Operators risk Spanish exclusion if back taxes not paid, sources say

Operators preparing to apply for a Spanish online gaming licence that have not paid back taxes from 28 May could be at risk of being excluded from being approved by the local regulator, eGaming Review has learned.

Just days before the licence application process is due to open if, as expected the remaining 38 decrees are published by the end of this week, any operator that not paid 25% of its Spanish gross gaming revenues from the day legislation was passed could face exclusion from the first round of licensing, a source close to the matter has told eGaming Review.

A representative of a large European operator in the process of applying for a general licence told eGR the Spanish regulator earlier this year set two initial due dates for prospective companies to pay back taxes on Spanish revenues from 28 May, the day local authorities passed egaming legislation. The first was the end of July, while the second was the end of October.

According to the operator in question only two or three of the prospective licensees, including his company, paid back taxes by the end of July. The number of operators that paid the following instalment is as yet unknown. The amount however is said to run into tens of millions of euros.

However, despite some operators potentially not having paid back taxes, according to a local legal source they will still be able to 24 hours before the licensing process opens. “They can do this a day before they apply. As long as they have a certificate to prove that their taxes are up-to-date then they can apply.”

A number of operators are known to have been unhappy at the implementation of back taxes, with one telling eGR, “You have basically had to pay tax on the basis you have a licence that doesn’t yet exist.”

Yesterday eGaming Review exclusively revealed that 16 European operators are known to be close to completing paperwork in order to apply for a general licence in Spain. A single general licence requires each operator to provide a €2m cash backed guarantee approved by a local bank.

However, the process is still far from clear with only two decrees ““ on technical and licensing requirements ““ from a total of 38, in final form. The remaining decrees, that contain specific games descriptions and specifications, remain in draft form but are expected to be published tomorrow or Friday.

A number of operators spoken to by eGR have complained about the lack of clarity and costs that have built up due to the local regulator attempting to fast track the process before Sunday’s general election. A new conservative government is likely to be voted in and potentially re-examine the new legislation. A local source described the situation as “a real mess”.

“We’re expecting a number of changes to a variety of documents. We will then have to have these all translated to compare what we have now and whether or not we need to make any changes to our application. It is only then when we will be able to see what needs to be done,” one operator told eGR.

Before any licence is fully approved one of several technical testing companies including BMM Spain Testlabs, NMi and GLI Europe, will have to verify each application. eGaming Review has learned that the approved testing companies and the local regulator are meeting later today in order to clarify the necessary requirements and certifications. Another meeting has been scheduled tomorrow to discuss and clarify the “documentation content for licences”.