Planned changes to the regulation regarding the tender for entities applying for a license to operate a casino or a permit to operate a cash bingo hall

The Regulation of the Minister of Finance of August 27, 2010, regarding the detailed conditions for conducting a tender for entities applying for a license to operate a casino or a permit to operate a cash bingo hall is set to be amended, or more precisely, it is to be replaced by a new regulation issued by the Minister of Finance, Funds, and Regional Policy (hereinafter: MFFiPR).

What is set to change?

First and foremost, the criterion of the declared tax base for gambling tax, which an entity applying for a license or permit plans to achieve in the casino or cash bingo hall covered by the submitted offer, will be modified compared to the current regulation. The new legal act will introduce a definition of the average gambling tax amount. Thus, the average gambling tax indicated in declarations by the entity applying for a license or permit, from the operations of all casinos or halls, divided by the number of those casinos or halls during the calendar year preceding the year in which the tender is announced, will be taken into account. The highest number of points in the tender will be awarded to entities declaring the highest average gambling tax amount.

In the justification for the draft regulation, it was noted that the Supreme Audit Office observed significant discrepancies in the revenues declared by entities participating in the tender for the first and subsequent three years of operation, indicating possible overstatements. In the future, the actually achieved tax base, rather than the projected one, will be considered.

Furthermore, the preferred casino location no longer needs to be within or immediately adjacent to an entertainment center. Additional points will no longer be granted for locating a casino in a historic or new building. The highest number of points will be awarded for a casino located in a five-star hotel. Maximum points will also be given for placing a casino or cash bingo hall in a city with over 500,000 inhabitants, which is a new criterion as the current regulation does not include it.

The activity of an entity participating in the tender will be assessed over a six-year period, rather than three years as previously.

Among the evaluation criteria, prior experience in the gambling market, understood as operating gambling activities for at least one year, has been removed. However, an experienced bookmaker will have a better chance of achieving a higher score in the tender.

The new version of the regulation will include a provision stating that the preferred location for a casino or cash bingo hall is in a building housing a hotel of a specified category. The regulation does not further define what constitutes a “specified category.” While such conclusions can be inferred from the proposed annex to the MFFiPR regulation, which indicates that points are awarded for five-, four-, and three-star hotels or for a building where no other casino or bingo hall is currently located or where an existing license or permit is set to expire, it seems this should be explicitly clarified in the regulation text to avoid ambiguity.

The draft is currently in public consultation, so the final form of the regulation may change. After approximately ten years since the creation of the regulation, certain modifications justified by experience in conducting tenders are necessary.

[1] Draft regulation with justification available at: https://legislacja.rcl.gov.pl (accessed: 08.02.2021).