The land-based gaming sector has been relatively stable in the last few years and land-based gaming operators are well established in the Portuguese market. The legal framework in place has been deemed adequate to safeguard the sector as no major innovations have been introduced.
In contrast, the online gambling sector has seen numerous legal developments due to the increasing number of different forms of online gambling that have been brought to the market. In addition, the legal framework has been amended to cope with the technological developments of the online gambling industry.
Decree-Law No 422/89, December 2nd, as amended (“Gambling Law”), applicable to land-based gambling operators, has been subject to minor amendments over the past few years and operating rules for casinos and bingo halls have not changed significantly in recent times.
Before 29 April 2015, online gambling was not regulated. The legal framework for online gambling and betting (Regime Jurídico dos Jogos e Apostas Online) (“Online Gambling Act”), provided by Decree-Law No 66/2015, April 29th, as amended, established a licensing system for the provision of online gambling services with the supervision of the Gaming Regulatory Body and the Gaming Commission (as defined in 4.1 Regulatory Authority).
Online gambling is defined as follows: “games of chance, fixed-odds sports bets, totalisator/pari-mutuel or fixed-odds horse racing bets, in which the player resorts to any devices, equipment or systems that enable the production, storage and transmission of documents, data and information, and that are carried out remotely, through electronic means, computer, telematics, interactive media, or any other means”.
The Online Gambling Act sets out an exhaustive list of games of chance that can be offered in online gambling platforms, including:
Operating new types of games of chance, which are not provided for under the Online Gambling Act, may be authorised by the competent authorities.
It should be noted that sports betting has been classified both as a land-based and an online game. Land-based sports betting is exclusively operated and regulated by Santa Casa da Misericórdia de Lisboa (SCML), a public entity funded by the Portuguese state that operates and monitors social state-run games. On the other hand, online sports betting is accessible to licensed operators and regulated by the Online Gambling Act.
Similarly, horse racing betting can be provided both as land-based and online services. Horse racing betting is defined under the Online Gambling Act, as follows: "Horse racing betting is where the sum of money placed as a bet is associated with a prediction as to a certain kind of result in a previously-identified competition, the outcome of which is uncertain and not dependent on the will of the participants".
Land-based horse racing betting (totalisator/pari-mutuel bet) is exclusively operated and regulated by SCML and online horse racing betting (fixed-odds bet and totalisator/paris mutual bet) is accessible to licensed operators and regulated by the Online Gambling Act. Online horse racing betting operators can offer betting on horse races organised in Portugal or abroad, provided that the races are listed on the official list approved by the Gaming Regulatory Body (as defined in 4.1 Regulatory Authority).
The Gambling Law provides for the possibility of games of chance (and gambling-related activities) being operated in several gaming establishments, including (i) land-based casinos; (ii) vessels, aircrafts, off-site casinos and off-site arcade/amusement machines; and (iii) land-based bingo halls.
Casinos are establishments that operate games of chance, as well as complementary activities, in accordance with the terms and conditions provided for under the Gambling Law.
Casinos in Portugal operate under a concession regime and there are currently 12 land-based casinos that have entered into concession agreements:
The Gambling Law and ancillary legal instruments set out the games of chance that can be offered in casinos, including: (i) baccarat punto banco; (ii) French banque; (iii) boule; (iv) cussec; (v) écarté banco; (vi) French and American roulette; (vii) blackjack/21; (viii) chukluck; (ix) trente et quarante; (x) limited bank baccarat; (xi) craps; (xii) keno; (xiii) baccarat chemin de fer; (xiv) open bank baccarat; (xv) écarté; (xvi) bingo; (xvii) slots; and (xviii) non-banking poker (including the variants Omaha, hold’em and synthetic), tournament poker and Caribbean stud poker.
Operating new types of games of chance (which are not provided for under the Gambling Law) may be authorised, by the competent authorities, upon request of the operators.
