In an effort to boost its country’s economy, Greece has recently announced that it will begin to distribute online gambling licenses, attempting to raise €500m in licensing fees for a nation that is currently strapped for cash.
The plan for the rapid spread of licensed online gambling will entail a €3m licensing fee for each domain name registered, a process that Greek officials say should not take any longer than two months. Licenses will be valid for five years, and are being implemented by the governing Syriza party, which took control after snap elections were held in January.
The new online gambling licensing is just one of seven proposals made by the Syriza party since taking office, all intended to boost revenue in a state that has been recovering from a catastrophic recession in 2009. Most intriguingly, the plan to license over 150 domains represents a direct shift in policy for the Syriza party. Leading up to the election in January, the leader of the Syriza party Alex Tsipras was quoted as saying he was firmly against large gambling interests in Greece, but the need for new revenue-raising avenues has apparently changed Tsipras’ mind rather quickly.
The licensing of legal online gambling institutions is, in effect, a bailout for the Greek economy, which is scrambling to find sufficient cash flow and economic levels to maintain support from across Europe, and keeps the country in the European Union. Many in Greece fear that this move toward online licensing was made out of desperation, with the country running out of options to raise a sufficient amount of cash.
It was Greek Finance Minister Yanis Varoufakis who promised the country’s ability to raise €500m through the new licensing operation, in a recent letter to the Eurogroup. However, economists from the European Commission are skeptical of that large figure, and have estimated that the new licensing operation’s market is more realistically placed at €160-€240, well short of Varoufakis’ proposed €500. Falling short of the goal by over €250 could prove disastrous for the Greek economy in its recovery efforts.
Varoufakis has yet to announce the details of his proposal, and the steps the Greek government will take to reach its proposed goal, so the estimate arrived at by economists at the European Commission could prove to be well short of the actual figure raised by licensing online gambling domains. However, it will take an undoubtedly inspired and creative effort on the part of Greek’s finance commission to hit its lofty goal.
The tax rates will not change for any online gambling operator that chooses to participate in the new Greek regulated system, but licensed companies will be required to serve Greek players with approved payouts that will be regulated by the Greek Central Bank.
Those involved with the transition period hope that the new wave of licensed online gambling operations will help liberalize what has been long viewed as a conservative online gambling market. Moving forward, all eyes are on Varoufakis and his promise to generate €500m in revenue with this maneuver, with many anticipating that his goal will prove to be wildly ambitious.