Marek Plota: Global gambling operators are getting increasingly interested in Poland
What does it mean to be a multidisciplinary law firm in igaming world? Where can we find the difference between small law firms and corporate ones? Marek Plota, owner of RM Legal and Gaming in Poland answers these and much more questions in exclusive special interview for igamingexpress.
Could you introduce yourself and your business activity?
I am founder and a head of the legal team at RM Legal Law Firm and Gaming In Poland, companies jointly providing multidisciplinary and multijurisdictional support for leading international gambling operators in the Polish, European Union and African markets. We provide regulatory support at pre and post licensing stage, IT, taxation services, as well as unique service of a statutory gambling representative.
How many competitors are there when it comes to gambling law firms in Poland?
Frankly, competition among lawyers on the Polish gambling market is very limited. There are three, maybe four law firms having relevant expertise and most of them are focused on domestic clients only.
What are your biggest successes that you can share?
We believe that we are the “first choice” law firm for international operators aiming to enter the Polish market through the licensing process. Our law firm secured the first sports betting licence ever for the operator based outside of Poland. We managed to achieve this despite a lot of scepticism within the industry. Then, we repeated this success with another major global operator. No other law firm in Poland managed to do that to date.
What does it mean to be a “multidisciplinary” law firm in today’s igaming business world? How important is a skill to combine legal, marketing and product knowledge?
Igaming business is global, and it is multidisciplinary. You cannot deliver best quality service without having experience in jurisdictions other than Poland or focusing only on legal aspects. Lawyer providing services to global operators must know the legislation of origin of his/her clients. In practice, it means navigating among several jurisdictions at the same time. It is also important that licensing process is not just regulatory matter, it is an international business project involving lawyers, accountants, IT developers, payment providers, marketing experts etc. For this reason, an effective lawyer needs to provide multijurisdictional and multidisciplinary advice which requires a broad knowledge of all aspects of the industry, including law, taxation, technology, marketing and, as you mentioned – the product itself.
What is the difference between smaller, smart, elastic law firms and corporate ones?
Usually, big corporate firms have advantage over the small ones due to global network and unlimited financial and personal resources. It does not work that well when it comes to narrow specializations like gambling. Although, international firms still matter if operator wants to enter the market via M&A, but the licensing project is a different story. It is a process which requires deep practical knowledge combined with responsiveness and flexibility. Due to licensing deadlines and complexity of the process, lawyer must be able to adapt to the situation within one day. All this is difficult for huge organizations with the entire hierarchy and decision-making process. In turn, it is much more convenient for a boutique law firm, having a team working in a small environment where communication is immediate and senior lawyers are at clients disposal 24/7.
What is your opinion on the Polish igaming market? Is there any space for new companies on it?
Poland is an emerging market and we have been observing record-breaking growths in each subsequent year since the industry was regulated in April 2017. Before the new law was introduced, it was estimated that over 90% of the online mutual bets market in Poland was controlled by operators without licences and thus they did not pay taxes. Currently, the market share of legal operators is 60-70%, and the grey market keeps shrinking. The growth of the legal market is therefore very promising, and the Polish government, due to its wide social policy, is interested in increasing revenues from the gambling tax.
Even under the current tax regime, Poland, using alternative methods, maintains the share of the grey market in the overall gambling market well below the EU average. The regulations that have been introduced are yielding results in the long term. To date, the state has closed down over 28,800 illegal gambling sites. In addition, as society becomes more affluent, there is a growing interest in gambling itself in general. The vast majority of this demand will be realized in the legal market, and thus there is still a lot of potential and space for gambling operators.
What does the market look like in terms of obtaining the necessary permits to provide bookmaking services? Do you have your own unique know-how that is difficult to replicate?
RM Legal together with Gaming In Poland offers a unique service of a gambling representative, which allows offshore operators to apply for a licence, obtain it and operate without having corporate establishment in Poland. Despite the fact that it is based on the Polish Gambling Act, no one else in Poland offers this legal solution. Since it is a public information, I can share that we are a formal representative for Betclic and Betway, the only offshore entities operating legally on the Polish gambling market. From what we see, this solution gives bookmakers a huge advantage from the organizational point of view as they may easily rely on existing technical and human resources, instead of building a local team. It is important, especially at the early stage of operations, on the new market.
With regards to licensing regime, applications for granting a licence are examined by the Minister of Finance. Proceedings may last up to six months, however, this time limit is instructive and may be extended. The application shall be accompanied by documents concerning the company itself (e.g., articles of association and financial statements) and the planned activity (e.g., website regulations, technical documentation of the website, and consent of the sports competition organizers). The licence shall be granted for a period of six years, which may be subject to one-off extension for the next six years. The fee for granting the licence is approximately EUR 115,000 for each website and it covers six years period. The applicant shall also be required to provide a collateral of EUR 105,000 in cash or in the form of a bank guarantee.
How do you assess the Polish Gambling Act?
The current gambling regulation of 2017 is still new, and certainly, it requires some improvements. I cannot imagine any expert saying that the Polish licensing regime is perfect however, from the legal perspective, relevant expertise makes both the application process and the operations in Poland seamless. The Minister of Finance, acting as the gambling regulator is doing his best to apply regulations provided under the Gambling Act, which at times, are vague or inaccurate. We feel that there is a lack of clear guidelines on what is permitted and what is not, especially in terms of provisions concerning advertising and promoting gambling activity but rules are defined by practice. Thus, improvements would be welcomed but despite some legislative weaknesses, I find the regulator and the law itself as tough but fair.
What is the level of knowledge of foreign clients interested in entering the Polish market?
We observe limited trust to Polish regulations and market`s business potential. There is also a popular belief, which we proved wrong, that it is impossible for offshore companies to secure the Polish licence. This is mostly due to inaccurate information spread all over the industry by the major market stakeholders, who are interested in maintaining the status quo in Poland. Nonetheless, we receive much more inquiries from foreign clients recently. Global gambling operators are getting increasingly interested in Poland as they realize that one cannot think seriously of the CEE region and disregard Poland with its population of 38 million.
Photo source: CEEGC Budapest