Members of the European Parliament (MEPs) have been told to disregard a proposal made by Victor Negrescu, Vice‑President of the Social Democratic Party of Romania (PSD) and Vice‑President of the European Parliament (EP), which called for a coordinated tax charge on online gambling.
This week, the European Parliament was informed of Negrescu’s proposal to create an ‘EU-level iGaming tax’, although the proposal itself is still said to be in development.
Negrescu framed his proposal to MEPs as a new measure to raise funds for EU-wide initiatives on education and re-skilling, and to support member states in the treatment of addiction and mental health.
The Romania SDP Minister currently sits on the council, which considers and evaluates proposals for the design and development of the EU’s budget. The VP believes that a unionised tax charge on online gambling could provide an additional €4bn to the budget each year, and up to €28bn across a fiscal cycle.
In his address, the Minister argued that gambling taxes across EU states remain unaligned for a sector that continues to generate billions in income.
Negrescu noted that he is aware of the autonomy of Member States to set their individual gambling laws and specific tax policies, although he argued that a common tax on online gambling was pitched as a necessary measure to end the sector’s fragmentation.
However, the proposal has drawn immediate opposition from the European Gaming and Betting Association (EGBA). Responding to discussions within Parliament’s Budget Committee, EGBA Secretary General Maarten Haijer issued a firm rebuttal of the initiative to iGaming Expert.
He said: “EGBA notes the proposed amendment by an MEP in the European Parliament’s Budget Committee to introduce an EU-wide tax on online gambling. However, such a proposal is fundamentally unworkable – gambling is not harmonised at EU level, and there is no legal basis or mechanism to collect such a levy.
“Even so, adding yet another tax to online gambling operators licensed in the EU – who already operate in a heavily taxed and highly regulated environment – would only benefit illegal operators who pay no tax.”
The Brussels-based trade body underscored the industry’s concern that an EU-level levy would distort the already-complex national tax frameworks and lead to negative repercussions.
Licensed operators across the bloc face divergent fiscal regimes, as the majority of EU markets apply domestic tax rates on gambling above 40% of gross gaming revenue.
The EGBA argued that proposing a supranational charge, which is in addition to the existing regulatory and economic challenges faced by the betting and gaming industry, will have a significantly negative impact on player channelisation – at a time when various member states are already grappling with the expanding encroachment of the black market.
“Because they pay no tax, illegal operators can offer players more attractive products and prices but without any of the essential consumer safeguards that licensed operators provide,” Haijer noted
“Imposing an EU tax on top of existing national taxes would only make this situation worse: expanding the black market, harming European consumer protection and ultimately leading to lower tax revenues for Member States.”
The EGBA, alongside wider stakeholders, has indicated that it is awaiting further clarity from Negrescu on how his proposal would function in practice at a European level.
As of yet, no further details have been provided on how the proposed tax would be calculated, administered or enforced across 27 separate regulatory systems.
Any new EU-wide budget charge would require extensive negotiation between Parliament, the Council and the Commission, alongside careful assessment of treaty competences relating to taxation and subsidiarity.
At present, Negrescu’s proposal is viewed as part of a broader debate on how to strengthen the EU’s budget. Yet the reaction from EGBA signals that any attempt to impose a unionised online gambling tax will face instant backlash, viewed as a threat to an established and tax-effective EU-wide sector.
