Poll: Will back-tax dispute disrupt Spanish market?
Will the market suffer if international operators withdraw over back-tax dispute?
After delays to the market opening and management changes at the country’s egaming regulator, some major international operators could potentially cancel their plans to enter the regulated Spanish market once licences are issued, due to a dispute over back-tax.
Last week general director of the Spanish General Directorate for the Regulation of Gambling (DGOJ) Enrique Alejo confirmed that licences will be issued by 1 June, ahead of the 30 June deadline. This follows the original delay in opening the market “ first planned for the end of December “ after the newly-elected ruling government El Partido Popular decided that there was too little time to effectively review applications.
Alejo’s announcement came after widespread speculation that changes in the DGOJ’s management team would delay the opening, with several senior members being replaced since January this year. Alejo joined in January, before deputy general director Juan Carlos Alfonso Rubio, who had claimed that licences would be awarded by the end of March, resigned that month and was followed out the door by deputy general director of gaming management Miguel Ordozgoiti.
Alfonso Rubio and Ordozgoiti were replaced by Carlos Hernandez Riera and Jaime Lorenzo respectively, with their appointments confirmed in April.
Despite Alejo’s announcement seemingly suggesting that the market will now open on schedule, it may well do so without a number of leading international operators. Betclic Everest, despite deriving around 20% of group revenues from Spain, decided to forgo even applying for a licence last year, and now the likes of bwin and Sportingbet’s Miapuesta brand may not enter if they are forced to pay back-tax on pre-regulation operations.
Sources from Spain confirmed on Friday that bwin are thought to be charged around 60m, while Sportingbet is believed to have an exposure of less than 20m. As a result of such high costs the companies are reportedly considering cancelling plans to enter Spain. The other operators involved in the case are said to be Bet365 and PokerStars, with all four companies reportedly responsible for 80% of egaming revenues from the market.
Stars, which owes around 200m, is said to be planning on launching whether or not it is charged the full amount of back-tax, according to Pokerfuse. The operator increased its presence in Spain ahead of the issuing of licences by acquiring Cara de Poker last year.
If these leading operators decide to cancel their plans to enter Spain, what does this mean for the market? Will local operators such as Codere, which had an injunction against Sportingbet upheld by the Madrid Commercial Court, be able to create a market dominated by native brands, similar to Italy, or will the market suffer as customers’ preferred brands disappear?
Tell us what you think; vote on the right-hand side of the page, or visit the eGaming Review Linkedin group.