Stanleybet Loses Tax Appeal in Court

One of the largest European gambling operators, Stanleybet, has lost its appeal to the European Court of Justice (CJEU) in relation to taxes it faces in Italy. The international operator was originally stuck with a tax bill of €8 million ($8.7 million/£6.9 million) due to its activity in Italy.

A gavel, as would be used in a courthouse.

The high court in Europe has ruled against the gambling operator, Stanleybet. The court has ruled that the operator must pay an outstanding tax bill of €8 million after it found that there was no discrimination from the Italian government. ©qimono/Pixabay

After receiving the news that the Italian government wanted the operator to pay this amount in tax, Stanleybet decided to take the matter to the highest court in the EU, the CJEU. The case was a long-running one, dating back to 2016.

Stanleybet was originally founded in Northern Ireland in 1958, but has since moved its base of operations to Malta. The operator runs data transmission centers across Italy. In these, customers can place online bets with ease.

Due to the online nature of this betting, it may be the case that Stanleybet assumed that it did not count as operating in Italy. The law in Italy states, however, that all gambling transactions, even those that are based outside the country, are liable for standard gambling taxation.

As a result of this, the Italian government issued a tax bill to Stanleybet for the period dating from 2011 to 2015. The bill amounted to €8 million, which the government sees as its fair share of the gambling operator’s takings.

Stanleybet immediately took issue with this tax bill. The company stated that because it was also paying taxes in Malta, where its headquarters are located, it should be exempt from taxes in Italy that would leave it paying double the amount on the same operations.

The operator even went as far as to say that the Italian government was discriminating against foreign companies doing business in the country. Stanleybet viewed this discrimination as a breach of the EU charter that aims to prevent discrimination against foreign business.

After a small amount of back and forth between the two parties, the Provincial Tax Commission of Parma, in Italy, decided to send the matter to the European high court as this was seen as the easiest way to resolve the issue. The court has since decided and ruled in favor of the Italian government.

In its ruling, the panel made up of five judges that preside over the court decided that Stanelybet was legally required to pay the sum. The decision was made because the court ruled that Italian tax applies to all operators that conduct business and manage bets on Italian territory.

The CJEU stated that there didn’t need to be any different taxation processes depending on where a company was established or where it is predominantly based. As a result of the ruling, the court also announced that the issue could not be seen as an issue of discrimination from the Italian government against a foreign company.

Previous Issues With the Italian Government

Stanleybet will likely be of the inclination that the tax bill levied against it was in fact an act of retaliation against it because of its previous head-to-head disagreements with the Italian government.

Previously, Stanleybet has won in the courts after altercations with Italy. In 2003 and 2007, for example, the company came out on top after the European high court ruled in its favor. More recently, however the CJEU has sided more often with Italy. Stanleybet lost its court appeals in 2015 and 2018.

In 2018, Stanleybet lost its challenge to the lottery monopoly in Italy. In this case, the CJEU ruled that the Customs and Monopolies Agency (ADM) in Italy was legally allowed to issue a single license to operate a lottery in the country.

Stanleybet had taken issue with the decision made by the ADM to award a nine-year exclusive license for a single company to run the lottery in Italy. The claim was brought to the high court in 2016 and in opposition to the tender process the ADM used to grant the license, as well as the legality of an exclusive license itself.

In this case, the CJEU ruled that it was perfectly legal for a regulator to decide on its licensing model, as long as it is consistent with the objectives that the regulator has set out. Such objectives include things like commitments to tackle problem gambling.

The recent ruling from the high court marks another loss in a succession of appeals to the high court for Stanleybet. The gambling operator will no-doubt feel unfairly targeted by the Italian government due to their historical run-ins against one another. The CJEU has found no wrong-doing by the Italian government in this case, however, and Stanleybet is expected to pay the bill leveled against it.

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