High Spanish egaming tax leads to 72.5m losses
New Deloitte-authored report concludes poor performance is a result of high taxation
Excessive taxation of the regulated online gaming market in Spain has led to yearly losses of 72.5m, according to a new report compiled by Deloitte.
The Report on the Taxation of Online Gambling found that despite operators generating 234m in gross gaming revenue, the heavy tax burden had caused significant egaming losses and a lack of competiveness since the regulated market first opened in June 2012.
Online operators in the country have been subjected to a gross gaming revenue levy of 25%, which compares unfavourably with the rest of Europe, meaning that only those enjoying large market shares have been able to turn a profit.
Commenting on the report Sacha Michaud, president of the report co-author Jdigital, said he hoped the findings will prevent the Spanish egaming market making similar mistakes to France.
“[In France the] negative tax treatment has caused one of the most important markets in Europe to be significantly reduced, making it untenable for the majority of companies operating in [the region],” he said.
However, Spanish gaming consultant Eduardo Morales-Hermo, told eGaming Review that the country’s online gaming industry has also been hamstrung by problems including the continual lack of slots and player wagering caps.
“The problem with online gaming in Spain as to why it is not reaching the volume expected is far more that just a taxation issue, because there are other factors which are influencing the lack of competivity of the offer,” Morales-Hermo said.
The new report follows the Q1 2013 findings by the Spanish regulator, La Dirección General de Ordenación del Juego (DGOJ), which showed quarter-on-quarter gross gaming revenue and turnover had declined 1% and 0.7% respectively.
The DGOJ attributed the decline to “a stagnation” of the online gaming market, which is represented by more than 50 companies, during a period of economic crisis for the country.