In a meeting held with journalists last week, Michaud said that the online industry is still far from being considered profitable since less than 20 % of gaming online companies in Spain are making a profit. According to data supplied by Jdigital land based gaming still continues to dominate the market and makes up 73.52 % of total gaming sales.
"It is still an emerging sector. Profitability will take
time,” he said. Michaud pointed out that part of the reason for this was the
high tax rate on online gaming of 25 %which has slowed growth.
The President of Jdigital said that of the €10.9bn that were gambled online in
2016 in Spain, the final turnover stood at €429m (34 % more than in 2015), once
the prizes were awarded. Of this amount 25 % had to be deducted in taxes.
Michaud also pointed out that as well as high taxes online companies also faced a number of other costs. "In addition, our advertising and promotion costs are high, so profitability is difficult in the short term,” he said. Michaud commented that the industry invested €113.8m in advertising and €243 in bonuses, affiliate programmes and other sponsorship deals last year.
As a result the body is calling for tax reform for online gaming which would be more in line with that of other European countries, which, in its opinion, would contribute to attract more investment and would mean higher tax revenue for the government long term.
According to the latest statistics online gaming in Spain
generated turnover of €2.9bn in the fourth quarter of 2016, marking an increase
of 13 % over the third quarter of 2016, and a 20 % on last year’s fourth
quarter.
The online sector is currently experiencing rapid growth which has been boosted
by sport betting which represented 44 % of turnover.
Source:GMB / G3 Newswire
