This story is sponsored by Party Poker
PartyPoker brand owner bwin.party is paying up to €33m to Spanish authorities to settle a four-year tax bill ahead of receiving its licence there next month.
As reported on Casino Choice, a host of European online operators, including PokerStars and sports betting leader Sportingbet, were unexpectedly hit with large retrospective tax bills dating back to the start of 2009 just two weeks before they were due to receive online gaming licences in Spain.
However, bwin.party announced this morning that having completed a tax self-assessment in accordance with the request from the Spanish tax office, it was “making a payment of €25.6m plus surcharges and interest of up to €8m.”
“Having taken these steps, we believe we have now fulfilled all requirements and look forward to receiving our licence and entering the Spanish market,” the online gaming operator said in a statement to the London Stock Exchange.
The €33m payment follows days after bwin.party co-CEO Norbert Teufelberger said that he believed Spanish authorities had “no claim to ask for four years of back taxes” ahead of the issue of long-awaited online gaming licences there from 1 June.
bwin, the main sponsor of Real Madrid under a €23m-a-year deal which runs until next summer, is one of the two market leaders for online sports betting in the territory. Rival Sportingbet, which also held around 20% market share until early this year, was however forced to turn off its Spanish operations in late March after a court in Madrid upheld a successful action against it by land-based operator Codere, cutting off the operator’s earnings from its second largest market until it receives its licence next month. Sportingbet operates mainly under the Miapuesta brand in Spain and South America.
Sportingbet confirmed in a statement to the London market today that it remained in discussions with the Spanish Ministry of Finance over a potential additional tax liability dating back to January 2009 and that it would make a further statement shortly.
The last-minute demands for back-dated tax from non-Spanish companies under two laws dating from 1966 and 1977 were imposed by a Conservative government faced with implementing unpopular austerity measures aimed at cutting the country’s budget deficit amid a worsening economic climate. The unemployment rate in Spain reached 24% in the last quarter.
The Spanish regulator has confirmed the receipt of beween 55 and 60 applications to offer online products including betting, poker blackjack, roulette and baccarat. All products will be taxed at between 20% and 25% of gross profit. Slots, bingo and in-play betting have not yet been included in the regulation. Bet365, Betfair, Ladbrokes, 888, William Hill and Paddy Power are among the other pan-European operators known to have applied for permits in Spain.
