Added on August 2, 2017, in Gambling Articles by Gambling Gurus
The spanish Regulator DGOJ published last Friday the 2nd quarterly report on the evolution of the online gambling market. We review the most relevant data of a document that questions the effect of the measures carried out by the Government and that are those that have become the foundations of the imminent Royal Decree that will regulate the advertising of the game. Gambling licences and authorisations; Gambling activity control; Disciplinary proceedings; Gambling advertising: co-regulation agreement. Code of conduct; General Register of Gaming Access Bans (RGIAJ) Information, transparency and good governance; Studies, reports and presentations. Data of the Spanish game market; National online gambling market. 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.
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.
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.
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. 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.
Almost every European country saw a substantial growth of its gambling industry over the last few years. Spain, however, saw a growth in its online gambling industry that is beyond dramatic.
While land-based gambling in Spain has remained rather stable over the last few years, generating
€340 million in revenues in 2015 and 2016 (and just an additional million in 2017), online gambling has recorded an amazing growth in just a few years.
The Outstanding Growth of Online Casinos
Spain's online gambling industry has grown substantially over the past five years. Spain opened the online betting market rather late – in 2012, and just a year later the industry generated €60.84 million in revenues.
Spanish Gambling Market Size
Statistics provided by Spain's gambling regulator—the Dirección General de Ordenación del Juego or the Directorate General for the Regulation of Gambling (DGOJ)—show that the Spanish online gambling market surpassed the €10 billion turnover between 2015 and 2016. Figures show that online gambling generated only €8.56 billion in 2015. Spain also witnessed a 34 per cent growth in GGR, amounting to €429 million between 2015 and 2016.
But the Spanish online betting industry kept on growing. Statistics from 2017 show that online GGR for sports wagering and casino gambling has rocketed to €560 million. According to data, sports betting accounts for nearly a half of all revenues.
According to mobilecasinohub.com, Spain's online betting market will most likely hit over €1 billion in the next three to five years.
The Upward Trend To Continue in 2018
Looking at figures from Q1 of 2018, Mr. Tirabassi's prognosis might be just right. According to DGOJ's report, Spain's online betting industry marked a 27 per cent increase in GGR between January and March 2018, recording €163.3 million.
Spanish Gambling Markets
Not surprisingly, sports betting accounted for over half of all revenues, generating a total of €81.9 million and marking a 16 per cent growth in GGR compared to 2017 figures. Data shows that 62 per cent (€51.1 million) of the whole is acquired from live betting. On the other hand, pre-match betting accounts for €28.6 million. Surprisingly, horse betting recorded just €1.3 million.
According to DGOJ's report, online casino revenues accounted for €56.6 million of the total. The report also paid attention to the continuing increase in online poker revenues – online poker revenues amounted to €21.5 million. Cash games contribute €8.4 million to the total, whereas poker tournaments accounts for €13 million. According to experts, liquidity activities with France and Portugal are among the reasons for growth in online poker revenues.
Last, but not least, online bingo has grown substantially as well. In Q1 of 2018, Spaniards played 30 per cent more online bingo compared to Q1 of 2014. Total online bingo revenues reached €3.5 million.
Even though online gambling revenues are substantially higher compared to figures from Q1 in 2017, however, GGR was 5.7 per cent lower than the amount collected in Q4 2017.
Horse Racing On The Rise
It is not only the online gambling industry that has grown substantially in Spain. According to statistics, Spaniards increasingly bet on horse racing. In fact, the horse racing sector marked an increase of more than 200 over the last five years. Back in 2013, GGR from betting on horse racing recorded roughly €21 million. In 2017, however, the horse racing sector generated over €90 million in revenues.
The Spanish Government To Cut Taxes
In April 2018, the Spanish government introduced its 2018 budget to parliament. The budget, which was approved by Prime Minister Mariano Rajoy, touches upon various subjects, including taxation on online gambling.
The budget suggests a tax cut of 5 per cent (from 25 to 20 per cent) on GGR. According to the government, this measure will attract licensed and renown operators to the flourishing online betting market in Spain. Moreover, government representatives say this measure will help reduce and eventually eliminate illegal gambling within the country.
Last, but not least, the proposed tax cut will remove any existing tax discrimination between different forms of gambling in accordance with the non-discrimination policies supported by the European Commission.
Jacop Lopez Curciel – chief executive of Optima, a sports betting and eGaming software provider – agrees that these measures could attract licensed operators to the thriving Spanish market. However, Mr. Curciel said that these measures could lead to over-regulation in the future, making the market outstandingly expensive and potentially shutting its doors to new operators.
In response to the proposed tax cuts, chairman of Jdigital—a Spanish gambling trade association—Mikel Lopez de Torre opines that it is difficult to predict what could happen if the 2018 budget is approved. He also emphasized that the country might find it challenging to accommodate 12 new brands on the market without offering at least some consolidation in the near future.