Poland’s Gambling Tax Problem Is Fueling Growth of the Black Market

Poland has one of Europe’s fastest-growing gambling markets. Yet operators say the country’s tax system is making legal betting less competitive and giving illegal platforms room to expand.

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That contradiction sits at the heart of an increasingly awkward debate. Gambling revenue continues to climb, but many licensed companies believe the current model is pushing customers toward unregulated websites instead of strengthening the regulated sector.

A Tax System Few Markets Would Copy

The foundations of Poland’s gambling framework date back to 2009, when political fallout from the so-called Blackjack-gate scandal reshaped regulation. The result was one of Europe’s toughest tax regimes.

Licensed sports betting operators pay a 12% turnover tax rather than a tax on gross gaming revenue. Online casinos remain reserved for state-owned operator Totalizator Sportowy, while players also face a tax on winnings collected before payouts.

For bookmakers, the biggest challenge is the turnover tax. Because it is calculated before winnings are paid, operators must protect themselves against uncertainty by keeping higher margins. That leaves customers with less attractive odds than they would typically find in markets taxed on gross gaming revenue.

Industry data illustrates the impact. H2 Gambling Capital projects Poland’s sports betting sector will generate €1.62 billion in gross gaming revenue from roughly €5.07 billion in turnover during 2026. The implied margin is about 32%, well above levels seen in many regulated European markets.

Growth Hasn’t Solved the Illegal Market

Despite the tax burden, Poland’s gambling sector continues to expand. H2 expects the combined online and land-based market to reach almost $5 billion in gross gaming revenue this year after several years of double-digit growth.

That growth has weakened the political case for reform. If the market is already expanding and tax revenues remain strong, lawmakers have little immediate incentive to change course.

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The picture becomes more complicated when illegal gambling is considered.

Estimates suggest online sports betting channelisation ranges between 78% and 88%, but online casino performs far worse at roughly 59%. A separate study found most Polish online casino players have accounts with unlicensed operators, while industry figures indicate the country’s unregulated gambling sector doubled in size between 2017 and 2025.

Several analysts believe replacing the turnover tax with a tax based on gross gaming revenue would make legal operators more competitive and encourage more customers to remain within the regulated market. The trade-off is clear. Government tax income would likely fall in the short term before any gains from market expansion could offset part of the decline.

Monopoly Debate Shows No Sign of Ending

Tax is only one part of the discussion.

Since 2017, Poland has reserved online casino for Totalizator Sportowy. Industry participants argue the monopoly unintentionally drives customers toward offshore platforms because licensed betting brands cannot offer the casino products players are already seeking elsewhere.

The state operator takes the opposite view. Its representatives maintain that removing the monopoly would not eliminate illegal gambling and argue enforcement should focus on cutting off payments to unlicensed websites instead. Public opinion also appears relatively supportive of keeping the monopoly in place.

Politics Remains the Biggest Obstacle

Meaningful reform appears unlikely before Poland’s 2027 parliamentary election.

Neither of the country’s two largest political parties is viewed as particularly supportive of gambling liberalisation. Smaller political groups have expressed greater openness to reducing state control, but they currently lack the influence needed to reshape legislation. National security, defence spending and broader economic priorities continue to dominate the political agenda, leaving gambling reform well down the list.

Some in the industry are watching Finland’s planned transition away from its online gambling monopoly as a possible test case. If that model succeeds, it could strengthen arguments for change elsewhere in Europe, including Poland.

For now, Poland remains caught between two competing realities. The legal market keeps growing, but so does the unregulated one. As long as that balance persists, pressure for reform is unlikely to disappear.

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Source: igamingbusiness.com