Spain Haunts Online Casinos for Back Taxes

As many casino industry insiders already know, the Spanish gambling laws are changing.

The Spain has allowed multiple online casinos in Spain to operate freely. In effect, it has led many European-based, especially British casinos (licensed in Malta, Channel Islands, and Gibraltar) to offer gambling entertainment to the Spanish players.

Now, the Spanish government is stating that these sites will need to get licenses directly from Spain and that not every site may qualify. Many see this as another desperate move by a recession-stricken country, attempting to raise any revenue and avoid going the way of the Greeks - which is not that far away.

In a single move, the Spanish government is demanding that all the sites, including mobile casinos in Spain, need to pay back taxes, even going back for years, from the revenues they acquired from the Spanish gamblers. Thus, from now on, the licensed online casinos will need to pay taxes plus anything that the government seems due, but for which it didn’t ask before.

The Spanish tax authorities already have a list of these casinos and are contacting them. The demands are placed under ancient laws going back to 1960s and 1970s, way before Internet gambling became a reality. Under this reasoning, why not go to the laws of the ancient Greece or Rome and seek new taxes?

This voracious appetite for new tax revenues may actually hurt Spain as more industries become a target for things they never expected to pay taxes for. This may bring many businesses to their collapse as new taxes weren’t planned into the operations and the cash flows accounting.

When it comes to online casinos, they will not only need to pay taxes, but also interest and surcharges. Take, for example, Bwin. The company just announced it will need to pay the Spanish government $33 million euros ($43 million) in sudden taxes. Only then it may be allowed to operate in Spain. Is that an extortion?