Permit for mutual betting in Poland

Betting can be offered in Poland only by those entities that have received a special permit for placing mutual bets. The provisions that regulate this are written in the "act of November 19, 2009 on gambling", but it was only the amendment of the Act adopted on December 15, 2020 that caused the legal regulations concerning the betting industry to be enforced to a much greater extent. As a result, the number of bookmakers operating in African has declined sharply, and some of the companies that previously organized sports betting illegally have begun efforts to obtain a permit for betting. However, obtaining it is not an easy task, not everyone can apply for a special license. In this article, we will look at what is the procedure for granting a permit for the establishment of mutual bets and what conditions must be met by a company that wants to legally offer mutual bets in our country.

Background information

To begin with, let's note that a permit for the establishment of mutual bets can be obtained for activities at ground points or for activities via the Internet . Each of these types of bets requires a separate license, although a bookmaker can apply for both types of permits and get both . Moreover, most legal bookmakers in Poland, it has a permit to arrange betting at fixed points and at the same time online. However, the specifics of the procedures for each type of permit are slightly different and they entail different costs. The second important point is that the permit for mutual betting is not issued "once and for all". The bookmaker gets it. for a period of 6 years , and after this time may occur one-time extension of the concession for the next 6 years.

It is also worth knowing that the application for a permit must be revived at the latest 6 months before the planned start of betting this is the amount of time the Finance Minister has to consider the proposal. Of course, it is best to do this even earlier, because if the submitted documentation does not meet certain formal requirements, the applicant is called to remedy deficiencies . If the company that revived the application does not make amendments within 7 days of receiving a letter on this subject ,the case will not be considered. In addition, even when the formal requirements are met, there may be some ambiguities regarding the substantive aspects of the application, and then the applicant must clarify or correct the documentation . If the Minister of finance issues a negative decision, the applicant he can appeal against it. within 14 days of receipt of the decision, and if the application is left without consideration within 7 days of service of the order, the complaint may be revived.

What does the permit cover?

A mutual betting permit shall always include the following elements:

• company name who received them,
• description of the shareholding structure or name shares, and list of names persons forming the management board and supervisory board of the company,
• the location of the betting organisation and the type of bets offered ,
• information, are mutual bets organized online and if so, so too page address internet where bets will be placed and age verification rules players ,
• conditions of authorisation the company in force,
• deadline for the start of the provision of services in terms of the organization of betting in all fixed premises or on the websites submitted in the application.

Legal form of the company

Anyone considering entering the betting market needs to know that applying for a permit to place mutual bets can only come to life Joint Stock Company be a limited liability company whose registered office is located in Poland . As for the companies whose the headquarters is located outside the country , they can apply for a license, provided that they are again Joint-Stock Companies or limited liability companies, as well as companies that operate under the rules applicable to the listed companies, and their registered office is located in the state member of the European Union or the European Free Trade Association (EFTA). However, these foreign companies must meet an additional condition, namely to designate a representative of the company to Poland or create a special branch on the territory of our country . The representative is supposed to act on behalf of and on behalf of the company, and therefore must have a power of Attorney authorizing him to conclude civil law contracts on its behalf. He is also responsible for representing the company in tax matters (gaming tax) and keeping records in Africanm.

In addition, the Gambling Act specifies what requirements must be met not only by a representative of a foreign company, but also by shareholders of the company (African or foreign), members of the management board, supervisory board, audit commission or proxies. They must have an impeccable reputation, and for example, they cannot be convicted of a tax crime. in the territory of a country belonging to the European Union.

Any company that wants to revive the application for a permit for betting must also have share capital the right height. The minimum amount allowed by the Gambling Act is $2 million or its equivalent (conversion according to the NBP exchange rate), if the share capital is expressed in foreign currency.

Application for authorisation

As already mentioned, the application for a permit for the establishment of reciprocal bets and a set of required attachments must be $married both if the company intends to offer betting on the network of land-based points of sale, and via the Internet. Below is a list of those points and documents that must be included in the application for permission to arrange betting (we have not included points related to other gambling ):

1. company documents , including shareholders, board members, etc.:

