Gambling industry in Spain has been experiencing a steady rise in recent years. The revenues from gambling have been growing despite the latest economic crisis. The gambling industry annually brings the country about 1.13 billion euros, which is about 3% of GDP, according to the report published by the Spanish Gambling Industry Association Consejo Empresarial del Juego (Cejuego) and the University Carlos III of Madrid.
In 2020, 80 companies operating on the gaming market in Spain were mostly dealing with online casinos and online sports betting ventures.
The 2020 resulted in a 13.8% increase of gross income arriving from gambling establishments of Spain to reach 850 million euros. This data was provided by the official industry regulator Dirección General de Ordenación del Juego (DGOJ).
The second most important source of profit (after sports betting) were online casinos — 350.8 million euros with an increase of 33.7%.
- poker — 110.3 million euros (12.96% growth);
- bingo — 16.52 million euros (1.94% growth);
- casino — 350.8 million euros (41.23% growth);
- online sweepstakes — 8.01 million euros (0.94% growth).
The regulation of gambling in Spain: history, facts, laws
In 1985, Spain became a member of the European Union. Gambling became lawful, which gave impetus to the development of the industry in the country. The operation of the casino was regulated by the National Gambling Law.
The Spanish federal law administers online gambling (poker, bingo, roulette, blackjack), while live games are regulated by the local authorities. The whole sector of the online gambling business is divided into two sections, onshore and offshore companies:
- The first are licensed to operate on the local market;
- The latter are foreign companies and may be headquartered in another country or in a special economic zone (popular jurisdictions are Gibraltar, Malta, the Isle of Man, and others). Foreign online operators have been able to obtain gambling licenses since 2012.
- Federal regulation of gambling in Spain
The Spanish Gambling Act №13/2011 of 27.05.2011 establishes the legal order for gambling in Spain. Each type of activity is regulated individually.
- Act №85/2013 of 23.10.2013 recommends to treat money losses in casino as bad investments. Failures give one the right for tax concessions, whereas winnings are considered as incomes; winners, therefore, have to pay duties.
- Article 37 of the Royal Decree on Advertising from October, 2020 stipulates the rules on gambling advertising.
In 2011, the state organization Dirección General de Ordenación del Juego (DGOJ) was established. This is an official regulator responsible for licensing and control over the gambling sector in Spain.
In December 2020, The Directorate General for the Regulation of Gambling in Spain (DGOJ) agreed on cooperation with the Ministry of Economy. As a result, Asociación Española de Normalización (UNE), a new authority was founded. UNE is in charge of regular standards elaboration, which are supposed to be implemented in 17 independent regions of Spain according to the European Union structures.
UNE DGOJ, supported by the Department of Consumer Affairs, has an intention to initiate further developments in the sector of gambling. The second stage suggests creation of the restrictive system to prevent gambling addiction or protect from it, keeping the record of gamblers, online and off-line, and passing the bills which aim to regulate the on-land gambling sector.
- Read on 3snet: Dealing with gambling traffic in the USA
How to obtain the licence and attract gamblers in Spain?
Spanish Directorate General for the Regulation of Gambling is in charge of licensing. Search for the information on the official website http://www.ordenacionjuego.es/es/
A Public Limited Company under Spanish jurisdiction or registered in the European Union is permitted to apply for a licence.
- Read about the procedure of Spanish gambling licence application: types of licences, requirements for applicants, spends.
In March 2021, it was announced that Spanish authorities were going to amend the regulation of gambling and include lootbox in the list of gambling activities. This measure enables stronger control over in-game purchases, which require real money.
The tax put on gambling in Spain
Federal and local laws are the legislative basis for gambling regular order in Spain. Therefore, gambling companies are subject to paying national and local taxes. So, this is the Spanish State Tax Agency (AEAT) to collect state tax, and autonomous communities to set additional tax rates.
Licensed operators pay monthly tax which is 20% of the GGR of gaming companies. But we should note that it is a smaller sum in comparison to the previous rates. It used to be 28%. In addition to tax and duties associated with gambling operations, there is also an administrative duty of 0.075% of GGR.
How to attract the target audience of casinos in Spain
The Kingdom of Spain is located in the south-west of Europe. The state consists of 17 autonomous provinces and has 2 autonomous cities (Ceuta and Melilla). The official language is Spanish, and Catalan, Galician, Basque, and Aranese also have official status in different regions.
In July 2020, there were more than 47 million people living in the country. 7.2 million of them were immigrants (15.22% of the country’s population).
Stereotypically, it is believed that the national character of genuine Spaniards implies them being emotional, extroverted, and impulsive. Somebody might infer from this that people in Spain are prone to gambling.
According to DGOJ, in 2020, when offline gambling establishments in Spain were closed due to the coronavirus pandemic, the coverage of online gambling players increased to 2.9 million people, or 16%.
The Spanish gambling market is known for its high security standards. A research conducted by the University Carlos III of Madrid revealed that in 2019, 84.9% of the population were regular gamblers. But the level of addicted players was only 0.3%. It is a fact that in 2019 users spent 800 million euros on online gambling.
Payment systems in Spain
Payment methods: Visa, MasterCard, PayPal, Neteller, Skrill, Bank transfer, PaySafeCard, Teleingreso, HalCash, MachBetter, Trustly and others.
It is the casino that establishes the minimum deposit, and the limits for topping up and withdrawal of funds.
There are no special prohibitions from the state for depositing and withdrawing money in legal casinos.
Affiliate marketing and advertising in Spain
The Royal Act on Advertising came into force on the 1st of May.
It covers, inter alia, the rules for advertising of gambling in Spain. The main objective is to protect people, especially the minors and addicted gamblers.
So, what are the new norms and restrictions?
- Firstly, it is prohibited to mislead the customers about special offers or to try to attract them with bonuses.
- Advertising by mailing is allowed only providing that the addressees are subscribed and their consent is given. There must be a special option to check the subscribers in a self-exclusion program.
- In social networks, game operators can only send advertising messages to group members.
- Advertising via search engines, social networks, or video sharing platforms, the casino operators must use tools that block information for the minors.
- Famous people or representations of popular characters must not appear in gambling ads.
At the same time, we can’t but say that gambling itself as an entertainment or business is not banned. Online casinos which have obtained a license yet have the right to operate in Spain. The newly introduced law imposes restrictions only on advertising!
However, many casinos have temporarily suspended their advertising campaigns to understand the new rules and not get fined. The first one to understand the new order will attract the customers. Take the edge, drive to Spain!
Online casinos that require audience from Spain cooperate on the basis of:
- CPA (cost per action) — for the first or total deposit;
- RevShare — the percentage of all the player’s winnings.
Spain is on its way to develop gambling sector and to thrive. The country has a competent and understandable legislative framework, the effective body for monitoring and issuing licenses. As a result, citizens of the state have an opportunity to receive high-quality services and play safely. Casino operators are ready to maintain the order, work under the conditions and pay taxes, contributing to the country’s budget.