888’s earnings are in and they’re nice and shiny. The bottom line earnings themselves look bad if you focus only on the end numbers, but almost everything else looks great. Net earnings came in at $29.5M versus $56.9M for 2014. That’s a 48% drop, but as with all numbers, there is a story to be told here. The top line is growing in the right places and in the right markets, and 2016 looks bright for 888.

So what’s the excuse for a nearly 50% fall in 2015 earnings over 2014? Taxes. But how can that be the excuse if EBITDA is down almost 40% as well? Isn’t EBITDA earnings before taxes, designed to be the figure that separates taxes so you can see how business is actually doing? No, not really. It’s more Orwellian than that. Don’t let the acronym fool you, because EBITDA actually includes a lot of taxes. The taxes excluded from EBITDA are strictly corporate income taxes, which are the smallest and most insignificant part of the taxation that European gaming companies now have to deal with. The difference between this year’s taxes and last year’s not counting what is left out of EBITDA is $42.6M, which is more than the difference between the official 2015 EBITDA figure versus the figure for 2014. Total non EBITDA taxes in 2015 were 270% higher than 2014!

Here’s what we’re dealing with, specifically. First, gaming duties were up an incredible 216%. Add onto this a $10.2M value added tax (that’s a new thing) plus a retroactive tax of $8.4M from something to do with Austria and Romania. None of this is excluded in EBITDA. It’s just the state taking a share at every level of business. Actual corporate income taxes for 888 were only $3M, kindly excluded from EBITDA. None of this even counts dividend and capital gains taxes for shareholders, which also affect the value of the company, not to mention that taxing the shareholders of a company is taxing the owners of the company, is taxing the company itself. The final asterisk on earnings is that 888 lost an additional $14.6M in legal fees with its aborted bwin.party takeover bid.

The ironic thing is that corporate income taxes are what get the most attention in election campaigns. Rest assured that if something is actually important or consequential, your elected officials will never talk about it in public. 888’s corporate taxes went down this year specifically because all the other taxes duties fees or whatever politicians want to call them went sky high. In other words, corporate taxes were lower because the State took so much more at earlier taxation stages.