The Spanish Treasury has responded to an inquiry regarding Bitcoin gambling from law firm Abanlex. The lawyers asked for clarification on several key points from the Directorate General for the Regulation of Gambling (DGOJ), which is a government body accountable to the State Secretary of the Treasury. The State Secretary of the Treasury is the governmental authority “which regulates, authorises, supervises, controls and, if necessary, penalises gambling activities in Spanish State.”
Spanish Bitcoin users have had strong backing by services such as Segundamundo.es and incoming Bitcoin ATMs. Abanlex specifically asked whether or not Bitcoin is considered as money, and if so, whether or not online gambling operators using cryptocurrencies would be required to obtain licensing and pay fees. They also asked whether or not those betting in bitcoins have to checkout (to fiat) at the end of their session, but the firm’s latter questions went unanswered.
The Spanish Treasury responded:
Ultimately, the bitcoin is a convertible virtual currency that can be exchanged between users and, likewise, be converted into dollars, euros, or other currencies both real and virtual. In consideration of the previously explained, the activity of betting with bitcoins is considered to be included within the definition of bets, it is therefore mandatory to obtain the general betting license and the corresponding singular license.
This May Have Effect More than Just Bitcoin Gambling
Pablo Fernández Burgueño, a lawyer at Abanlex, explained the Spanish Treasury statement to Teknautas:
The Treasury says that Bitcoin is not money, but they do consider it as such since the Gambling Act may apply to those gambling services that operate in cryptocurrencies. By principle of analogy, if something is considered money then it applies for not only the law, but for all. Therefore, if the Treasury treats Bitcoin as money under the Gambling Act, then the Treasury will also [treat Bitcoin as money] in relation to Law 7/2012 which prohibits cash payments to cover amounts exceeding 2.500 euros, as well as Prevention of Money Laundering and Terrorist Financing Laws.
Earlier this year, a Union, Progress, and Democracy (UPyD) party deputy at the Congress of Deputies claimed that should any “financial and monetary authorities consider bitcoin to be an electronic medium conceived to be used as a form of payment to the carrier,” then bitcoin would formally be bound by anti money-laundering and anti-terrorist financing limits on payments: You can’t use Bitcoin to pay for anything worth more than 2,500 euros. The Spanish correspondent reporting the story at ElConfindencial, a popular Spanish news source, believes that “Well, it seems that that day has arrived.”
On the other hand, the Spanish Treasury’s decision also means that Bitcoin will be exempt from the dreaded Value-added tax (VAT) that has been an issue in some other jurisdictions in the past. Previously, the United Kingdom had to clarify its position on Bitcoin after initially charging a VAT on Bitcoin trades. Spain’s monetary treatment of Bitcoin is emulated by Finland and the Netherlands as well. Currently, Australia is evaluating whether or not to change its own potentially misplaced Bitcoin tax, the Goods and Services Tax (GST).
What do you think about the Spanish Treasury’s clarification? Comment below!
Images from Shutterstock.