The Spanish parliament has implemented a 5 percent tax cut on gross gaming revenues (GGR) of licensed iGaming companies.
Starting July 1, taxes imposed on online gambling operators’ GGR will be reduced from 25 percent to 20 percent after the Spanish parliament approved the country’s 2018 budget, according to the Gambling Insider report.
Taxes on pari-mutuel sports betting are reduced to 20 percent from 22 percent, while taxes on pari-mutuel horse racing and pari-mutuel betting will rise to 20 percent from 15 percent. The new tax rate cut doesn’t include iGaming companies located in the Spanish autonomous cities of Ceuta and Melilla in North Africa, which already enjoy a 10 percent GGR tax rate.
The lower house of the Spanish parliament, the Congress of Deputies, was the first body to propose the idea of cutting taxes on online fixed-odds sports betting, exchange betting and fixed-odds horseracing revenue.The proposal was intended to make the market more attractive to operators that have yet to acquire a Spanish license.
The plan almost didn’t pan out due to the political upheaval stemming from a bribery scandal involving then-Prime Minister Mariano Rajoy and the ruling party Partido Popular (PP – Conservative Centre Right). In June, Rajoy was ousted as prime minister in a vote of no confidence.
Socialist arch-rival Pedro Sanchez, who automatically took over as Prime Minister, decided to push forward with the 2018 budget—including the online gambling tax reduction—to avoid delays and keep the government services running smoothly.
A recent study conducted by consultancy firm Ficom Leisure forecast Spain’s annual online gambling and betting revenue to hit €1 billion to €1.5 billion (US$1.22 billion to $1.84 billion) in the next three to five years.
Ficom anchored its analysis on Spain’s 2017 online figures, with sports and casino gross gaming revenues jumping to €560 million ($687 million). Unlike other European markets, Ficom senior partner Christian Tirabassi said Spain still has plenty of room for growth.