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Christian Tirabassi, Managing Director, Ficom Leisure - Advisory & Investment Boutique
After years of waiting and frustration, particularly by the local land based gambling op- erators, the Spanish parliament has finally approved the new Gambling Law which pro- vides the legal framework for online betting & gaming in Spain. The new Law is a wide framework with general principles and playground with a num- ber of issues yet to be defined and clarified. This is due to happen very soon, the National Government intended timeframe to grant the first online gambling licenses is December 2011 (before 2012 national general elections).
Like in other online regulated markets such as Italy, and more recently in France, the regulatory process now taking place in Spain is expected to provide a major boost to the growth of the online segment of gambling. Within this evolution we see tremendous opportunities for international operators looking to further expand in this promising market, as well as for local land based op- erators that can now enter the online segment and capitalize on their brands, player base and distribution networks.
infoRmation panel ADULT POPULATION: ..........................35 million HOME BROADBAND: .........................62 per cent
CURRENT LEGISLATION: ..................................... Law 13/2011
REMOTE GAMING PERMITTED: ............................. Madrid, Basque country and Aragon have their own regulations.
GAMING TAX: ...................................................... Varies. A mixture of turnover and tax on net profit, depending on type of gambling activity. 25 per cent over net gaming profit for casino, fixed odds betting and poker. See table for a more detailed breakdown of tax rates and methods of calculation.
SIZE OF MARKET: ................................................ No limits on number of licences.
TOTAL GAMBLING TURNOVER: ............................. ¤1.5 billion (2009).
TOTAL ONLINE GGR: ............................................ ¤315 million estimate (2010) - AEDAPI
REGULATORY BODY: ............................................ Economy and Treasury Ministry, the National Gaming Commission (to be established) and the Gaming Policy Council
their services to Spanish consumers until the New Year, when the ‘First Round’ licensing process will conclude. Operators are still required to pay their taxes during this interim period and the first payment was due at the end of July. After this period, secondary legislation will apply and unlicensed operators would be committing an offence by advertising, engaging in sponsorship deals, and offering their services to Spanish citizens. Offenders would face severe punishments – from €1 million up to €50 million.
• Servers need not be located in Spain as long as they can be monitored by the NGC, although they may require operators to set up ‘Replica’ / ‘mirror’ servers that need to be located in Spain.
• Monitoring by the NGC on enforcement of IP and financial payments blocking measures.
• Minimum age to participate in gambling activities is 18.
• Licensees must operate under a ‘dot es’ domain.
Taxes and methods of calculation:
• Taxes and guarantees: For both there will be a mixture of turnover and net profit,
depending on the type of gambling activity. Financial (securities) guarantees vary from 1.5 per cent to 2 per cent on betting turnover on the preceding year and 6.5 per cent to 9 per cent on GGR on the preceding year. Further regional taxes may also apply depending on any additional online licence. This tax provision is already in force and operators need to be registered with the Spanish tax authorities especially since the first payment were due at the end of July.
Despite the high barriers to entry there are certainly opportunities within this profitable market. According to Christian Tirabassi, Managing Director and Senior Advisor of Ficom Leisure, a corporate & business advisory boutique specialised in the gaming industry, “Spain is in our opinion the new licensed online gaming market to look at in Europe after Italy, thanks to a comprehensive portfolio of permitted and viable gaming taxation mainly based in Gross Gaming Revenues. With 35 million of adults, a long tradition in gambling, an average spending per person in gambling of more than €400 per year and the
spain has an
estimated 370,000 active online playeRs.
potential to reach simultaneously several Latin American markets, Spain is an extremely attractive igaming market”.
Christian Tirabassi adds, “Within this evolution and growth we see tremendous opportunities for international operators looking to further expand in this promising market, as well as for local land based operators that can now enter the online segment and capitalize on their brands, player base and distribution networks.”
the maRket sectoRs The online market has experienced tremendous growth in the past few years, in stark contrast with the land-based market that is still feeling the direct consequences of the economic slowdown, mainly due to a drop in tourism. Spain has an estimated 370,000 active online players (1 per cent of the adult population), an increase of 33 per cent from 2009. In 2008 the country earned just over 1 per cent of GGR as a percentage of national GDP from the regulated online sector. Unsurprisingly, the majority of revenue generated by Spanish consumers went to offshore operators that did not pay Spanish taxes.
According to Ficom Leisure’s recent Update on Online Betting & Gaming in Spain, “Many of the major international operators are actively present in the country via offline advertising,
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