War of Words Between Spain and UK Puts Damper on Online Gambling Deals

Bet365 is one of the world’s most prominent online gambling organizations. The UK company recently joined several other online gambling companies as part of Spain’s gambling community. Spain is still exploring the world of online gambling, having only recently introduced online slots to its games. Along with Interwetten, 888 and Luckia Games, Bet365 will be one of the few legally sanctioned live roulette opportunities for online players.

With preexisting operations already in Gibraltar, Bet365 did not have to relocate for the deal, which some of its competitors were required to do. Unfortunately, the deal doesn’t get to flow smoothly across the table. Spanish foreign minister José Garcia-Margallo continues to object to any working relationships with Gibraltar after their artificial reef damaged Spanish fishing grounds, which authorities are refusing to remove.

The foreign minister has threatened requiring any Gibraltar-based online gambling companies pay taxes to Madrid and use Spanish-based servers. In addition, since many workers will be commuting Spanish citizens, Garcia-Margallo suggests Spain impose a €50 fee on any and all vehicles crossing the border in either direction as well as blocking air space between the jurisdictions.

Spain - UK

British ambassador to Madrid Giles Paxman issued a formal complaint in response. The UK government also released a statement asking for an explanation for the foreign minister’s stern language. The statement also included a commitment to preserving UK sovereignty over the Gibraltar territory. The war of words only got worse when Gibraltar Chief Minister Fabian Picardo called Spain’s behavior akin to a North Korean reaction.

The debate could have a profound effect on the deals between Spain and gambling entities like Bet365. To complicate matters, this conflict escalated as the gambling companies were looking to legally stop the UK from enforcing a new 15 percent online point-of-consumption gambling tax on their operations. Currently, the tax is only 1 percent.