Spanish Online Gambling Industry Over Taxed and Saturated

Published Sunday, March 03, 2013 -

The Spanish gambling industry has been criticized lately by the Spanish trade association Jdigital which has pointed out the obvious saying the Spanish online gambling market is overtaxed, overcrowded and too restricted in its offerings. Jdigital believes the market will be worth €225m in 2013 and €250m if operators can get the officials of the government to offer slots and betting exchanges. Jdigital’s 2012 annual report reveals that the regulated market generated €88m in gross gaming revenue since the online gambling industry was liberalized and is growing at a rate of 10% every month.

The Spanish gambling giant Codere which was established as far back as 1980 has been expanding ever since. William Hill’s joint venture in Spain ended in January 2010 with partners Codere buying William Hill's 50% stake for €1, after both parties had invested an 'initial' €10m in 2008. The company is not doing that well in the Spanish jurisdiction mainly because of the economy in Spain bringing revenues down 6.9% and earnings down 18%, despite wagering revenue rising 69% thanks to the addition of 467 new betting outlets in Valencia and 133 more primarily in Madrid and the Basque Region. Codere hopes to add another 300 or so in Galicia and Murciaby the end of 2013. Codera has been granted a license to operate online gambling in Spain but has not yet released any information as to the plans it may have. The company has expanded into an international gambling operator with massive holding in emerging markets in Mexico and Argentina. The Spanish market is still languishing with the economy in disarray. 

Jdigital’s report suggests it may get worse for some larger operators that can’t profit from the slow market conditions in Spain with the current 25 percent tax on profit demanded by the government regulators. Jdigital has stated operators “cannot yet achieve acceptable performance limits to keep the business in the country.”

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