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Spanish Online Gambling Tax
Posted 1/13/11 : Continued furore over online sports betting tax proposal
The Remote Gaming Association, a trade body that numbers major UK online gambling groups among its members, has again warned that tax proposals in the Spanish government's initiative to legalise and regulate online sports betting could have serious consequences for operators, reducing their ability to effectively compete.
The RGA favours a gross profits tax model and has enlisted the professional services of KPMG to confirm its case. The independent professional services group comments in its report that gross profits tax would serve to optimise the size of the Spanish market, thus boosting tax revenues.
After some tentative moves at the autonomous provincial level in years past, the Spanish government now appears committed to a more collective national licensing and control regime for internet gambling.
Late last year draft proposals were debated and the government hopes to obtain European Commission approval and table the draft before parliament this year. Minister for the economy Elena Salgado announced late last year that the drafting stage of a new regulatory regime had been largely completed, with an estimated tax benefit to the state of Euro 200 million per annum.
Reports late last year suggested that the government proposed two different taxation levels; one for online sports betting, and another for other forms of internet gambling, including online poker and casino games.
Taxation on general internet gambling has been based on gross gaming revenue, but in the case of sports betting, where much of the debate has taken place, the rate suggested has been a flat 10 percent of turnover.
This has raised the hackles of trade associations and operators, who have warned of the dangers it poses to tens of millions in sponsorship and advertising Euros, and the limits it may place on the ability of Spanish licensed operators to effectively compete.
Trade associations like EGBA, the RGA and Spain's AEDAPI have all called for further consultation on the sports betting tax issue.
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