The Spanish Association of Internet Gamblers (Aedapi), founded in 2006 to promote the development and consolidation of the Spanish gambling sector, hopes that regulation will give Spanish operators a larger share of the EUR800m market forecast for the year 2012 and thus divert more tax revenue towards Spanish coffers. Spain’s national government has proposed a tax cut for most forms of online gambling to 20 percent in its draft budget, but political hurdles still need to be cleared before the bill can be passed into law.
In Spain, it seems that there will be no turning back and the awards of more than 2.500 euros of 'Loterías y Apuestas del Estado', including EuroMillions, will have to pay 20% in taxes by the part excedeed.
EuroMillions, lottery of certain European countries, is included in Spain through the LAE (Loterías y Apuestas del Estado). Previously, the LAE distributed the lottery prizes that were exempt from taxes as income tax, but since January 2013 it will be taxed at 20% all the prizes in excess of 2.500 euros.
For a prize of 3.000 euros, the tax would be 100 euros (500*20%).
For a prize of 400.000 euros, the tax would be 79.500 euros (397.500*20%)
For a prize of 25 millions, the tax would be 4.999.500 euros (24.997.500*20%)
This measure was announced by Finance Minister, Cristobal Montoro, in the context of measures to reduce the deficit.
Some experts say that this tax will decrease considerably the total collection of the lottery. In addition, also warn of the risk that would result in the collection down considering that 50% of the proceeds goes to the state coffers, so eventually would raise less tax than without it, although this will depend on reaction that citizens have when buying their weekly illusion from 2013.
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iGambling Operators in Spain are in a good mood this month. This is because the Spanish Parliament has approved the 2018 Budget giving them a significant tax cut. As of July 1st, 2018, licensed iGambling operators received a 5% reduction in online gambling tax cut. The Spain Gambling Tax Reduction will apply to all betting exchanges, fixed-odds betting and horse racing.
Furthermore, the new tax reductions will cover most online gambling offerings such as sports betting, bingo, poker and online casinos. However, the budget did not include any changes to the tax b online operators in Ceuta and Melilla. This is because Spain’s two autonomous cities in North Africa already enjoy a low 10% gambling tax rate.
The approved budget will thus change the tax on gross gaming revenue for online gambling companies from 25% to 20%. However, Pari-Mutuel sports betting will only see a 2% reduction from 22% to 20%. The Spanish Parliament said the tax cut is to to attract more international gambling operators into the country.
Looking to attract more Gambling Operators
The proposed gambling cuts were announced last April by Cristóbal Montoro, Spain’s former Minister of the Treasury and Public Administrations. In the announcement, he believed the tax cuts would attract more licensed companies. Furthermore, he hopes that these cuts will also help to curb unregulated gambling.
Now that Spain has reduced its online gambling tax, several sportsbook pay per head are considering entering the Spanish Market. Several companies have considered entering the Spanish Gambling market this year.
Online Gambling Tax Spain
This is because the DGOJ had confirmed last December that it would open the license application for online gambling operators. The DGOJ(Directorate General for the Regulation of Gambling) is hoping that these tax cuts will help close these deals.
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Following this announcement, a proposal to to set a levy on gaming revenues by Spain’s Partido Popular (PP) wad made. The proposal was submitted to the Joint Commission for Study of the Problem of Drugs to fund problem gambling treatment.