Sportingbet agrees to pay Spanish tax bill
UK company becomes second operator to repay back-tax, believing it "maximises the likelihood" of securing Spanish licence.
Following bwin.party’s announcement that it will repay up to 33m in back-tax to the Spanish Tax Authority, Sportingbet has confirmed that it has also reached a deal to settle its bill for a total sum of 17.2m.
The operator has confirmed that it will make a payment of 14m “plus surcharges and interest of up to 3.2m” after completing a self-assessment tax return covering the period from January 2009 to May 2011, after which it began paying tax on its operations in the market.
The operator announced in a statement today that the payment “maximises the likelihood of securing a Spanish egaming licence,” which it expects to be awarded by the revised 1 June deadline. Should the licence be secured, Sportingbet has announced that it will make an application to Commercial Court no.10 in Madrid to have an injunction blocking the company from operating in Spain lifted.
The injunction was awarded following a legal challenge by Spanish operator Codere on the basis of unfair competition due to the likes of Sportingbet offering its services in Spain without having to pay tax on its activities, resulting in Sportingbet’s Spanish-facing Miapuesta dot.es and dot.com sites being shut down.
The company was forced to pay a 2m bond to have the sites reactivated in February pending an appeal against the unblocking by Codere, which was again upheld by the Commercial Court. This in turn prompted Sportingbet to announce its decision to appeal against the injunction.
In a statement released at the time, the operator said: “Sportingbet is filing an appeal against Codere’s claim having received advice that there is no legal basis for the action.
“This is supported by the decisions of other Spanish courts to reject Codere’s applications for injunctions against other companies in the Spanish online betting and gaming sector,” the statement explained.
In order to raise the capital to make the payment, the operator has sold £15m (18.5m) of its 7% convertible bonds, to be issued on 25 May, to institutional investors, redeemable by 2016. The bonds are on the same terms as the £65m convertible bonds issued in June last year, and can be converted into ordinary shares at a conversion price of £0.4775.
The move to reclaim back-tax from operators looking to enter the Spanish market was announced earlier this month, with initial reports suggesting that companies could delay or even cancel their decision to enter the market. However, it is now expected that the majority of leading European operators will make a payment based on self-assessment.
More to follow”¦