The Spanish government is planning to pass online gaming legislation in a few months, with clear intentions of using the recently passed French regulations on taxation to control the sector. In France taxation is applied to the bets instead of the operator’s profits at the rate of 8.5% tax on each bet. In Spain, as in France, the state regulates betting through the game state organizations using the lotteries organization, Loterías y Apuestas del Estado (LAE).

For years the Spanish executive has been trying to reach a consensus with the gaming industry as well with the regional autonomous communities to encompass new gaming legislation to regulate online gambling. The intention of the executive to draft bill ready before summer seems improbable as the text is still under review and the government continues evaluating other European legal systems to reach a final proposal for the future Spanish gaming law. In one way or another, most of the European countries have already regulated online gambling applying tax on profits, which is more attractive for the operators.

Taxing profits has also been approved by some Spanish regions, such as Madrid or the Basque Country with a 10% levy. As operators prefer to devise tax strategies on profit rather than the more irksome tax on bets, online gaming companies are waiting to see if it will be worthwhile to open subsidiaries in Spain, or continue operating online from the countries where they are licensed. (E-06.09.10)

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