by Renee Israel
Following the lead of other top online gambling companies in the business,
888 Holdings has announced that it has reached a tax settlement deal with
Spanish authorities.
The deal means that 888 will need to pay the Spanish government around €7.4
million in taxes for previously operating in the Spanish market.
Ahead of changes to its gambling industry and regulations next month, the
country demanded that a number of companies pay backdated Spanish gambling
tax for the period January 2009 to May 2011.
While it wasn't specifically said as such, it was implied that those
companies which agreed to settle with the Spanish tax authorities stood a better
chance of obtaining a license to offer online services in the newly regulated
Spanish gambling market.
Until now, a number of online gambling groups have come forward to make
public the terms of their agreements with the Spanish government, hence the
announcement by 888 to pay the Spanish tax.
Rival online gambling giant Bwin.party Digital Entertainment has also agreed
to pay €25 million in Spanish gambling taxes, as well as surcharges and interest
of up to €8 million.
Likewise, Sportingbet will pay €14 million plus surcharges and interest of up
to €3.2 million, while Betfair will pay up to €10 million to Spanish
authorities.
888 Completes Spanish Tax Assessment
This week, 888 Holdings announced that they had performed a tax self
assessment for the time period specified by Spanish authorities and found that
they needed to make a one-off payment of €7.4 million.
In addition, to 888 paying the Spanish tax, the group needs to add to that
amount surcharges and interest of up to €1.3 million. According to 888, the
money for the taxes will be covered by its existing cash resources.
A statement released by 888 Holdings said: "The group has been paying gaming
duty in respect of its Spanish operations since May of 2011. Following this
payment, 888 believes that it has fulfilled all requirements to receive a
Spanish iGaming license with awards set to begin at the start of June."
Will Other EU Countries Copy Spain?
The biggest fear among online gambling companies now is that other European
countries may follow Spain's lead and demand payment in back taxes in return for
operating licenses.
However, analysts believe that "short term pain could be long term gain"
according to Reuters article, for internet gambling companies, who benefit
hugely by operating in regulated markets.
"While this is an initial cash outflow, if it aids the licensing process and
leads to more clarity in a key European market, this could be viewed as a
positive in the medium term," BarCap analysts are quoted as saying.
