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Incredible speed: the amendments to the Gaming Law prepared in a few days were put on the table for the members of the Seimas yesterday Thursday. On the spot, they released amendments to the conveyor belt legislation for the committees to review.
What was the compelling rhetoric of former Kaunas mayor Andrius Kupčinskas, who submitted amendments to the law to the Seimas, if even obvious mathematical mistakes were not made for the elected ones?
Situation and suggestion
There are currently two different principles of additional taxation for lotteries and gambling.
One of them is that lottery organizers donate 8% to support or charity. funds received for lottery tickets sold.
For example, Euloto is one of the largest sponsors of Paralympic sports in the country and Olifėja supports the Lithuanian National Olympic Committee.
In total, there are seven lottery organizers, of which 8 percent. working capital for support.
Another principle is when lotteries are subject to 5%. Tax rate. However, Parliament has sought to double both taxes.
By submitting these amendments to the Seimas, both the conservative A. Kupčinskas and the like-minded liberal Virgilijus Alekna became convinced that this would unify the competitive environment for both gambling and lotteries.
Also, when lottery organizers are required to allocate 16 percent. working capital support, the sports and culture sectors are supposed to get extra money. And for the state budget, after raising the fee to 10%, an additional 2 million will be raised from lotteries each year. euros. Funny amount …
On the other hand, is it normal to want to harmonize taxes and equate lotteries with gambling?
Not aware of margins
Game fees are calculated differently. In this business, only net income is taxed, and organizers are not required to allocate funds for charity or support.
It can be estimated: in 2020, gambling operators received more than 1.3 billion. sales revenue in euros. Of this, the net proceeds (cash remaining after settling accounts with players) amounted to about 103 million. euros.
Last year, lottery organizers’ sales revenue amounted to $ 106 million. income in euros – tickets were sold for both funds.
His net income was about 50 million. euros.
Gambling companies paid around $ 12 million last year. tax in euros to the state budget only. Lottery organizers: 13.8 million. of which went to the budget and part to support.
It would seem that doubling the support ratio will give athletes twice the money and taxes, but the math is different.
A.Kupčinskas proved to the Seimas members that the profit margin of lottery organizers reaches 32-35%, but probably did not look at any of their financial statements before.
32 percent. It is the part of the money that remains after organizing lotteries (ticket distribution, circulation, staff salaries) after paying 13%. taxes and give 55% to winners. income from ticket sales.
The actual profit margin is around 7-8%.
The former mayor of Kaunas has a strange account. Theoretically, doubling the funding of sport would not increase it by more than 16 million. (This is 16% of last year’s income from lottery organizers). However, according to A. Kupčinskas, 2 million of them would go to sport every year. more than now.
Consequently, lottery ticket sales are projected to decline dramatically. This is likely to be the purpose of the law.
A member of the calculated Seimas?
Introducing the amendments to the law, Kaunas A. Kupčinskas glorified the appointments of the Green Gaming Business Association of the National Gaming Business Association. It is an association that unites the main gambling companies Top Sport and Tete-a-tete Casino, based in Kaunas.
By the way, a representative of this association, who sought to legalize a certain category of slot machines in cafes, gas stations or shops, and wanted the lottery business to be nationalized, was sanctioned a couple of years ago for illegal lobbying activities.
So the campaign against the lottery organizers has been going on for years, and now a new wave has just emerged.
“And what is the income from the game?” – this question disturbed the amendments to the law in the Seimas.
According to A. Kupčinskas, the net income from this business last year was perhaps 2–2.5 million. euros.
But the parliamentarian made a strong appeal throughout the country, because, according to the gambling market regulator, they amounted to 103 million. euros.
Not everyone would survive for sure
Income tax is not easy to find out either. Last year, the data was published enigmatically in a couple of regional newspapers.
Top Sport reportedly received 17 million. Tete-a-tete Casino’s pre-tax profit before tax was 2.43 million euros. euros.
Or maybe you would return the yen and reconsider taxes differently? For example, if gambling operators were subject to the same 8% obligation as lotteries. of the total revenue that will go to support, additional sports would receive 105 million. euros.
And another number. According to 2020 data, the new tax base would amount to 44.2%. Existing bases.
Calculated according to the new methodology, in 2020. 0.6 million would be collected in the lottery fee. euros less.
In reality, the state will receive less tax and increase support to 16 percent. just not all organizers would survive.
The followers are not going to be silent
Paradoxically, the organizers of the amendments were opposed by none other than the organizations that received the support of the lottery organizers: the Lithuanian National Olympic Committee, the Lithuanian Paralympic Committee, the Lithuanian Deaf Sports Committee, and the Lithuanian Committee for Deaf Sports. of Lithuania Special Olympics.
According to them, doubling the support rate would increase funding for sports or other activities supported only on paper, as the income of lottery organizers would decline in real terms and some of the supported organizations would be left without any funding.
“With the adoption of the proposed regulation, there is a real threat that the lottery will not be able to carry out economic activities due to the unbearable tax burden, and the sports income from these activities will drastically decrease,” says the speech addressed to Seimas. .