• copy of the notarial deed of the agreement or the company's articles of association and its number in the National Court Register – in the case of companies established in African, and in the case of companies established outside the country – copy of the agreement / articles of association and documents relating to the representative or African branch of the company,
• nominal value of the shares or units together with their nominal value,
• information on the legal and financial status of the company,
• personal data of shareholders, members of the management board, supervisory board, audit committee of the company and persons who will manage and data on the legal and financial status of commercial companies that are shareholders of the company,
• certificates of non-regulatory compliance with taxes, Social and health insurance contributions and customs duties,
• a certificate from shareholders, members of the management board, the supervisory board and the audit committee that they have not been convicted of a criminal offence (including tax offences) and a statement that there are no proceedings pending against them in the EU or EFTA states concerning money laundering and the financing of groups or terrorist activities,
• documents that confirm the compliance of the company's activities with the regulations relating to money laundering and terrorist financing,
• documents that certify the legal source of capital,
• financial statements covering the previous financial year and the audit report, and in the case of a new company-a statement of compliance with applicable accounting regulations,
• foreign companies that conduct betting activities in another EU or EFTA state-documents confirming this fact.

2. documents relating to planned activities in terms of offering betting services:

• copy of documents confirming the right to use the building or premises where betting will be accepted,
• information on the planned date of launch of services in the field of mutual betting,
• a description of the type and number of bets that will be offered and whether they will be available online,
• if the company plans to offer mutual bets online:
  + internet domain name (top-level domain must have ".pl " ending),
  + technical documentation of the online service where bets will be accepted,
  + description of the planned rules for verifying the age of players,
  + examination of evidence of participation in mutual bets, which will certify their protection from unauthorized persons, as well as the ability to verify their authenticity.
• rules determining how the capital of a betting company will be stored and recorded,
• information on projected employment and job listings,
• description of the rules of operation of the point of sale of betting shops,
• economic and financial study, which should include forecasts of the investment and its profitability,
• draft rules of the game,
• conditions for obtaining the required security,
• a document certifying the consent of the organizers of sports competitions to use their results.

Costs and financial issues related to obtaining a permit

To obtain a permit for the organization of bookmaking, you need not only to meet the formal requirements and prepare for the preparation of extensive documentation, but also to have the appropriate large financial resources . As we have already indicated, a company that intends to apply for a permit for the establishment of mutual betting must have share capital not less than $2 million . In addition, it must pay the statutory fees and provide the required financial security.

Authorisation fees

First, the permit for betting is not issued free of charge. First, the company has to pay the cost. authorisation fees , which constitutes 2000% of the base amount . The base amount in a given calendar year is equivalent to the amount of the average monthly salary (taking into account data from the enterprise sector, but excluding the payment of bonuses from profit) from the second quarter of last year. The amount of this amount is indicated in the notice in the Official Journal of the Central Statistical Office (GUS). For example, for 2023, the base amount is $ 4,811.42, so the permit fee is $ 96,228 (the amount needs to be rounded up to the full $OTH).

In addition to the licensing fee, the company must pay:

• for each planned fixed premises 50% of the base amount,
• for the organisation of online betting 2000% of the base amount,
• for each website which will be used to offer bets-5000% of the base amount.

The final cost of issuing a permit for mutual betting therefore depends on whether the company wants to operate only through ground points (and then what number of points it plans to run), only through the Internet (most often companies use only 1 website), or whether it intends to offer betting both in points and online.

Financial security

Another financial issue is financial collateral requirement which, in accordance with the provisions of the Gambling Act, is to protect the financial interest of players and to secure the fulfillment of the bookmaker's tax debts. On the one hand, the money deposited for the purpose of providing security is therefore not at the expense of obtaining a permit, since it is intended to be in approx $ osci available for company however, for the duration of the bookmaking activity they are "frozen" . When can the security be released? That is, when the tax liability expires or it is no longer possible for it to arise again, and therefore the company will cease to provide betting services and settle all claims for gaming tax, as well as when players will not be able to make claims to the bookmaker, as they will be subject to the statute of limitations.

Amount of financial security to be provided bookmaker , it depends on whether it intends to offer betting at fixed points or online. For plans to launch a network of on-site points of sale, for every 3 premises, a $40,000 security deposit must come to life. $ . Going forward, the company that plans to conduct:

• 4-6 premises must $come to Life 2 security,
• 7-9 premises-3 security,
• 10-20 premises-4 security,
• 21-30 premises-5 security,
• 31-40 premises-6 security.

If the company wants to open more than 40 points of sale of mutual bets, for each "started" 10 points needs additional security . For example, to run 100 sites you need to provide 12 security, but to open 101 sites you need to provide another 13. security.

As for bookmakers who want to organize online betting only the problem is simpler-then financial security is $ 480,000. $ . As for the form of collateral, it can take the form of bank guarantees or insurance, or a deposit of $married to a designated bank account.