Vessels, Aircraft, Off-site Casinos and Off-site Arcade/Amusement Machines
The Gambling Law sets out that, in certain circumstances, the competent authorities may provide for the possibility to operate games of chance in vessels or aircrafts, as well as to operate non-banking games of chance and arcade machines in other places of relevant touristic interest.
Operating games of chance inside these establishments is subject to prior authorisation of the competent authorities. With regard to the applicable legal requirements, the operators should consider those applicable to the operation of games of chance inside casino halls, which in turn are equally applicable to games of chance being carried out off-site.
Additionally, the Portuguese legal framework provides for the possibility to operate amusement machines, which are classified as any machines that offer games that are exclusively or fundamentally reliant on the player’s expertise and (i) do not grant any prizes in cash, chips/tokens (fichas) or items with economic value but allow for the possibility to extend the duration of the game based on the player’s score, or (ii) grant a prize with an economic value, which may not exceed three times the amount spent by the player.
Land-Based Bingo Halls
Land-based bingo halls are exclusively allowed to operate and engage in bingo games, including traditional and electronic bingo, therefore being precluded from the possibility to operate and provide any type of game of chance other than bingo.
Bingo halls in Portugal operate under a concession regime and there are currently 14 entities that have entered into concession agreements:
The Portuguese legal framework also provides for the possibility to operate and offer bingo game in casinos that have entered into concession agreements.
Under Portuguese law, there are a number of state-run games (jogos sociais do estado) that are operated by SCML under an exclusive licence. SCML’s exclusive licence provides for the right to operate, among others, national lotteries.
For private operators offering gambling services, the most important legal instruments are the following.
Other Relevant Instruments
The legal framework applicable to state-run games (jogos sociais do estado) includes:
Gambling is defined under the Gambling Law as “all games whose outcome is exclusively or fundamentally contingent on chance” and in the Online Gambling Act as “all games that involve a player committing an amount of cash, the outcome of which is exclusively or fundamentally contingent on chance".
The Online Gambling Act provides for the definition of land-based gambling: "gambling or betting carried out in casinos, bingo halls or other places previously authorised for such purpose and which require the physical presence of the player".
The Online Gambling Act provides for the definition of online gambling: "games of chance, fixed-odds sports bets, totalisator/pari-mutuel or fixed-odds horse racing bets, in which the player resorts to any devices, equipment or systems that enable the production, storage and transmission of documents, data and information, and that are carried out remotely, through electronic means, computer, telematics, interactive media, or any other means".
The Gambling Law sets out criminal and unlawful administrative offences for certain actions. The key offences include illegal operation of gambling activities, presence in illegal gambling sites, coercion to the practice of gambling, fraudulent gambling, usury for gambling and illegal commercialisation of gambling material.
Similarly, the Online Gambling Act sets out key offences, including illegal operation of online gambling and betting platforms, and fraud and disobedience to the regulatory entity.
The Portuguese legal framework for gambling activities sets forth the penalties applicable to unlawful gambling, including criminal charges (including imprisonment), misdemeanours (simple, serious and very serious), fines and administrative sanctions, which will be applied depending on the unlawful action carried out, the degree of culpability and any mitigating circumstances, among others.
There is no pending legislation. However, there is the expectation in the sector that the legal framework might be amended in the near future (please refer to 12.6 Reform).
The duty to control, monitor/supervise and regulate the operation and practice of gambling activities in Portugal is jointly carried out by:
The Portuguese regulatory framework has been constructed in a way that focuses mainly on a prescriptive approach.
Laws, regulations and regulatory entities mostly aim at determining objective “personal”, professional and technical requirements that are checked upon the attribution of licences (eg, acceptance criteria that operators need to comply with in order to lawfully carry out gambling activities in Portugal) but that are also followed up during the operation of the gaming business of the local operators.
This is particularly the case in online gambling activities as the licensing process has been constructed in a way that forces operators to demonstrate they effectively meet the applicable requirements when licensing and throughout the term of their licences.
