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Spanish Directorate General Regulation

The Spanish are known as passionate people, and this has spilt over into their love of, and aggressive management approach to, the online gambling sector.

Online and land-based gambling in Spain is under the control of the Directorate-General for the Regulation of Gambling (DGOJ) which have defined gambling as “an activity where amounts of money or economically measurable objects are put at risk on uncertain or future events, dependent at least to some extent on chance.”

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Gaming Act in Spain

Historically online gambling in Spain was handled much the way Australia used to handle it. Online gambling from within the borders of Spain by Spanish players was illegal. However, it did not have any laws in place to govern online gambling by Spanish players at international online casinos.

By 2011 a formalised Spanish Gaming Act was introduced (Ley 13/2011, de 27 de mayo, de regulación del Juego) and this is still the governing position they hold today.

While there is an Act in place, this does not mean it is a perfect system. With Spain comprising of 17 autonomous States and 2 autonomous cities all overseen by a Federal body, the laws can still be tricky as we see in how the Gaming Act is worded when it comes to the required licences for local and federal level gaming:

  • “Online games that are played at the federal level require a federal licence or authorisation. The federal licence is sufficient for operating in each region where the game operates.”
  • “Games (including online games) played within a specific region require the relevant licence of the autonomous region.”

This balance of autonomous regions with a federal body of oversite has had an interesting impact on the licensing agreements.

Despite some regional challenges the intention of the Gaming Act is to ensure that the Spanish gambling public is protected from abuse, combat fraudulent activity, protect minors from gambling underage and support those prone to addictive behaviour.

Licensing

As mentioned above, Spanish law is not beholden to a single regulatory authority but rather each of the 17 autonomous regions puts their own spin on the laws before passing them. At the best of times, online gambling regulations can get tricky as most lawmakers do not actually understand the industry.

What this has led to in Spain is the creation of several variations in the lists of casino games allowed in certain areas. These lists are a deciding factor when looking at what games a provider may create and offer in that region.

An online casino could obtain both a regional and a federal licence to legally provide its services under the Gaming Act. However, in most cases, Operators default to a Federal licence as this seems to override the regional licence even though they are autonomous regions.

In order to even apply for a licence, an operator must meet stringent requirements which include supplying a certificate of incorporation in Spain. If deemed necessary, the details of permanent residency in Spain, and annual financial accounts for at least 3 preceding years to prove solvency may be requested.

It is also necessary to provide financial guarantees that range from €500,000 up to several million Euros depending on the licence type in question.

Potential operators will also be required to show their Anti-Money Laundering plan, their fraud prevention documentation, operations planning and signed agreements with any necessary 3rd party suppliers.

Taxes

The online gambling fees and taxation laws as formulated by the DGOJ are more specific than some other regions with the Gambling Act going into specific details for various types of gambling avenues. Here is a slimmed-down list:

  • General casino games such as online slots: 25% of gross gaming revenue.
  • Fixed-odds betting on sport and horses: 25% of gross gaming revenue.
  • Sports-based betting exchanges: 25% of gross gaming revenue.
  • Pool betting on sports & horses: 15%-22% of total income, not gross gaming revenue.
  • Other games: 10% of the value of any prize awarded.

In addition to the above taxes, the operator will also be liable for fees that range from €10,000 up to €38,000 for the approval of and certification of all licences applied for. There is also an annual fee for Gambling Regulation's regulatory activities, which is calculated as 0.075% of the previous year’s total annual turnover (not gross gaming revenue).

As you can see, Spain is not shy with its fees, especially those that are calculated as a percentage of turnover and not gross gaming revenue. This shows a fundamental lack of knowledge of how online casinos operate as turnover is simply the number of times a player bets their money; it is only a tangible value once you deduct monies paid out to players as in the case of gross gaming revenue calculations.

Benefits of Operator

Despite the aggressive fee structure, Spain is known to be a financially lucrative gambling market and one that under the recent legislation has seen an increase in activity with 2018 gaming revenues climbing to more than €180 million!

In addition to the benefits of being able to advertise online and above the line to a captive audience, there is also the stance Spain has taken towards illegal gambling. Offering unsanctioned gambling to players in Spain carries an enormous penalty with fines reported to range from €1 million up to €50 million and a four-year ban from applying for a licence. If the party contravening the licencing agreement holds a licence already, they will be shut down and banned from providing their services for the period of four years.

Benefits to Players

The DGOJ takes player protection very seriously with all disputes being handled under Spanish law allowing locals to gamble with complete peace of mind.

The Advisory Council on Responsible Gaming (CAJR) was formalised and restructured in 2018 by the Spanish Minister of Finance in a bid to secure the wellbeing of the Spanish gambling population.

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The Spanish gambling regulation is far more complex than most, simply due to their state divisions and autonomous cities. However, their dedication to player safety and very active DGOJ means that locals can enjoy fairly risk-free gambling. With the incredible increase in GGR for the region, it seems that despite the aggressive fee structure, there is enough profit online to attract new operators to keep the players entertained.

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