By Jana Sedlakova
Spain has finally issued its internet gambling licences. The Spanish gambling Act from May last year regulated mobile and online gambling in Spain for the first time. The tax for the services varies depending on the gambling/betting activity. Most gambling is subject to gross profit tax rising up to 25% of gross gaming revenue.

The new regime recognised 4 general licence categories under each of which are so called singular licences which must be obtained for the relevant product. Firstly ‘betting’ with singular licences for a) pari-mutual sports betting, b) pari-mutual horserace betting, c) sports exchange betting, d) horserace exchange betting, e) other exchange betting games (c, d, e licences not issued in first wave of regulation). Secondly ‘other games’ with singular licences for a) Roulette, b) Poker, c) Blackjack, d) Baccarat (punto banco), e) social games, thirdly competitions and finally ‘raffles’ (currently not regulated). There is likelihood that slot games could be regulated by the end of this year.
Those operators who have successfully applied for the Spanish online gambling licences are enjoying being at the forefront of the Spanish online gambling market. 

Global Betting and Gaming Consultants forecasts the total Spanish-licensed interactive market could be worth EUR 1 billion by 2015.
Adherence to the new regulatory environment is key. Various firms have paid back taxes to the Spanish Treasury for their previous activities in the country, including the likes of Sportingbet and Bwin.Party. Licences have been issued to 53 separate companies including Cirsa, Codere, William Hill, Ladbrokes International, and Unibet’s B2B division Kambi.
The gambling laws from the 60’s and 70’s previously deemed irrelevant have been revived. 
The requirement to pay back tax for the period January 2009 to May 2011 as if having operated on a Spanish licence during that period, has hit the headlines. In times of severe economic conditions this may prove to be an effective tool and set a precedent for other jurisdictions. Spain has been accused of undertaking an ‘austerity grab’ in an act of desperation. The discussions around the legality of the back-dated tax duty may be endless and this may be challenged at a later date. 
Willem van Oort, CEO at Gran Via Online, stated that “back tax is a tricky issue and since this was ‘self assessed’ I am sure operators as well as tax authorities will appeal against the initial payment”.
It is questionable whether obtaining a licence was not dependant on the tax settlement with the Spanish authorities but reading between the lines this seems to be the case. For example Bwin.Party, in a statement clarified their payment as a prerequisite to a successful grant of the licences: “the payment is intended to secure the Group’s position in Spain in the context of its application for eGaming licences”. Similar comments were made in the statement published by 888 Holdings: “following this payment, 888 believes that it has fulfilled all requirements necessary to receive a Spanish eGaming licence, with awards set to begin at the start of June 2012.” 
Ciaran O’Brien, Corporate Affairs Director at Ladbrokes Plc, said “we are pleased to be among the first wave of licensed online operators in Spain. We do believe tax rates are high in Spain but will work with the regulator over time to work towards a sensible rate that maximises revenue and compliance.” With the Spanish economy facing multiple crises any leniency towards taxation policies may be optimistic. For illustration, on 30 May 2012 the Spanish stock market sank to its lowest in several years and the Spanish national debt reached nearly €100 billion. Spain has announced its intention to seek financial support for the financial sector from the European Union. 
Nevertheless, Willem van Oort believes that the tax measures will be changed to help to maximise revenues, he said: ”that is quite likely, as well as the introduction of exchange betting and permission for slot games to achieve more tax revenues”.
A different question arises when considering the new Spanish regulation from the European Union perspective. It can be assumed that shelter for national interests will prevail here as it does in other Member-states. However, a level of cooperation is anticipated by some. 
Willem van Oort stated that “cooperation is indeed expected and would be a great move, especially for intra European poker liquidity and would follow the spirit of the EU principles”; important in light of the fact that poker players under the new regime cannot enjoy international tournaments.
The industry response from the key players in the market confirms the general presumption that the future lies in regulated markets and as we see, at a high cost. The industry appears to have no choice but to pursue regulated activities and to operate with integrity. This is likely to intensify whilst public purses remain under pressure.