Online Poker Sites hit by Spanish Tax RegulationsPosted:May 2012
All eyes seem to be on Spain at the moment as the country faces fairly serious financial challenge. In 2011 tax regulators introduced regulations that paved the way for the regulation of online poker in the country. This came with a licensing system that was proposed for operators of online poker sites. Due to a number of issues the launch date of this system was postponed from 1st January 2012 by 6 months. The new launch date of 1st June 2012 seems set to stick, with regulators now claiming the issues have been resolved.
So What does this mean for Online Poker Sites?
These changes only affect those sites that operate out of Spain. Top15Poker.com has learned recently that those online poker sites wishing to obtain a license to continu operating within Spain, would potentially have to pay back taxes, to potentially as far back as 2008. A number of the biggest sites, namely PokerStars.com, 888Poker.com, Bwin.Party.com and Party Poker.com faced the biggest bills. It was estimated that Pokerstars would be due over $250 Million, over $77 Million for Party Poker, over $60 Million for Bwin and over $80 Million for 888Poker. Sizeable amounts.
How this affects current deals like the takeover of Full Tilt Poker by Pokerstars, remains to be seen. As you would expect, Pokerstars is the only site that has expressed doubt as to whether they would stay in spain, if the tax bill was imposed. At $250 Million, we can hardly be surprised. Many of the smaller rooms that don't have a good presence in Spain must be considering whether just to pull the plug and take their business elsewhere.
How can they backdate tax?
That's a good question, afterall no legislation existed before 2011. This was put forward by the conservative government that came into power in late 2011. The Bureau of Fraud Investigations is currently looking into whether other smaller sites are liable for similar tax bills. It leaves the waters very murky for Spanish players. In the run up to the start of June, we should find out more.
We would advide you don't leave large sums of money in these sites, at least until we see what happens in June.
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