Spain’s new cash-strapped, conservative government is now demanding that online poker license applicants pay backdated taxes for their last 4 years of operation within Spain. This abrupt ultimatum comes just weeks before the first licenses were slated to be issued on June 1st.
It has been reported that Pokerstars is facing a €200 million tax bill, while bwin.party owes €60m and Sportingbet/Miapuesta owes €50m. Other sites with a smaller Spanish player base will owe smaller amounts in back taxes, should they choose to receive an online license to be able to continue allowing Spanish players.
The potential licensees are of course outraged by this demand, especially since Spain had no legislation whatsoever regarding online poker until February 2011. The original legislation permitted current operators to continue in Spain, before official licenses were to be issued, as long as they paid taxes beginning in July 2011.
Although Pokerstars would have to pay the most to stay in the Spanish market, they may well pay it in order to retain the lucrative market. Current online poker legislation in Spain includes a stipulation for a segregated player pool, similar to that of France and Italy. For example on Pokerstars, players located in France may only play on Pokerstars.fr against other French players. This legislation could end up giving Pokerstars a near monopoly on the Spanish online poker market. Pokerstars already has the largest Spanish player pool and the other operators may simply drop out of the Spanish market rather than pay 4 years in back taxes.
There is a chance, although very small, that this Spanish market development could open some doors for other networks to move in. Smaller networks, which currently have only a small 4-year tax bill to pay, could be poised to swoop in and offer Spanish players a solid platform on which to play online poker. This is a longshot however, as the Cara de Poker Spanish only iPoker skin just recently closed, moving all of its players over to PokerStars in December of 2011.
In all likelihood, it will be Pokerstars that will soon earn its place as the largest Spanish poker site. Although at this juncture it appears that it will cost them a very significant amount of money to do so.