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Stanleybet shall pay € 8.4 million of betting taxes for the business operated in Italy by one of its CTDs according to the European Court of Justice (CJEU).
The business of CTDs in Italy and the measures taken against it
For a long time, Stanleybet has been running under its Maltese license (and without holding an Italian betting shop license) a business of CTDs that are basically Internet cafes connecting to Stanleybet’s servers and operated as betting shops.
The same business was replicated by a number of operators with the goal of avoiding the payment of Italian betting taxes by relying on the EU principle of freedom to provide services through their Maltese gambling license which was restricted by the need to obtain a local license.
However, during the last years, the Italian Government started a harsh fight against CTDs, like those operated by Stanleybet, adopting a law expressly providing that Italian betting taxes are still due even if the business is run in absence of an Italian gambling license. Following such a measure, CTDs were given the opportunity in two instances to cure their status and begin operating under a temporary gambling license against the payment of backdated taxes.
The position of Stanleybet and its fights against the Italian Government
Stanleybet decided not to join the cure proceeding and continue operating its CTDs under its Maltese license without paying Italian betting taxes. But Italian tax authorities challenged the lack of payment of € 8.4 million of betting taxes to one of Stanleybet’s CTDs deeming Stanleybet jointly liable with the CTD for the payment.
The request of payment was appealed by the Stanleybet on the basis of contrast with the EU principles of freedom to provide services and of equal treatment and non-discrimination, and the matter was ultimately escalated to the European Court of Justice for its preliminary ruling.
The position of the CJEU on the lack of payment of betting taxes by CTDs
The CJEU held that the request of payment of betting taxes to CTDs, like those operated by Stanleybet in Italy, through a foreign EU license is not discriminatory because
- the Italian single betting tax applies to all operators who manage bets collected on Italian territory, without making a distinction on the basis of the place of establishment of those operators. “Italian law does not lay down a tax regime that differs according to whether the provision of services is executed in Italy or in other Member States“, and
- the potential risk of double taxation in Italy and in Malta of Stanleybet needs to take into account that EU Member States “enjoy a certain autonomy in the area of taxation provided they comply with EU law, and are not obliged therefore to adapt their own tax systems to the different systems of tax of the other Member States“.
Based on the above, the CJEU reached the conclusion that EU laws shall not be interpreted in the sense of precluding the legislation of an EU Member State that makes CTDs established in that Member State liable to a tax on betting jointly and severally with betting operators, their clients, which are established in another Member State, irrespective of where those operators are established and the absence of a license to organize betting.
The open question is whether such a decision is the last stage of the saga between CTDs and the Italian Government and whether even Stanleybet will decide to pay Italian betting taxes.