Amendments to the authorisation

The company applying for a betting permit receives it within 6 months of the request, as long as all formal requirements are met and the submitted documentation does not raise any objections. The permit is valid for 6 years, but it is also possible to make changes to it. Changes may relate to :

• location of ground points (but not increase their number),
• domain names of websites on which reciprocal bets are offered (but not increasing their number),
• types of betting offered,
• conditions met by the bookmaker, in particular related to financial security,
• technical conditions for User Registration.

If the bookmaker wants to make certain changes to the wagering permit, it must $come to life relevant application to the Ministry of Finance .

You also need to know that changes to the company itself you should also report to the Minister of Finance not later than 7 days from the date of their registration in the KRS. These include certain changes in the structure of the company's share capital and changes in the composition of the management board, supervisory board or audit committee of the company. The notification of the above changes should include the information and documents required by the Gambling Act (articles 52 and 53). In addition, companies that have their Registered office outside African must inform the Minister of Finance of the termination of the contract with the representative of the company and of the signing of the contract with the new representative, and also provide the required documents on this matter. Other changes to the betting company should also be reported and documented by it.

Risk of withdrawal of authorisation

If an entity obtains a permit for betting, it should count on the possibility of its withdrawal. The Minister of Finance may withdraw the authorisation in whole or in part in the following situations::

• within a specified period of time, the company will not remove a factual or legal situation that is contrary to the regulations on betting activities or the terms of the permit or the regulations,
• there will be a clear violation of the terms of the permit, the rules or other conditions of the bookmaking business,
• the share capital will be reduced to less than $2 million,
• the company will cease to operate in the field of mutual betting,
• a shareholder who is a member of the management board or the Supervisory Board of the company will be convicted in the territory of the EU or EFTA of an offence related to money laundering or terrorist financing,
• in a given fixed point, the participation of a player under the age of 18 in betting betting will be determined twice.,
• the company will not demonstrate the compliance of its actions with the laws that relate to the Prevention of money laundering, as well as the financing of terrorism,
• the company fails to update its financial statements and audit report or when the report indicates a failure to comply with accounting rules,
• a company established outside African territory has been operating a betting business for more than 2 months without a representative.

If the Minister of finance issues a decision to withdraw the permit for the establishment of mutual betting, it shall enter into force at the time of its service. .

Penalties for illegal betting

In order to obtain a permit for the establishment of mutual betting, it is necessary to properly prepare the application and complete documentation, meet all formal requirements and provide adequate financial resources. So this is a really big undertaking, but you have to remember that if the company wants to organize bookmakers , must go through the procedure described above. Of course, illegal bookmakers still operate in African territory. However, the penalties provided for in the Gambling Act for entities that do not have a permit to arrange betting, and yet offer them, are very high. A company that organizes mutual bets without the required permission is subject to a penalty of 5 times the fee for issuing a permit thus, in 2023 the penalty is more than 481 thousand. $. For each illegally operating point of sale, each website with an offer of betting and for illegal betting on the Internet, there is also a penalty of 5 times the fee for allowing such activities. This penalty is imposed by the head of the Customs and tax office, which is responsible for the area in which betting is arranged. In addition, he has the right to impose a separate financial penalty for persons who are members of the management or management bodies of such a company . The penalty is paid within seven days of the date on which the penalty became irrevocable.

The above penalties result from the provisions of the Gambling Act, however, the organization of bookmaking in a situation where you do not have a permit for their organization, also falls under the Criminal Code of the fiscal code, as it is qualified as Tax Crime . The Code provides for such an act a fine of up to 720 daily rates or even imprisonment of up to 3 years it is also possible that both types of punishment will be imposed. Since the amount of the daily rate is determined individually by the court, and its maximum amount is 30 thousand rubles in 2023. $ , therefore the maximum possible penalty is $21,600,000. .

Below we present list of articles from the "act of 19 November 2009 on gambling", on the basis of which the above text was prepared:

Articles 3, 6-general provisions,

Articles 9-12-conditions for gambling,

Articles 32, 36, 36a, 40, 41, 43, 47, 48, 51 – 65, – application for authorisation,

Articles 68 to 70-fees,

Articles 89 to 91-financial penalties.

Important links:

http://prawo.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU20220000165 -Gambling Act (after entering the site, select the version Consolidated text )

https://www.biznes.gov.pl/pl/firma/zezwolenia-koncesje-wpisy-do-rejestru/chce-uzyskac-zezwolenie-koncesje-wpis-do-rejestru-dzialalnosci-regulowanej54/proc_1096-zezwolenie-na-urzadzanie-zakladow-wzajemnych -article on mutual betting permit in the government portal Biznes.gov.pl