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Are High Taxes Hurting the Spanish iGaming Market?

Challenges abound in the Spanish igaming market.

Are excessive taxes hurting the Spain’s online gambling market? That’s the conclusion drawn by a new Deloitte report titled, Report on the Taxation of Online Gambling. According to Deloitte, Spain’s sky high internet gambling taxes could be costing the country as much as €72.5 million ($98.5 million USD).

Licensed Spanish gambling operators are currently paying 25% of their gross gaming revenue. That’s much higher than other European markets and it’s one of the reasons regulated internet gambling there has proven to be a bust for many operators.

Despite initial high hopes, the opening of the Spanish market has resulted in a stream of big name operators who are heading for the border.

In an interview with EGR Magazine, the study’s co-author, Sacha Michaud said similar mistakes have hampered igaming in France:

[In France the] negative tax treatment has caused one of the most important markets in Europe to be significantly reduced, making it untenable for the majority of companies operating in the region.

Though regulatory and taxation issues are definitely a problem in Spain, they’re not the only culprits. Spanish gaming consultant Eduardo Morales-Hermo, who was interviewed by EGR, says taxes are just part of the problem saying:

The problem with online gaming in Spain as to why it is not reaching the volume expected is far more that just a taxation issue, because there are other factors which are influencing the lack of competivity of the offer.

No matter what the cause, it’s pretty clear that operators are having a tough go navigating the rocky regulatory terrain in Spain.