Back-tax dispute could see operators shun Spain
Spanish tax ministry looking to tax operators on pre-regulation operations " gambling authority has no control over case.
Reports from Spain suggest that major egaming operators “ who draw around 80% of the market’s internet gaming revenues “ could cancel plans to enter the country’s egaming market if a move to have them pay back tax on pre-regulation operations is upheld by the country’s tax fraud office.
The Spanish newspaper Cinco Dias reports that despite general director of the Spanish General Directorate for the Regulation of Gambling (DGOJ) Enrique Alejo announcing licences will be awarded by 1 June “ ahead of the revised 30 June deadline “ earlier this week, unresolved court cases against a number of international operators over operations before regulation was introduced could see these companies hit with large back-tax bills.
While the exact figures each company is to be charged is yet to be determined, PokerStars are rumoured to face costs of around 200m and bwin.party 60m. It is at this moment unclear how much Sportingbet’s Spanish-facing brand Miapuesta, which was the subject of a legal challenge from Codere, is expected to pay, while Bet365 is also understood to be under investigation. In total the operators involved are thought to draw around 80% of egaming revenues generated from the market.
Bwin.party refused to comment on the matter when contacted by eGaming Review.
According to a source close to the matter, the DGOJ will have no control over the outcome of the tax investigation, as it is being organised by the Tax Fraud Office “ a separate body from the gambling regulator, despite it being part of the same ministry.
“There are two potential outcomes of the tax investigation to the dot.com companies offering online gaming in Spain before the regulation,” the source explained.
He went on to say that either “the licensing process will continue alongside the tax investigation, so the applicants may be awarded the license while the tax investigation continues regardless of its outcome. Alternatively, the licensing process will be tied to the tax investigation and as a result will influence whether or not the company can be granted a licence until they have paid the back taxes due after the investigation.”
“Being both factors perfectly in the mind of the regulator, we shall have to see what is the outcome and we shall know until 1 June,” eGR’s source concluded.
The case is similar to an ongoing dispute in Italy, where the country’s ministry of finance is seeking a total of 2.5bn from gaming machine operators over unpaid tax. In this case the egaming regulator AAMS, which did not have any control over the ministry’s actions, supported the claims.