Bwin.Party to Pay Spanish Online Gambling Tax

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Soon after the Spanish government confirmed that online gambling licenses will be issued in June 2012 as per the revised schedule, the authorities backtracked on the taxation policy and demanded that applicants would have to pay back taxes for the last four years if they wanted the licenses. The original understanding was that online gambling operators catering to Spanish players would be allowed to continue but would have to pay taxes from July 2011, the date the legislation came into effect, prior to being issued licenses. It appears that this change is a result of the thinking of the new Spanish government.

It was reported that the Spanish government had asked the Bureau of Fraud Investigation to assess the tax liabilities of the applicant companies retroactively from 2008. Initial unconfirmed reports put the amounts for some of the largest operators as follows: Bwin.Party at €60 million, Sportingbet at €50 million and PokerStars at a whopping €200 million. At that time it was reported that PokerStars is considering paying the back taxes demanded, but other online gambling operator could withdraw their applications for licenses in the light of this unexpected development.

Now an official statement from Bwin.Party has thrown light on the issue and made things clearer. It is the first formal statement from any of the online gambling operators that have applied for a Spanish license. The Spanish tax authority has required that online operators that have ever accepted customers from Spain have an obligation to pay Spanish taxes under two laws, one dating from 1966 and the other from 1977. Previously these laws were applied only to operators based in Spain carrying out specified offline gambling activities. Now they have been made applicable to offshore online gambling as well. The Bwin.Party spokesperson stated that this was communicated to them by the Spanish authorities and also to the other applicants of online gambling licenses.

Following this Bwin.Party has completed a tax self-assessment in accordance with the Spanish Tax Authority's requirements and the amount works out to €25.6 million in taxes plus surcharges and interest amounting to €8 million. The total amount for Bwin.Party works out to €33.6 million, and not the earlier rumored figure of €60 million. Bwin.Party believes that a number of other applicants have carried out similar assessments. Bwin.Party has decided to make this payment of €33.6 million in order to secure the group's position in the Spanish online gambling market. The spokesperson added, "Having taken these steps, we believe we have now fulfilled all requirements and look forward to receiving our license and entering the Spanish market." The online gambling industry is keen to learn the response of the other operators, particularly PokerStars.

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