Taxation of operators

1) Taxation base: what is GGR and why it matters

GGR (Gross Gaming Revenue) - operator's gross gambling income equal to the amount of bets minus winnings paid (excluding bonuses, discounts and operating expenses).

For sports bets, the tax is calculated as a percentage of the GGR in the corridor of 8-16% (the rate depends on the volume, product and current rules).

For casino products (slots, tables, live casino, online poker in terms of casino logic), a fixed rate of 25% GGR is applied.

💡 Important: GGR is not turnover or net profit. GGR taxes are paid "up to" operating costs, marketing and salaries, so the right P&L model is critical.

2) How to count: short examples

A) Sports betting (range 8-16%)

Example: a month accepted bets for €12,000,000, paid winnings for €10,800,000.

GGR = 12 000 000 − 10 800 000 = €1 200 000.

Tax at 8%: €96,000.

Tax at 16%: €192,000.

The difference between the lower and upper border is €96,000, which directly affects the monthly margin.

B) Casinos (fixed 25%)

Example: gross revenue (GGR) for the month - €4,000,000.

Tax: 25% × 4,000,000 = €1,000,000.

Operating expenses remain €3,000,000 minus marketing, content providers, payments, staff, etc.

3) How taxes "sit" in P&L

1. Top of Loop: Deposits and Rates → Payouts → GGR.

2. GGR taxes (sports: 8-16%; casino: 25%).

3. Cost of Sales: game providers (jealous cher), payment systems commissions, stream rights/data.

4. OPEX: personnel, platform, licenses, hosting, security (KYC/AML), support.

5. Marketing: CRM, bonuses, affiliate payments, content.

6. EBITDA and below - after taking into account depreciation, financial expenses and other things.

4) Frequent errors in calculations and planning

Confusion "turnover vs GGR." You cannot multiply the tax rate by the sum of all rates - only by GGR.

Incorrect product classification. Different products → different rates; erroneous "repackaging" risks fines.

Ignoring seasonality. Sports peaks (derby, European cups) and casino holidays distort GGR and tax payable.

Opaque bonuses. Unaccounted bonus mechanics inflate costs and complicate GGR reconciliations.

5) Reporting and control

Periodicity. Operators keep daily logs of events and aggregates, generate monthly reports and make payments on time.

Separate accounting. Bets and casinos are counted separately for the correct application of bets of 8-16% and 25%.

Reconciliations and logs. Logs for bets/game rounds, a register of payments, the correctness of ticket and jackpot calculations are required.

Audit trail. Readiness to provide a "replayer" of calculations and a complete trace of transactions upon request of supervision.

6) What affects the effective tax burden

Product mix structure. The higher the share of casinos, the higher the cumulative load (25% versus 8-16% for sports).

Quality of live risk management. Knocked down coefficients and bugs in calculations increase payments and "compress" GGR.

The cost of the payment circuit. PSP fees and returns do not reduce GGR tax, but reduce the "post-tax" margin.

Shares to content providers. Provider jealous shers are paid after the GGR tax - they must be set carefully in the models.

Payout rate (SLA). Indirectly affects retention: higher retention → more stable GGR, more predictable taxes.

7) Margin management practices (within compliance)

1. Separate analytics by channel and game. See each vertical's contribution to GGR and tax.

2. No "aggressive" bonuses. Simple rules, clear qualifications, minimum retro corrections.

3. Live stability. Reserve feeds, anti-drift coefficients, rapid freezing of markets with "anomalies."

4. Optimization of payment costs. Balance card/local methods, reduce returns and chargebacks.

5. Agreed contracts with providers. Flexible rhubarb-shers, taking into account seasonality and live share.

6. Transparent RG-UX. Limits and reality checks reduce controversial cases and "expensive" payment conflicts.

8) CFO/CFO Short Checklist

Check that the products are marked correctly (where 8-16%, where 25%).

Make sure that all uploads (bets, wins, promotions, cancellations) are reduced to one reference GGR.

Update payment calendar and reporting milestones.

Set up daily reconciliations with payment systems and game providers.

Implement alerts for GGR anomalies and margin skews in live.

Fix the policy of reserves for disputed tickets and recalculations.

9) What to see in management dashboards

GGR by verticals (sports, casinos) and by league/game.

Effective tax rate for each block and in general.

Payout SLA and NPS - correlation with GGR stability.

Live share, rPS, Cash Out usage - product quality indicators.

RG metrics: the proportion of users with limits, the frequency of timeouts, the number of "red" sessions prevented.

10) Looking Ahead: 2025-2030

Stability of the basic design is expected (GGR-approach with differentiation of rates by verticals), with a possible "fine-tuning" of individual norms.

Competition will go into the speed of payments, honest UX and technical reliability of live, and not into aggressive promos.

Operators with transparent accounting, clean logs and mature RG design will win - this reduces regulatory risks and protects margins.

The Portuguese model is simple according to the formula, but demanding on discipline: sports betting - 8-16% of GGR, casinos - 25% of GGR. To prevent these percentages from "eating up" the business, you need accurate GGR accounting, error-free product classification, predictable live and transparent payment processes and RG. Then the tax will become not a threat to the margin, but a parameter of the operator's sustainable economy taken into account.