Critics allege that the Turkish government’s recent decision to halve taxes on betting and lotteries is aimed at supporting a pro-government media mogul who ventured into the betting business.
Turkey has announced a 50 percent reduction in taxes on betting and lotteries, effective January 1, 2024.
The decision, published in the Official Gazette, affects sports betting, horse racing and some lotteries.
The move benefits entities like Demirören Holding, which owns Turkey’s largest media group and supports President Recep Tayyip Erdoğan, as the group also oversees İddaa, Turkey’s only fixed-odds sports betting game.
Şans Girişim, a subsidiary of Demirören Holding, has been operating İddaa, since 2019.
Morever, in 2021, Turkish media reported a 30 percent decrease in ticket sales for Milli Piyango (National Lottery) due to a loss of public trust after its privatization.
The Sisal-Şans joint venture, which includes the pro-government Demirören Group, won the operating rights of the national lottery in 2019, leading to skepticism about the lottery’s transparency. The lack of trust in the privatized lottery is cited as a key reason for the decline in sales.
The Demirören group, already under scrutiny for unpaid debts to the state-run Ziraat Bank related to the acquisition of the Doğan Media Group in 2018, is seen as benefiting from government favoritism through the tax reduction.
In 2018 Demirören Holding, owned by Yıldırım Demirören, paid $916 million for the Hürriyet newspaper, broadcaster CNN Türk and other assets from Doğan Holding. The deal shifted the mainstream media overwhelmingly behind Erdoğan’s Justice and Development Party (AKP).
The AKP government, which has taken over or closed down hundreds of media outlets in the country, including Turkey’s best-selling newspaper, Zaman, and has jailed around 200 journalists due to their critical views since a failed coup in 2016, is criticized for silencing the free press in the country.
According to a report by Reuters in 2021, Demirören engaged in talks with the state-owned Ziraat Bank to restructure an $800 million debt, which it took on to finance purchases in the media sector. His companies are also in talks with eight or nine banks to structure debt totaling $1.2 billion that is assumed will be used to acquire the national lottery and energy ventures, the report said.
On Friday Demirören Holding, facing allegations of non-compliance with repayment plans for the $800 million loan from Ziraat Bank for purchasing the Doğan Media Group, responded to these claims.
The company asserted that it has consistently met its commercial obligations since its inception.
A report by the Court of Accounts presented to the Turkish Parliament details Demirören’s outstanding debt to Ziraat Bank, amounting to nearly $921 million as of December 31, 2022, including principal and interest.
The report also highlights the lack of payments made by Demirören, except for asset-debt swaps, and notes limited collections made in 2022.
Critics see the latest tax reduction as favoring pro-government business interests, raising concerns about media independence and political influence in business.
Erdoğan dün gece şans oyunlarında vergiyi niye yüzde 50 indirdi açıklayayım.
Rüşvet aldıkları için yasadışı kumar/bahisi engellemek Saray ekibinin işine gelmiyor. Yıldırım Demirören ise Milli Piyango ve tüm şans oyunlarının zarar ettiğini, kimsenin legal oyun oynamadığını… pic.twitter.com/gNvHrYFiN9— Cevheri Güven (@cevheritv) December 28, 2023
According to investigative journalist Cevheri Güven, the government’s decision to reduce taxes on lotteries and betting is due to the sharp rise in illegal betting in recent years.
Güven claims that the owners of illegal betting shops bribe high-ranking government officials and obtain their approval, causing this business to boom and eat into the profits of legal betting. In order for legal betting to remain competitive, the government had to intervene, Güven said.