Outlook for the Portuguese gaming market 
Expert Insight Provided by Pedro Cortés, Managing Partner at Lektou

In 2020, the impact of the Covid-19 has been felt especially in the land-based casino space with a decrease in GGR of 50% percent when compared with 2019. The total GGR in 2020 was approximately 160 million euros.  

In the online gaming space, we have seen two trends:
  • Fixed-odds sports betting has seen a significant decrease during the first four months of 2020, due to the suspension of the sports competitions; this trend changed after May, with an increase year on year of 56.6 percent – with a GGR of EUR 161.9 million and a total handle of EUR 808.1 million. 
  • Online games of fortune had seen during the year 2020 an increase of 43.4 percent when compared with 2019 – with a GGR of EUR 174.5 and a total volume of bets was EUR 4.84 billion.
The year 2020 marked the term of two concession contracts – for the Estoril (which includes Lisbon) and Figueira gaming zones. Despite since 2019 the official speeches have been mentioning that there would be a public tender, in line with the Portuguese Gaming Law, and is, to say the least, debatable whether such extension could occur, the fact is that the Government has decided to extend until 31 December 2021 the concessions for those two gaming zones. It is expected that a new public tender may be launched. 

The state of emergency declared by the President of the Republic which was after March extended several times and was re-enacted in November until very recently. The land-based casinos were highly affected, as the gaming areas were mandatorily closed during the state of emergency.

Another important landmark that is yet to have a total effect was the change in the budget law for 2020 of the tax payable by the online operators. From a variable percentage that could ruin the operation, the Government approved a change which is deemed to attract more investors to the online gaming space. 

The online gaming tax is levied differently based on the type of gambling:
  • Games of fortune and chance – special gaming tax of 25% on the GGR (before 1 January 2020 it was between 15% and 30%) 
  • Fixed-odds sports betting and horse racing – 8% on the handle (before was between 8% and 16%)
  • Pari-mutuel horse racing – 25% on the GGR (before it was between 15% and 30%) 
  • Non-banked games (Poker tournaments and bingo) – 25% on the vigorish (before was 15%).
  • Fixed-odds sports betting and fixed odds or pari-mutuel horse racing when players play against each other (betting exchange) – 35% on the vigorish (before was 15%).
Despite some say that it might not be connected, the fact is that three more licenses were granted by SRIJ during the course of 2020. There was also a significant increase in the number of players registered in the online gaming platforms, especially in the 4th quarter of 2020, with an increase of 137 million players recorded. 

On the enforcement side, in the same 4th quarter SRIJ made 15 notifications to shut down the illegal websites and blocked 49 websites.[1]

In what regard to casino employees, there were recently some demonstrations at the Parliament in which they have shown their disagreement with the fact that the wagers were effectively reduced by 70% with the assistance that the Portuguese Government gave during the lay-off of workers, as their wages were based on tips which during 2020 were almost inexistent with the closure of the land-based casinos. 

As far as we understand there were some years ago some preliminary works to amend the Portuguese Gaming Law, as its initial version is dated 1989. Since then, and without prejudice of the enactment of the Online Gaming Regime, the fact is that we may conclude that the legal model for the industry is still based on the law of 1927. The gaming industry has seen major developments in recent years, and it is now the time to make a significant reform in the model to take advantage of the tourism boom Portugal has experienced, as well as to develop other tourism areas. For instance, why not considering a Las Vegas-style tourism and entertainment destination in Alentejo with the Beja Airport – since its construction seen as a “white elephant” – that could be used as an entry point for the millions of tourists who visit Portugal?