Casino and Gaming Operators in Spain Received a $6M Bonus in 2021

Posted on: August 23, 2023, 06:55h. 

Last updated on: August 24, 2023, 10:36h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

A new report shows that gaming properties in the autonomous community of Galicia received millions of dollars in COVID-19 relief.

The flags of Spain and the autonomous community of Galicia fly on a balcony
The flags of Spain and the autonomous community of Galicia fly on a balcony. The community’s policies on gaming tax cuts led to a loss in revenue. (Image; Pixabay)

Galicia’s government, under President Alberto Núñez Feijóo’s control, decided at the end of 2020 that it would lower taxes on some gambling companies in 2021 to mitigate the effects of the pandemic. At the time, it was forecast that the measure would mean losing around €3.66 million (US$3.98 million) in income for the year.

The official government numbers-crunchers have confirmed that the impact was much greater. The gambling properties avoided paying €5.36 million (US$5.82 million) in taxes.

The government quantified the fiscal impact at €3.66 million, a figure it included in a specific report sent to Galicia’s Parliament as part of a study commission to reform regional financing. In that same report, as it demonstrated a reduction in gaming tax revenue, the government also requested that parliamentarians greenlight a measure to give it more money.

This summer, the Board of Auditors, Galicia’s official government accountants, published its annual report on the numbers from 2021. Through this report, the comptroller determined the real losses incurred by the government from its tax breaks.

More losses are likely, too, as Spain’s gaming revenue rebounds. Although the government argued for the tax cut in 2021 to mitigate the impact of COVID-19, it reformulated the measure in 2022. It maintained the bonus for gaming machines in bars and other venues.

Even though Feijóo left office a year ago this year, it tweaked the tax law again to add bingo operators. In doing so, it argued that bingo is in sharp decline and about to disappear.

Galicia Embraces Gambling

Galicia has been working on new gambling laws for the past five years and is finally making progress. The new Galician Gambling Law will update the 1985 laws and is finally ready for its final approval in the Parliament of Galicia.

Among other issues, the new rules will allow gambling machines to remain in bars after opponents failed to drum up enough support to get them banned. The reform also allows for bigger casinos and will provide for additional oversight of bingo operations, even if they’re “about to disappear.”

One of the most contentious measures of the gambling reform centers on the location of gaming properties. While there had been a push to force any existing facilities to move away from educational centers, creating a minimum barrier of 300 meters (984 feet), the measure failed. However, Galicia won’t approve new properties that don’t meet the requirement.

So far, sports betting operators are in a winning position. The laws will allow sportsbooks at some stadiums and permanent fairgrounds, pending parliamentary approval.