Added on August 2, 2017, in Gambling Articles by Gambling Gurus
Spanish Authorities Respond to Growing Online Casino Market
Everyone loves a flutter, and the growth of the internet since the turn of the millennium has seen the online gaming and casino market flourish into a $36 billion dollar industry – and one that is set to almost double over the next three years.
Online Gambling in Spain. Spain is a country where the industry is growing at an enormous rate – in fact, some experts believe the Spanish market is even bigger than the UK, which is generally seen as the global home of online betting. Regulation-wise, the country has seen a dramatic change over recent years.
Naturally enough, with growth comes an increase in regulatory attention and government legislation, particularly when it concerns an industry that can be so emotive.
Of course, the nature of this regulation varies from one country to another, and this creates an interesting dynamic.
Online businesses can potentially draw a customer base from anywhere on the planet. From a regulatory perspective, it is therefore far easier to focus on the provider than the customer – after all, every operator has to be based somewhere.
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Habanero is a worldwide developer of software for the gambling industry and is among the pioneers in both the B2C and B2B industries. The provider specializes in complex solutions for online casinos and supplies its developments to countries all over the world. Now, Habanero begins to prepare to enter the Spanish game market. In May the Spanish government published a law (Ley 13/2011) that will transform and liberalise most sectors of the Spanish online gambling market from beginning of 2012. Therefore Spain is currently on the top of the strategic agenda of most industry executives. Football365 - Spanish sports fans rank high with UK, French, and Italians when it comes to the love for gambling. In 2015, more than 2.5 million people identified as bettors in Spain. As established in the Spanish Gambling Act (Act 13/2011 dated May 27, approving the gambling provisions), two separate licenses are needed for an operator to offer online gambling activities in Spain.
Online Gambling in Spain
Spanish Gambling Markets
Spain is a country where the industry is growing at an enormous rate – in fact, some experts believe the Spanish market is even bigger than the UK, which is generally seen as the global home of online betting.
Regulation-wise, the country has seen a dramatic change over recent years. Just a decade ago, it was essentially a free-for-all, with the nation's 17 autonomous regions overseeing all forms of gambling according to their own rules.
All this changed in 2011 with the introduction of the Spanish Gambling Act. While this covered all aspects of gambling, including the national lotteries, the authorities made no secret of the fact that it was predominantly aimed at the growing online and electronic casino market.
As well as requiring all operators to apply for a licence, it also restricted advertising and promotion to licence holders only.
When it was first enacted, the legislation completely outlawed slots type games!
This was clearly a situation that would be impractical in the long term – Unsurprisingly, this restriction was lifted in 2014, when Spain made some amendments to the Act, and at the same time granted ten new licences.
A Third Wave
Since then, the online casino segment has continued to thrive – in fact, it has done better than anyone could have imagined. In 2016, the market was worth almost $430 million, constituting an increase of over 30 percent on 2015. Given the numbers, it perhaps comes as no surprise that the nation is rumoured to be opening the doors to a third wave of new licensees later this year.
In 2014, changes to the regulations were accompanied by the opening of a new licensing window, and commentators expect to see the same happen this year, although formal confirmation from Spanish Finance Minister Luis de Guindos is still awaited.
In addition to the new licensing opportunities, it is anticipated that the authorities will also review the rules governing advertising, poker liquidity and the legalisation of a wider range of blackjack variants, and of fantasy sports, which are prohibited under the current rules.
New figures recently released by the Spanish gaming authority DGOJ (Dirección General del Ordenación del Juego) indicate a revenue growth of 17.7% year-on-year, meaning that the industry is currently experiencing a boom.
Despite the fact that sales are down 4.2% in the second quarter compared to the first, growth of 17.7% can be observed compared to the same period back in 2019.
Spanish Gambling Market Size
As predicted by industry experts, the strong performance that online casinos have seen is largely due to two reasons. Firstly, slot machines helped generate sales of 51.9m euros – 30.4% more than in the previous year and 19% more than in quarterly comparison. The live roulette section recorded another significant spike in growth. Sales skyrocketed in a 75% increase on the previous year and climbed to €27m.
These growth spurts have (according to the DGOJ) helped to offset the slump seen in sports betting due to the coronavirus pandemic which saw many major sporting events, such as the Premier League, canceled or delayed.
Betting income, therefore, fell drastically in many countries – including Spain which saw income fall to only €68.1m. This marks a decrease of 20.8% compared to the previous year and 38.4% when examining the first quarter of 2020.
The stakes in sports betting also fell by 49% to €288.9m alongside a drop in live bets by 39% to €698.6m. This drop is also reflected across all betting products where stakes fell by 40% to €1.05B. The sector is recovering slowly with stricter restrictions on advertising likely to prove a hindrance to recovery.
New growth comes amidst controversy surrounding new restrictions
Bonus payments fell sharply in the second quarter because of a ban on these kinds of payments from the end of March to the beginning of June that was brought in because of tightened advertising regulations.
Operators paid out a total of €12.5m in bonuses, which corresponds to a decrease of 57.3% compared to the previous year.
These new stringent measures originated from a cross-party agreement between Spanish Prime Minister Pedro Sanchez (PSOE), Podemos boss Pablo Iglesias and Consumer Protection Minister Alberto Garzon. The agreement involves a legislative alignment of the advertising guidelines for games of chance with those of the tobacco industry. Because of this, the European EGBA had requested the Spanish Government to be more moderate.
Measures for consumer protection have been welcomed by the majority of the industry's key players but concerns have been raised over the effectiveness of a sponsorship ban as this could push players towards unlicensed providers. New safer payment options such as the Pay N Play Casino function is being evaluated for a future lunch in the market.
The online gaming association Jdigital has been particularly critical of the advertising restrictions and Spain's two major state providers, as it is a massive area of concern for state gaming operators that they are not subject to the same regulations as private operators.