Innovate Gaming - Technology driving the Gambling Industry

Online Gaming has been misconstrued for some time in Spain, with no specific laws to govern the business. The market is currently monopolized by government-owned lottery operators ONCE and LAE, with both foreign and domestic companies not authorised to operate in the country.

Innovations in Internet and Mobile technologies have significantly expanded the market of late, prompting Spanish consumers to use foreign gambling services. It is estimated that companies generated more than €300 million from Spanish customers in 2010.

After long battles against bureaucracy, a new gambling law was approved by Spanish Congress in May this year allowing companies to operate within a controlled environment. The legislation permits Online and Mobile Gaming for the first time in the country and establishes a regulatory framework to govern operations.

Online Casino games including poker, as well as Sports-books are permitted under the law. Live in-play betting and Bingo games have not be approved at this stage, due to addictive connotations. This could benefit ONCE and LAE if they can claim exclusive rights to Bingo operations within the scope of their lottery licenses.

Legislation applies at State-level rather than segregated by the country’s 17 autonomous regions, as in existing Spanish gaming law. Online operators will be subject to 25 percent tax on gross profit, one of the highest rates in Europe.

Under the legislation, three main regulators will oversee all online activity. The Economy and Treasury Ministry will be in charge of each new game launched online. The Gambling Policy Council will harmonize the autonomous regions’ policies and a newly-created National Gambling Commission will review applications and grant operator licenses.

Operators will require a general or single license granted by the Spanish National Gambling Commission. General licenses cover the entire spectrum of casino games and single licenses apply to individual gambling games. Operators are also obliged to hold a Spanish “.es” domain name, which can be used to re-direct to an Online Casino.

The law enables an unlimited number of operators to apply for a license and the first licenses will be issued starting January 2012.

One of the first companies to show an interest was Rank Group who announced it will launch a new Online Casino enRacha early next year. The website will offer a wide range of Spanish card games, online slots, skill games, casino and poker games.

UK-based Ladbrokes also intends to move into the market and has partnered with Microgaming to power its new site LBApuestas, as soon as the company obtains a license.

Part of the government revenue collected from operators will be put towards investigating and closing companies targeting Spain without a license. Although, it will be difficult for these companies to capture any market share as big players will move into the market with freedom to advertise.

The European Remote Gambling Association welcomes the bill, but has criticized the need for online operators who are already licensed in the EU will require a separate Spanish license.

Clive Hawkswood, CEO of the Association, said, “We appreciate the fact that, unlike some other European countries, Spain has not adopted legislation in blatant breach of EU law. We believe that this legislation is a step in the right direction. We hope that, through the implementing decrees, the Spanish Government won’t miss the opportunity to create a valid model in Europe.”

The Spanish online trade association AEDAPI has also expressed concerns over the level of tax and not permitting in-play betting will make it very difficult for new companies to compete. The company stated, “We believe there is still much work to be done and many ways to improve gambling laws for the Spanish market.”