EGBA Cautions That An EU iGaming Tax Would Be “Fundamentally Unrealistic”

Attempts to set an online gambling tax in the European Union have received criticism from the European Gaming and Betting Association, which supports the idea that if the tax is successful, it will probably favor illegal and unlicensed operators and lower tax revenue for member nations.

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Recently, this week, the Budget Committee of the European Parliament held a meeting to discuss the EU’s upcoming long-term budget. The time span from 2028 to 2034 will be covered with the Multiannual Financial Framework. This event worked quite positively, as the committee considered several possible ways for the revenue streams in the realm of the EU budget. One of these was an online gambling tax for the entire EU, which MEP Victor Negrescu originally suggested back in February.

According to the MEP, this could potentially raise up to €28 billion over the course of the budget, or in the range of €2-€4 billion yearly. Before the committee included this levy in the ruling, the proposal was already co-signed by twenty MEPs.

The EGBA, a popular trade association for the entire industry in the EU, has warned against this strategy. Furthermore, the organization clearly stated that the following taxation system, in addition to the national gambling taxation, would supposedly be “fundamentally unworkable”.

The organization remarked on its concerns and suggested that a fee would ensure the safety of the customers at the expense of unregulated operators. It also claimed that instead of increasing income, it might actually lower tax collections for the member EU states.

EGBA: The sole winners are the illegal operators

The first initial report on the long-term budget was approved by the Budget Committee. Nine MEPs voted against the budget, five were absent from the voting, and a total of 26 MEPs supported it.

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The vote, according to the EGBA Secretary General Maarten Haijer, is simply a speculative demand to investigate the idea and does not demonstrate a complete proposal or decision. He also remarked that there is no legal foundation for defining, setting, or collecting such a fee because gaming regulations are not set on the EU level.

In another response, the Secretary General included that setting aside these legal obligations, adding yet another tax on top of the existing national taxes, where, in some instances, licensed operators are already taxed a 50% or more, would only potentially benefit unlicensed operators, illegal presence in the region. He also reaffirms the fact that since illegal operators pay no such tax rates at all, they are able to give more eye-catching and attractive products and prices to their respective users.

Another aspect of this change could also harm the safety measures in the region, since unauthorized operators in many cases disregard the user protections on their websites, which regulated operators strictly follow, as mentioned by the General Secretary.

The Final Decision

The EU Council, acting on behalf of 27 member states, should reach an agreement with an anonymous decision about the new revenue source. At its session in late April, the European Parliament is scheduled to vote on the Committee’s opinion. After that, formal MFF talks will start, and a decision is likely to be made in late 2026.

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Source: egba.eu