Spain awards licenses for online gaming
LONDON (Reuters) - Spain has awarded online gaming licenses to companies including Bwin.party digital and Sportingbet in a move that will raise tax revenue and removes regulatory uncertainty hanging over operators.
As many as 59 firms have applied to operate in the cash-strapped country. Companies will pay tax at the rate of 25 percent of gross gaming revenue, Bwin.party said.
Spain has raised around 70 million euros ($87 million) in back taxes in recent weeks from companies who fell foul of decades-old decrees governing gambling. Future income from taxing online gaming will be a useful source of revenue for Spain as it struggles to rein in its deficit.
Bwin.party, the world's largest online gaming company, said around 4 percent of its revenues were generated in Spain last year. The company is known in Spain through its shirt sponsorship of soccer champions Real Madrid.
William Hill, Britain's biggest bookmaker, and online gaming company 888 both said they had been granted licenses.
A number of European markets are regulating their online gaming markets, helping to take them out of a legal grey area that has worried investors.
"We are moving towards an environment that is highly taxed and highly regulated. That is where operators wants to be, although it will cost them money," said analyst Nick Batram of Peel Hunt.
He said the license awards were good news for operators in Spain but noted that the market would initially be crowded as many companies fight for share.
Spain is a major sporting power and revenues in the sector are estimated to be over 800 million euros in 2014, according to gaming association Jdigital.
Spain's Treasury said it was informing companies of the outcome of their license applications on Friday but would not release a full list of those who had been successful until next week when sites can go live.
Spain is one of Sportingbet's main markets and the company's operations there have been suspended since March because of a legal injunction won by Spanish casino group Codere.
"The grant of the eGaming license negates part of the injunction, which was imposed on Sportingbet's Spanish business on 27 March 2012 and thus allows Sportingbet's Spanish business at www.miapuesta.es to commence trading when this regulated market opens," Sportingbet said.
The company is applying to a court in Madrid to have the rest of the injunction lifted.
(Additional reporting by Sarah White in Madrid; Editing by Hans-Juergen Peters and Jon Loades-Carter)