Land-Based Gambling – Concession Agreements
To operate a land-based casino or a bingo hall, operators must enter a public tender procedure to be granted a concession. There is no specific limit on the number of concessions that can be granted, but these are dependent on the public tenders effectively launched by the public authorities. It should be noted that concession agreements cover a specific geographic area.
Online Gambling - Licences
The Online Gambling Act has established a closed licensing system. In order to operate an online gambling platform in Portugal, operators must be duly licensed; ie, unlicensed platforms or platforms licensed under foreign jurisdictions should not be accessible to anyone located within the Portuguese territory.
There are currently four types of online gambling licences provided for under the Online Gambling Act.
As mentioned previously, to operate a land-based casino or bingo hall, operators must enter into a concession agreement, and these are dependent on the public tenders effectively launched by the public authorities. Entering into a concession agreement entails a considerable amount of time and paperwork to be handled by the prospective operator.
As regards online gambling, operators must be granted a licence that is subject to an extensive and bureaucratic process that needs to be taken care of by the applicant, which typically takes between six and eighteen months to be completed. This said, licences are not readily available and operators intending to operate in the Portuguese market must ensure they account for the licensing procedure.
The public tender documents will determine the duration of the concession agreements and the possibility of these being renewed.
Online gambling licences are valid for three years and can be extended for equal periods of three years, provided the operator meets the legal requirements for extension.
Concession Agreements for Land-Based Activities
To be eligible to participate in a public tender to be granted a casino concession, the following will be required:
The application procedure takes the form of a public tender promoted by the government. Each tender has a specific time limit as there is no general time limit imposed by law. Therefore, the government has a great margin of discretion in structuring a public tender and a great amount of time to assess each application.
The decision to enter into any contract, approve the tender proceedings, identify the required qualifications of the applicants, grant the concession and approve the initial drafts of the concession agreements, as well as its subsequent execution, are under the responsibility of the member of the government in charge of the tourism sector.
Tender documents should set forth, among others:
To operate a land-based casino, operators must enter into a public tender procedure to be granted a concession, with the application procedure substantially similar to the one provided for land-based casinos.
Online Gambling Platforms
There are currently four types of online gambling licences provided for under the Online Gambling Act.
To be eligible to be granted an online gambling licence, the following conditions must be met.
The licence application must be submitted on the standard form approved by the Gaming Regulatory Body and it must be duly accompanied by the required documents. These documents should demonstrate that the prospective operator complies with eligibility requirements.
The issue of the licence to operate an online gambling platform is subject to:
Finally, there are several requirements applicable to legal representatives of the operators, who must demonstrate they comply with the applicable law, notably to demonstrate they are in good standing (idoneidade) to carry out their duties; eg, any criminal convictions should prevent the legal representatives from carrying out their activities as legal representatives of the operator.
Timing is dependent on the public tenders effectively launched by the public authorities. As mentioned, each tender has a specific time limit as there is no general time limit imposed by law. Therefore, the government has a great margin of discretion in structuring a public tender and a great amount of time to assess each application.
Once the application has been submitted, the procedure typically takes between six and eighteen months to be completed. The Portuguese competent authorities have been receiving a greater number of application requests to operate online platforms, which may ultimately delay the licensing process. In any case, timings will mainly depend on the responsiveness of the operators to the authorities’ clarification requests.
Application fees are defined on a case-by-case basis on each public tender or concession agreement.
The homologation of the gambling technical system is subject to payment of the following fees:
The cost of issuing or extending the licences is as follows:
If the application request is accepted, the applicant must also provide the Gaming Regulatory Body with two deposits (for each licence granted by the Gaming Regulatory Body):
Ongoing annual fees might be imposed on land-based gambling operators on a case-by case-basis.
As a general requirement, land-based casino premises must meet standards of functionality and comfort equivalent to a high-class tourism establishment and the specific requirements should be provided under the tender documents. It must be noted that any construction works carried out for any reason other than conservation purposes will be subject to approval by competent authorities (notably, Inspeção Geral de Jogos and Comissão de Apreciação de Projetos e Obras).
