Spain – Online association calls for lower taxes in SpainBy Phil - 24 April 2017
President and founder of Jdigital Sacha Michaud has emphasised the contribution that the online gaming sector has made to the economy and highlighted the fact that the industry is characterised by “security and transparency”.
However, in a meeting with journalists Michaud said that the online industry is still far from being considered profitable since less than 20 per cent of gaming online companies in Spain are making a profit. According to data supplied by Jdigital land based gaming still continues to dominate the market and makes up 73.52 per cent of total gaming sales.
“It is still an emerging sector. Profitability will take time,” he said. Mr Michaud pointed out that part of the reason for this was the high tax rate on online gaming of 25 per cent which has slowed growth. The President of Jdigital said that of the €10.9bn that were gambled online in 2016 in Spain, the final turnover stood at €429m (34 per cent more than in 2015), once the prizes were awarded. Of this amount 25 per cent tax had to be deducted in taxes.
Mr Michaud also pointed out that as well as high taxes online companies also faced a number of other costs. “In addition, our advertising and promotion costs are high, so profitability is difficult in the short term,” he said. Mr Michaud said that the industry invested €113.8m in advertising and €243 in bonuses, affiliate programmes and other sponsorship deals last year.
As a result the body is calling for tax reform for online gaming which would be more in line with that of other European countries, which, in its opinion, would contribute to attract more investment and would mean higher tax revenue for the government long term.
According to the latest statistics online gaming in Spain generated turnover of €2.9bn in the fourth quarter of 2016, marking an increase of 13 per cent over the third quarter of 2016, and a 20 per cent on last year’s fourth quarter. The online sector is currently experiencing rapid growth which has been boosted by sport betting which represented 44 per cent of turnover. Sports betting generated €1.27b in Q4, marking an increase of 7.7 per cent from the same quarter in 2015 whilst casino was up 54 per cent to €1.2bn, bingo was up 16.7 per cent to €18.8m but poker declined by seven per cent to €415.6m. The results published by the General Directorate for the Regulation of Gambling Affairs (the DGOJ), highlighted how there has been an increase in the amounts gambled in all types of games.