There’s good news in the wind for online bingo sites who have moved their operations to the island sovereignty of Gibraltar in the Mediterranean. In fact, that’s a lot of them. A landmark ruling at the EU Court of Justice has resulted in an effective tax break for a lot of bingo businesses that are currently struggling.

Online bingo is becoming a cut-throat business as its popularity continues to soar and more and more businesses enter the marketplace. As a result, when Gibraltar announced that their tax on all forms of online gaming was going to be set at just 15% (many other countries that allow regulated online gaming enforce a much higher level of taxation), it resulted in a large number of gambling sites setting up shop there.

However, disaster struck in 2002 when the European Commission brought Gibraltar before the EU’s Court of Justice, claiming that Gibraltar’s taxes needed to be on par with those of the UK if they were going to continue to operate in that region.

Gibraltar’s lawyers responded by drawing the court’s attention to a clause in Gibraltar’s 1969 constitution which clearly states that Gibraltar is fiscally independent of the United Kingdom. But after two years of wrangling the Court of Justice decided that this wasn’t relevant. In 2004 the case was finally concluded, with the European Commission winning and Gibraltar ordered to bring their taxation levels in line with the UK.

This was very bad news for companies who had specifically set up shop there because of the fact that Gibraltar was ahead of many other nations in terms of creating legislation to regulate online gambling.

But things changed again. In 2006 a similar case came before the European Union, this time in relation to the Azores’ fiscal independence from Portugal. The Azores were successful in their case , this in turn opened the door for the Gibraltar case to be revisited. And this time they were also successful, managing to overturn the 2004 ruling.

The EU Court of Justice, based in Luxembourg, found that Gibraltar was autonomous and was completely separate from the United Kingdom, and as such they could create their own legislation and set their own taxation levels as they saw fit. This is welcome news for cash strapped bingo operators who have been hard hit by the financial crisis this year.

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Tags: bingo operators, Gibraltar, online bingo