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Portugal – Estoril Sol angered with online laws as profit falls by 95 per cent
By Phil - 12 June 2015
Portuguese operator Sociedade de Turismo e Diversões de Macau (STDM), which owns Estoril Sol, reported huge losses in 2014 of by 95 per cent, which it blamed on dwindling revenue and increased taxes.
Estoril, whose board includes Stanley Ho Hung Sun as Chairman, as well as Ambrose So Shu Fai, Pansy Ho Chiu King and banker Patrick Huen Wing Ming, has also been highly critical of the policies of the Portuguese Government towards the gaming sector in its annual report.
The operator, founded by Macau casino boss Stanley Ho, with a minority shareholder Amorim with 33 per cent, reported losses of €1.74m in 2014 from its three Portuguese casinos; Estoril, Lisboa and Póvoa de Varzim. This fell from a loss of €889,120 in 2013. Of the three venues, only Lisboa successfully turned a profit of €8.9m. Póvoa de Varzim, close to Oporto, reported losses of €7.15m and Casino Estoril had losses of €1.96m. Estoril Sol confirmed the losses to the Portuguese Securities Market Commission. However the situation is made clearer by the group’s revenues, which only dropped by 3.1 per cent over the year, falling from €173.6m to €168.2m. GGR in Portugal as a whole fell by two per cent to €267m meaning Estoril Sol still accounted for over 62 per cent of Portugal’s 11 strong casino market.
The board of Estpril Sol said that the taxes on gaming are high considering the economic state of Portuguese casinos.
The board stated: “The high and inadequate taxes on gaming, considering the economic situation of Portuguese casinos, have strongly conditioned the activities of the sector and Grupo Estoril operations.”
The board’s main axe to grind is with the taxes imposed on gaming, which, in the case of the casino in Póvoa de Varzim, are as high as for 65 per cent of gaming revenue, meaning to €24.2m of tax is taken from GGR of €37.2m. The operator’s property’s in Estoril and Lisbon are subjected to taxation rates of 50 per cent of the revenue.
“The less gaming revenues are generated, the more taxes have to be paid,” the board said.
It also has raised its concerns over the government’s handling of online gaming and the new legislation that will open the market up to legalised online gaming on June 28.
“The State allowed online gaming companies to operate illegally in Portugal to the point that Tourism of Portugal, the entity supervising and monitoring the Portuguese casinos, sponsored a national motorcycle racing championship in partnership with one of those illegal operators,” the operator claimed.
Concerning the new legislation on online gaming, Estoril Sol said it was dismayed that the Portuguese Government had opted to axe the exclusive right of casino operators to offer online gaming in Portugal. Estoril Sol argued that the country’s existing casino operators had already paid for this right when their gaming licences were handed out.
Portugal’s government is hoping that opening the country up as a new online gaming market will attract enough national and international operators to raise an extra €25m in tax revenue.
The country’s Secretary of State for Tourism, Adolfo Mesquita Nunes, confirmed that Portugal’s legalised online gaming sector will launch on June 28.
Mr. Nunes said: “We are preparing everything so that on June 28 the technical control structure is operating. We want to sign up as many operators as possible, particularly international operators.”
March saw the country’s Council of Ministers agree a bill to establish the necessary framework for the legislation. Licensees will be awarded by regulator Santa Casa de Misericordia de Lisboa, and will run for three years. The Portuguese online gaming sector will include casino games, sports betting, horse racing, poker and bingo. Taxation will be set between 15 and 30 per cent for casino operators and eight and 16 per cent for sports betting operators.
