The Spanish government approved a five-per-cent cut in gross gaming revenue from 25% to 20%, which action is raising high hopes for the global iGaming industry, attracting eyes to the country, according to reports. The sector embraced the progress as “fantastic news”, coming into effect on 1 July 2018.
Spain’s online gambling sector has been on a steady rise, and the recent announcement boosts expectations for the market. The Dirección General de Ordenación del Juego (DGOJ), the country’s gambling regulator, had reported about a 27% year-on-year growth in online gambling revenue for the first quarter of 2018, soon before the tax cut came to light in June 2018.
Pundits expect the tax cut to be beneficial for everyone. On the one hand, operators are seen to be given leeway for better offers for players, which can boost revenues significantly. On the other side, as a result of the foreseen boost, the government could pocket more in taxes, analysts say.
DGOJ had long been lobbying for tax cuts, but economists said earlier the Spanish economy was not ready for such a decrease. However, as the Spanish economy saw an expansion of 3.1% in 2017, grounds appeared to have been set for the cut.
The recently-announced cut applies to online fixed-odds betting and sports betting, fixed-odds horse racing, betting exchanges and online casino games, bingo and poker, according to reports. At the same time, companies located in Ceuta and Melilla on the northern shores of Morocco’s Mediterranean coast are taxed 10% of online gross gaming revenues, as earlier.
Parimutuel betting gross gaming revenue is also seeing a cut from 22% to 20%, bringing the rate in line with state-owned betting services, according to a report by iGamingBusiness. However, the tax rate for pari-mutuel horse racing and pari-mutuel pool betting gross gaming revenues have been increased from 15% to 20%, the online gaming news site reported.
Malta has long been considered the hub of iGaming and innovation in the region. With the recent progress in Spain, eyes are cast at the Spaniard market in anticipation to see how this will affect the area overall and Malta’s position in the EU-28.