The European Amusement and Gaming Federation EUROMAT has filed a complaint with the European Commission arguing that Holland’s upcoming igaming legislation represents state aid and questioned whether the 20% gross profits tax rate set to be applied to online operators was consistent the government’s “common interest objectives”.
Denmark’s land-based sector launched a similar case prior to the Scandinavian country regulating its igaming market in 2012 and was unsuccessful.
Asked how optimistic it was as to its chances of success, EUROMAT responded: “As regards the Danish case, the European Commission seems to have accepted the Danish Government’s motive of common interest objectives behind the differentiated tax rate (objectives concerning problem gambling). However, the Dutch Government admits having purely fiscal reasons not to endorse an equal tax rate for the online and land-based games.”
The level of igaming tax rates and whether they allow licensed operators to have viable businesses were a recurring theme as European markets regulate their igaming sectors, to which EUROMAT responded: “The important consideration is whether a lower tax rate would actually deliver a significant additional incentive over and above that which could be achieved by applying the same tax rate to both online and land-based companies. Responsible online operators will have to enter regulated markets and pay the applicable tax rates if they want to grow.
“For that reason licences will be attractive to online operators even if they have to pay the same tax as land-based businesses. These companies will either get a licence or geo-block Dutch consumers. There is no evidence to suggest that the remaining category of online companies would switch to becoming licensed operators even with a lower tax rate.”
EUROMAT will hold its Gaming Summit on 28 May in Amsterdam, where the Dutch State Secretary for Security and Justice Klass Dijkhoff will give a key note speech and “is likely to receive a tough reception from industry operators who feel that this proposal is simply an unjustified subsidy for online companies” EUROMAT said in its statement.
It added that much more information had been made available since 2011 with regard to taxation levels and the likelihood of online operators to apply for licences and how they would adapt to the taxation in terms of pay-outs and general marketing.
The trade body also argued that many publicly listed operators had decided to only operate in regulated jurisdictions and “will actively ban consumers of countries where they do not hold a license. In other words: in the case an operator would refrain from applying for a Dutch licence, it will have no impact on the degree of illegal gambling activities.”
EUROMAT joined its Dutch member, the VAN Kansspelen Branche-organisatie in filing the complaint.
source : www.igamingbusiness.com