Land-based casino premises are otherwise subject to construction and operation requirements and licences that are applicable to any other premises that is open to the general public.
The land-based gambling legal framework has not changed significantly in recent times, including in relation to the licensing system and operation rules, and it is not expected to change in the near future.
The licences provided for under the Online Gambling Act are exclusively granted to B2C operators that comply with application requirements mentioned in 4.6 Application Requirements. These operators contract directly with the clients through their online gambling platform, which must have been duly licensed and certified by the competent authorities. This said, the online gambling licences issued in Portugal are related to B2C operators.
The Portuguese legal framework does not provide for the possibility of B2B operators being granted a licence to operate in Portugal. Typically, B2C operators subcontract online providers of gambling services, but the licence itself is granted to B2C operators and the competent authorities will ensure the latter comply with all technical requirements.
There are no specific requirements/measures to regulate the use of affiliates.
The licences are granted to specific operators that must comply with all legal and technical requirements. Licensing and regulatory requirements apply and directly to operators, not to their providers (white-label or otherwise).
Please refer to 12.6 Reform.
Whenever the Gaming Regulatory Body detects a website that provides online gambling and betting operated by an entity that is not duly licensed to operate in Portugal, it notifies the entity to cease from the activity and close the online gambling and betting website within a maximum period of 48 hours. Failure to comply with these instructions will result in the issuance, by the Gaming Regulatory Body, of an order to ISPs to block access to such illegal website, without prejudice to pursuing criminal charges against the website's operator.
The integrity, reliability and security of gambling and betting operations must be guaranteed at all times. Operators and competent authorities must raise awareness of the complexity of these gambling activities, notably by drafting codes of conduct and disseminating good practices.
Before commencing activity, operators shall set up a plan and adopt measures to ensure responsible gambling and provide the players with information to foster moderate, non-compulsive and responsible attitudes.
The online gambling technical systems must provide for the possibility of players limiting their gambling activity, including:
In addition, the Online Gambling Act sets forth that online gambling platforms should implement mechanisms that provide for the possibility of players excluding themselves from online gambling. The self-exclusion period shall have a minimum duration of three months and shall continue until the date stipulated by the player or, in the absence of such stipulation, for an undetermined period of time.
Without prejudice to the minimum period of three months referred to above, the player might terminate the self-exclusion period, in which case the termination will take effect within the period of one month counted from such decision.
Similarly, the Gambling Law provides for the possibility of players requesting to be prohibited to enter gambling halls for a period that should not exceed five years.
The 4th Anti-Money Laundering Directive (Directive (EU) 2015/849, May 20th, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing), which subjects all operators to anti-money laundering rules, is transposed into Portuguese law by Law No 83/2017, August 18th.
All operators are subject to specific obligations that aim to prevent money laundering and terrorist financing, including the following:
The Direção-Geral do Consumidor is the entity responsible for supervising publicity in Portugal, with the Publicity Code (as defined previously) the main legal source in this field.
Advertising is defined as “any form of communication made by entities of a public or private nature, in the course of a commercial, industrial, craft or liberal activity, with the direct or indirect purpose of:
It is also considered advertising “any form of communication by the Public Administration, (...) whose direct or indirect objective is to promote the supply of goods or services”.
The Publicity Code states that the advertising of gambling and betting must:
The main prohibitions include:
Penalties for infringing advertising regulations vary from pecuniary sanctions to seizure of objects used in the commission of administrative offences, temporary bans, temporary closure of the premises or establishments where the advertising activity takes place, as well as the cancellation of licences or permits.
At least 60% of the share capital of the operator must be represented by shares that allow the issuer to identify, at any time, the holder of such shares. The entity that has entered into a concession agreement or granted a licence must notify the Gaming Regulatory Body of any acts or contracts that result in the acquisition, transfer or encumbrance of such shares.
Land-Based Concession Agreements
The acquisition of shares representing more than 10% of the share capital of the concessionaire or any other transfer of shares that, directly or indirectly, results in the change of control of such company is subject to the prior consent of the member of the government in charge of the tourism sector. Additionally, tender proceedings can provide for specific limitations on the transfer of shares.
