a change results in exceeding 10%, 20%, 30%, and so on, of the number of votes at the general meeting of shareholders or of the share in the share capital.
The minister must also be notified of any change in the composition of the management board, supervisory board, or the audit committee of such companies, as well as “other changes concerning the company” (such as a change in the address of the company’s registered office).
The minister does not currently approve such changes (this used to be the case until 2015), although if new shareholders or officers do not meet the respective legal requirements (such as those outlined in 10.3 Passive Investor Requirements), then this may be grounds for the revocation of the licence or permit of the company.
Gambling laws do not specify what should be considered a change of control, as this issue is not regulated directly. It is important to be aware that a licence or permit is not transferable by itself; it may only be acquired by asserting control over the company holding it, or acquiring it as a whole.
There are some requirements that investors holding more than 10% of the share capital of the company must meet. In particular:
A failure to meet these obligations is a violation of the statutory requirements for conducting activity in the gambling sector, and the company’s licence or permit may be revoked accordingly.
The authorities are allowed to conduct inspections on compliance with gambling laws.
The regulatory bodies may issue fines for non-compliance with the Act or the terms of a licence or permit. They may also summon operators to comply with the Act or the terms of the licence or permit, and if they fail to observe a summons, or in cases of gross violations and certain other cases, the penalty is the revocation of the licence or permit.
In addition, because conducting unlawful gambling games is also subject to criminal liability, such acts may also be punished under criminal laws (see 3.6 Penalties for Unlawful Gambling for details).
The blacklist of unlicensed gambling websites is also among the regulator’s enforcement measures.
According to the government report on the implementation of the Act, 989 inspections concerning gambling operators were conducted in 2018, and irregularities were found in 99 cases.
In addition, the authorities are actively enforcing the ban against private operators running slot-machine gaming outside casinos. Over 12,000 machines were confiscated in 2019.
According to the government report on the implementation of the Act, the total value of administrative fines imposed by final decisions in 2019 was approximately PLN600,000, while no data is available concerning the number of cases resolved.
In 2019, the criminal courts imposed fines for fiscal crimes related to gambling on 2,124 perpetrators, and the total value of those fines was approximately PLN25 million, although the vast majority of them were probably related to operating illegal slot-machine parlours, which the authorities seem to focus on.
Social games, where participants do not receive cash or in-kind prizes, are typically not considered gambling, although the confusing definition of a “slot machine” may lead to a different conclusion, depending on the design of a specific game.
One of the trends that is clearly visible is the increasing influence of gambling mechanics on online games: loot boxes and similar themes are becoming common in non-gambling video games, which may lead to increased pressure to regulate this issue under gambling laws (so far, the Polish regulator has declared that loot boxes are not gambling, but only a non-binding press statement about the topic was issued).
The esports sector is enjoying a time of significant growth in Poland. Thousands of spectators attended major esports events (before the COVID-19 pandemic) and follow tournaments online, and the media and businesses seem to be slowly embracing the phenomenon.
The majority of betting operators currently accept bets on the results of esports events in the same way as for “traditional” sports. This helped during the pandemic, as esports tournaments were among the few sports events where matches were held despite the lockdown.
Fantasy sports leagues are not directly regulated by gambling laws, and it is not entirely clear whether they should be; this may also depend on the terms of a particular game. Promoters do not seem to be introducing fantasy sports to Poland on a larger scale. The reason for this may be the current, restrictive approach of the regulator. Nevertheless, the top Polish football league has launched a fantasy sports league, and considers it a non-gambling contest (a skill game).
Skill games are not gambling games under Polish law, and the restrictions applicable to gambling do not apply to them. Because of this, some manufacturers of slot machines have been recently trying to introduce machines where – according to their claims – the outcome of the game is not random, but solely depends on the participant’s skill. The authorities seem to be taking a dim view of this, and have been confiscating such machines. It seems likely that the courts will have the final say here.
Blockchain does not seem to be having any impact at present on the gambling market in Poland. The strict laws on online gambling are likely the reason for this because there seems to be no legal "leeway" for licensed operators to use blockchain in their business.
The issue that has recently affected the gambling market the most is definitely the COVID-19 pandemic. For gambling operators in Poland, the spring 2020 lockdown caused the closing of all land-based venues, and with almost all sports events cancelled, online betting operators also suffered severe losses. Because of this, betting operators campaigned for the temporary suspension of gambling tax, but these attempts were unsuccessful.
Gambling operators, with the exception of promotional lottery promoters, are obliged to pay gambling tax. The tax rate and tax base vary for each gambling game.
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