A proposal to raise the tax on online gambling is on the table
The tax on online gambling is, once again, the subject of discussion. In the debates on the General Budgets in Congress, some parliamentary formations have proposed to raise the tax to 30%, instead of the current 20%. The arguments in favor of such an increase have to do with the average number of players that has increased especially as a result of the conditions of the coronavirus pandemic and the money that moves online gambling that has also increased considerably.
Could we be facing an increase in the tax on online gambling? Some political formations have defended this during the debates of the General Budgets with concrete proposals. ©Firmbee/Pixabay
The draft General State Budgets 2022 it was presented at the Congress on October 13. The budget provides for a significant increase in games dedicated to the regulation and surveillance of online gambling under the competence of the Ministry of Consumption and the Spanish regulatory authority, the DGOJ. Last week the budgets were debated in Congress before going to the Budget Committee that must approve the final document on November 22.
Parliamentary forces in favor of the increase in the online gambling tax
The General Budgets have passed their first procedure in Congress and have had the support of a large majority. However, in the debate that has taken place some parliamentary forces have expressed their desire that the current tax on online gambling on net profits that reaches 20% increases to 30% .
Specifically, the formation Esquerra Republicana de Catalunya (ERC) would have registered an initiative in this sense. A proposal that would not have sat very well in the sector. In the Esquerra initiative it also calls for the abolition of tax advantages which they enjoy companies located in Ceuta and Melilla, to which at the moment the gambling tax levies 10%.
Already in the time of President Mariano Rajoy, the enclaves of Ceuta and Melilla were considered key for the development of a series of industries that could benefit from a favorable tax regime . The idea was to attract important Spanish companies from the gaming sector to these cities and, in some way, compete with Gibraltar and the island of Malta that happen to be the nerve centers of the gaming world in Europe .
Currently, companies such as Wanabet, Codere, Versus, Luckia or Jokerbet are located in Melilla, while in Ceuta we find other main players in the igaming industry, firms such as Playtech, Betway, Casino Barcelona, Sportium, 888 or bwin.
The reasons behind the initiative
According to information, the leader of ERC in the Congress, Gabriel Rufián, would have relied on the analyzes published by the DGOJ in which the increase in the number of online players is indicated, with a monthly average of more than 200,000 users in the second quarter of the year . It is argued that in a period of 4 years the number of online players would have tripled , with the consequent risk of addictions that this entails. Last year, the number of active players amounted to 1,481,804, a 8% more than the previous year .
Another of the reasons given by ERC for the increase in taxation applied to online gambling and betting is the high volume of business which, as we know, increased during the pandemic with a greater number of people accessing entertainment over the internet. In this way, the initial reasons on which the current taxation for online gambling was based would no longer be valid.
The key figure to know the gross profits of the online sector is the Gross Gaming Revenue (GGR) . In the first six months of the year this figure exceeded 450 million euros. In 2020, according to the DGOJ , the revenue from the game came to the 850 million euros, 13.70% more than the previous year . Therefore, it would not be surprising that 2021 would once again set a revenue record exceeding the figure of 900 million. And this is not something typical of New Zealand, but the upward trend of online gambling is observed throughout Europe.