Licences can only be transferred/assigned with the prior authorisation of the Gaming Regulatory Body. For this purpose, a licence transfer/assignment shall be deemed to have occurred in the event of restructuring of the company that results in the transfer of the licence to another entity by means of a merger, split, entry of assets, among others, as well as in the case of transfer, in any legal form, of a direct or indirect stake in the share capital of the operator whereby the acquirer will hold the majority of the share capital of the operator or hold the majority of the votes or the possibility to appoint more than half of the members of the board of directors.
There are no specific requirements for passive investors in acquisitions or changes of control, other than those that would result from a transaction triggering competition rules.
In addition to the criminal, civil and administrative procedures that may be initiated against operators, the regulatory bodies have the powers to cancel or suspend licences granted to online gambling operators as well as to terminate or suspend concession agreements.
Sanctions resulting from unlawful gambling activities are fully enforceable before national courts, provided the competent authorities have carried out the relevant proceeding in accordance with the applicable laws.
Under the Online Gambling Act, operators are required to provide a security deposit of EUR500,000, as guarantee of their legal obligations, including the payment of financial penalties. The Gambling Law sets forth that financial penalties are enforced by tax courts, within the basis of the instructions given by Inspeção-Geral de Jogos.
Social gaming is currently not specifically regulated in Portugal.
Currently, eSports is not specifically regulated in Portugal.
Fantasy sports is currently not specifically regulated in Portugal.
Skill gaming is currently not specifically regulated in Portugal. However, the provision of any games whose results depend exclusively or fundamentally on the player’s skill that award prizes in money, chips or any other means with economic value is not allowed under Portuguese law.
Blockchain-related gambling is not yet regulated in Portugal.
No developments or legislative amendments are expected in land-based gambling.
The Online Gambling Act received constant and heavy criticism within the gambling community during its implementation procedure, with the online gambling tax (IEJO) as the main subject of criticism. Associations like the Remote Gambling Association and the Portuguese Online Gamblers Association have expressed their discontent, claiming that this tax system forces gambling operators to increase their operational margins, targeting the burden of the tax directly on the player. In their view, this in turn will lead to the loss of competitiveness for regulated operators and encourage consumers to use the non-regulated markets. Taking into account how heavily the tax regime has been criticised by operators, it is likely that any major change to the law will certainly involve tax-related issues.
In that regard, an initial draft of the Portuguese State Budget for 2019 provided for an amendment to the tax regime: the IEJO was to be set at 25% levied on the total revenues of the operator. Said measure ended up not being provided for under the approved version of the Portuguese State Budget for 2019.
Further to that, the Gaming Regulatory Body has issued a report (which has not been publicly disclosed) that includes several suggestions for improvement of the online gambling legal framework.
In addition, the Portuguese government has created a working group, in late January 2019, to discuss the tax regime applicable to online gambling as well as the horse racing betting industry. There is also no publicly available information about the conclusions of said group.
In any case, the general feeling is that a change to the tax regime should be expected (and, more specifically, to change fixed-odds sports betting from a turnover/volume of bets amount to a revenue-based taxation) and to enter into force with the next Portuguese State Budget (2020).
Land-based casino games are subject to a special gambling tax (IEJ), which varies according to the geographic area where casinos are located.
Land-based bingo in bingo halls is subject to stamp duty of 25%.
Online gambling is subject to a special online gambling tax (IEJO). There is a distinction between the following.
When the fees charged by the operator are the sole revenue deriving directly from operating games of chance, fixed-odds sports betting and fixed-odds horse racing betting, in which the players play against each other, the IEJO is levied on these fees at the rate of 15%.
With the exception of the above-mentioned taxes, gambling operators and players are not subject to corporate income tax, personal income tax or stamp duty on matters related to online gambling.
State-run games are subject to stamp duty of 4.5% on the amount of the bet and of 20% of the amount of the prize that exceeds EUR5,000.