The Polish government is considering a tax hike on gambling winnings for the first time in over 20 years. Industry experts are worried that the new tax slab will create an additional burden on a sector already under pressure from illegal gambling and a monopoly on state-run operations.
Polish Gambling Winnings Tax Revisions: Key Points at a Glance
- The draft bill proposes an amendment to the Excise Duty Act and the Personal Income Tax Act. If approved by Parliament, the series of changes could take effect from early 2026.
- The amendment proposes raising the flat-rate income tax on gambling winnings, including competitions, promotional sales, and games or mutual bets within the jurisdiction of any Member State of the European Union.
- Poland’s Ministry of Finance defended the amendment, citing that provisions of the Personal Income Tax Act regarding the tax rate on winnings have remained the same for over two decades.
Tax on Gambling Winnings Aimed at Dissuading Consumers
According to Project Number UD289, the draft law amends the Excise Duty Act of 6 December 2008 and the Personal Income Tax Act of 26 July 1996. The purpose of the amendments is to adjust the tax rates on winnings, which have remained the same since 2001, despite a significant increase in the value of winnings over the years.
While the draft law primarily amends excise rates on alcoholic beverages, the government also plans to increase the tax on gambling winnings. The document explains that profits from gambling in a member State of the European Union or within the European Economic Area will now be taxed at 15%, up from the existing 10%.
The draft act proposes a “change in Article 30(1)(2) of this Act, consisting in increasing the flat-rate income tax rate on winnings in competitions, games and pari-mutuel betting, or prizes related to bonus sales, obtained in a Member State of the European Union or another country belonging to the European Economic Area, from 10% to 15% of the prize.”
Jaroslaw Neneman, the Undersecretary of State, Ministry of Finance, European Union, is in charge of project development. The proposed date of adoption is set for the fourth quarter of 2025, with the changes expected to be enforced by early to mid-2026. If approved in Parliament, this will be the biggest update to Poland’s tax regime since 2001.
The Polish Ministry of Finance, which is overseeing the amendment, justified its tax hike by highlighting that the Personal Income Tax regime has remained stagnant for over 20 years. This is despite a significant increase in the value of gambling winnings over the last two decades. Once enforced, winners must pay a 15% tax on their gambling profits.
Polish Gambling Market in Duress
Under Poland’s current tax regime, gambling operators are responsible for paying taxes. Under the proposed amendment, operators will increase the deduction from players’ net profits from 10% to 15%, while the responsibility for paying taxes remains with them. Operators will be responsible for deducting taxes before payout, and the transaction will be invisible to players.
The tax hike comes at a challenging time for the Polish gambling market. Poland is among a handful of nations in the European Union to maintain a state monopoly on gambling operations. State-run Totalizator Sportowy currently oversees iGaming operations and slots games.
While sports betting is open to private operators, casino games continue to be exclusively under state control. Experts are concerned that raising taxes on gambling winnings will encourage players to sign up for offshore gaming platforms, making it more challenging for players to avoid fraudulent online casinos, and increasing illegal gambling.
This is already a major problem for the Polish authorities, as the nation’s illegal gambling market generated an estimated PLN 230 billion (approximately €52.61 billion) in the past few years, bleeding the state coffers of roughly PLN 5.8 billion (approximately €1.29 billion) in lost tax revenue.