Stanleybet, a large European sports betting operator, has lost a legal appeal over a hefty $8.7 million tax bill after the European Court of Justice sided with the Italian government in a carefully watched case.

Courthouse News Service said a decision released this week by the top European Union appellate court in Luxembourg found that Italian taxes on betting are not “discriminatory” when applied to companies operating in Italy, but based in other nations.

The case will next be heard by a court in Italy for a final resolution. The dispute originated three years ago when the Italian government ordered Stanleybet to pay for taxes on gambling transactions between 2011 and 2015, the news report said.

“The imposition of that tax on Stanleybet Malta cannot be regarded as discriminatory,” the high court’s five-judge panel ruled. 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.”

Stanleybet Challenges Double Taxation

Stanleybet, a 62-year-old company founded in Northern Ireland, runs data transmission centers in Italy where online bets can be placed, Courthouse News Service explained. Stanleybet had argued its headquarters are on Malta.

The Mediterranean island has its own taxes. So, Stanleybet claimed it was being taxed twice for the transactions.

The Provincial Tax Commission of Parma, Italy appealed to the EU court, given the dispute. Stanleybet has licenses for retail and online operations in the UK and in other European nations. It contends its Italian operations are cross-border under the Maltese license.

Stanleybet Was Subject of Several EU Legal Decisions

The company had mixed success with earlier EU legal appeals involving the Italian government.

It was successful in 2003 when the European Court of Justice ruled on the Gambelli case. The judges concluded back then gambling was a service. The judges also held that cross-border betting services could not be prohibited from national markets, Courthouse News Service said.

In 2007, in the Placanica ruling, the high court said the Italian government could not place restrictions on any foreign company that it was not placing on Italian companies, the news report adds.

But Stanleybet lost a 2015 EU appeal on betting licenses and a 2018 appeal on the Italian national lottery.

Even with the mix of court decisions, Stanleybet says on its website it has an “established track record as a fair and responsible private sports betting company which continues to support its right to offer innovative sports betting services in the EU in a responsible and transparent manner and in line with EU regulation.”

“The company is committed to protecting its customers by applying high standards of internal policy compliance guided by its core principle of transparency in all corporate operations, whilst guaranteeing their right to choose the most innovative and entertaining sports betting products on the market,” the website adds.

Currently, Stanleybet Group operates in Belgium, Cyprus, Denmark, Italy, Malta, and the United Kingdom. It has over 2,000 shops.

Stanleybet also operates in Croatia, Germany, Nigeria, and Romania via Magellan Robotech. That company develops gaming products.