Posts Tagged ‘online gambling industry’

Tax Collections Bullied the Spanish Online Gambling Industry

After something we may call a minor setback in the form of a bully online betting in Spain can be considered completely legal. Although the Tax Agency of the won a battle against online gambling businesses in regards of back taxes, they are now able to perform all their operations under the Spanish law.

Several betting companies such as Bwin, Betfair and Pokerstars had to go through a legal process against the Tax Agency as it claimed earlier this month something along the lines of “if they wanted to play, they had pay”. With the approval of the new gambling law last year, they could now conduct their online gambling businesses in a legal way, however they were all required to get a licensed and also to domains to be able to provide services to thousands of Spanish players. Their tax rate was set at 25% of their net revenue.

They were basically on their way to a fully legal destiny, ye there as another surprise in store for them: A couple of months ago, the Investigating Office Against Fraud (ONIF) started claiming taxes payment from the previous four years companies operated without legal coverage. Although licenses and taxes have no relation to each, they were put in the position of basically pay the old taxes or there is no license.

The association of online gaming firms JDigital then claimed the government’s legal case is based on two laws: one approved in 1966 and the other in 1977, that apparently have absolutely no relation with online gambling. Due to this delicate matter, online gaming firms issued a veiled threat to pull out of Spain if the government insisted in its efforts to collect the old taxes from the previous four years.

Of course that was not going to happen so they had an agreement and the big companies settled on different amount to pay in order to continue conducting businesses.
Online betting became officially legal on June 5 this year, and all companies were given a deadline of June 15 to adapt their websites and operations to the new Spanish regulations, for example the .es domains.

A Break-Up Between Online Casinos and Online Poker? Part I

The online gambling industry is co-formed by online poker and online casino. When the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006 both parts of the indutry were opposing the ban un unison. Representatives from both, online poker sites and casino operators, spoke out in one voice. This was because the issue at stake concerned both of them, the right to gamble online from the comfort of your home.

The Interactive Gaming Council (IGC) and the Poker Players Alliance (PPA) filed cases against the UIGEA arguing that everyone should be free to gamble from the privacy of their homes and expected to overturn the UIGEA. However, it did not take long for the industry to realize that this issue had more depth to it and that it was not an open and shut case in their favor. As its next move, the online gambling industry started offering a deal with regulation and taxation of both online poker and online casino.

It was only when the online poker sites realized that they had a different card to play in this argument that the online gambling industry faced a rupture. Online poker sites began pushing an argument forward that did not apply to online casino sites. The PPA began to make big stress in the skill factor of poker. Poker is being promoted as a game of skill, the PPA does not argue that there is no element of luck, but they claim that skill plays a greater part in poker and that a good player will consistently succeed in the long run. They have also made some scientific studies that prove this and helps them in prosecutions against land based poker players.

This is an argument that online casinos cannot use because in games like roulette, slot machines and craps are completely dependent on luck. Even games like blackjack and video poker which have some skill into them are mostly based on luck. Also, the fact that players gamble against the casino and not other players which takes even more away from this argument for online casinos.

Come back to the blog tomorrow to read about how a rupture within the online gambling industry would affect online casinos with financial concerns and the UIGEA.

Online Casino and Online Poker Break Up? Part II

The issue that arises with this is the division of the online gambling industry, will it want to divide itself? The other question is what will happen to the online casino industry should the online poker faction succeed in getting poker declared legally as a game of skill and get itself extricated from the UIGEA mess before any concerted action bears fruit?

If online poker and online casino split up in the case that poker is declared a game of skill legally and gets extricated from the UIGEA, then the money power required to fight the administration would be unavailable to the online casino world. This is because the revenue from online poker is a lot greater than the revenue from online casinos as they have a larger share of the market too.

The silver lining is that it would be costly and inefficient for the authorities to pursue UIGEA against only online casino and if they lose online poker then they may drop the whole thing altogether. At the moment this situation is only hypothetical because neither the law nor the government is likely to accept that poker is a game of skill in the near future.

Source: Casino Advisor