European Court of Justice Rejects Challenge to Italian Gambling Taxes

The European Court of Justice has ruled that Italian gambling taxes do not constitute discrimination against companies based in other countries.

The case involving one of the EU’s largest betting companies, Stanleybet, was sent to the European Court of Justice by Italian tax authorities after the British company complained that an 8 million euro tax bill was illegal.

The Luxembourg-based court held Wednesday that because the 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…the imposition of that tax on Stanleybet Malta cannot be regarded as discriminatory.”

Founded in Northern Ireland in 1958, Stanleybet operates so-called data transmission centres, or DTCs, in Italy. In Italy, gamblers can place bets at licensed betting shops and also at DTCs, which operate essentially as internet cafes where gamblers can place bets online.

One of the principal legal concepts of the 27-member political and economic union is that it is illegal to discriminate on the basis of nationality. However, member states are allowed to impose taxes as they see fit, so long as the assessments comply with EU law.

According to the five-judge panel, countries are not obligated to alter their own systems to ensure double taxation within the EU doesn’t occur.

The taxation case will now be returned to the Italian national courts for a final ruling.