Spain to impose “tobacco-like” restrictions on gambling advertising as Parliament greenlights Sánchez government

Spain’s new coalition government, headed by Pedro Sánchez, has said it will bring gambling advertising regulations in line with those imposed on the tobacco industry.

“We will approve a regulation of the advertising of gambling – online gambling and betting – at the state level and similar to that of tobacco products,” the coalition agreement states. Specific details, however, have not yet been disclosed.

Considering the harsh rhetoric directed at the gambling sector during the latest election campaign, these new restrictions have the potential to significantly change Spain’s gambling landscape. Alberto Garzón is to be appointed as Minister of Consumer Affairs and will oversee the further development of Spain’s gambling regulation.

Below, we have gathered an exclusive selection of expert voices to explain what we do and don’t know, what stakeholders can expect, and how these newly announced measures might impact the industry.

 

The political outlook

Maria Rosa Rotondo, Managing Partner Spain & Portugal at Political Intelligence

At the moment it is still a little too early to predict the specific measures regarding gambling we can expect from the new coalition government.

First of all, we need to wait for the appointment of ministers and the subsequent organization of the different departments. This is relevant, because the government approach may change substantially depending on whether gambling will continue to rest with the Ministry of Finance or changes to Consumer Affairs, as announced.

Subsequently, each minister will appear before the relevant committee in the Congress of Deputies to explain their work plan. This appearance will shed more light on the specific measures we can expect, as well as the expected timelines for their implementation.

This work plan also has to take into account the actual political situation. It will be harder to pass legislation than to announce a set of intentions, even though the prevention of gambling addiction and increased control on gambling in general enjoy widespread public and political support.

Furthermore, this effort requires the participation of the Autonomous Communities that have competencies regarding betting shops. They may have different views on the matter. Hence, cooperation and alignment with the Autonomous Communities in this area is critical.

However, it is not difficult to foresee a harder stance against gambling (both online and land-based). Specific restrictions on advertising “similar to the tobacco advertising regime” are likely to be proposed, considering the fact that this measure is included in the coalition agreement (p. 20).

Therefore, we might expect measures that would require betting shops to cover their doors and windows in order to make them opaque, restrictions on external signs and lighting, as well as the obligation to carry aggressive warnings at the entrance, “similar in content and size to those of tobacco,” meaning that the warnings may cover 75% of the entrance of a betting shop or casino. There might be other restrictions as well with regard to other external advertising.

In addition, the new coalition government will seek to agree uniform criteria with the Autonomous Communities to prevent betting establishments from opening before 22:00 and to place limitations on their proximity to schools.

Other measures included in the coalition agreement are aimed at increasing player awareness, as well as at the prevention, early detection, and mitigation of problem gambling. In addition, we can expect measures that require direct involvement of operators in the development of harm-reducing measures. These new measures will be explicitly included in the regulatory framework that is applicable to operators.

At present, it is still somewhat unclear how the coalition agreement will impact gambling taxes. The agreement states that the administrative fee paid by online operators will be “redirected” to pay for preventative and awareness-raising initiatives. Whether this will mean a de facto tax increase or simply a shift in spending remains to be seen.

 

The view from the industry

Mikel López de Torre, President of of online trade body Jdigital

At this point, it is still too early to tell exactly what will happen. First, we will need to see how the ministries and their competences are going to be distributed. We see the move of gambling-related matters from the Health Ministry, as initially proposed, to Consumer Affairs as a positive development. However, the appointment of Alberto Garzón as Minister of Consumer Affairs is perhaps less welcome news, as he has shown a very negative attitude towards the entire gambling sector in the past.

All regulations have to follow, among other things, the principles of necessity and proportionality; and tobacco-style restrictions on gambling advertising are neither necessary nor proportional. Sensationalist headlines aside, government-released statistics clearly show that problem gambling is not a significant public health issue in Spain.

As I said before, it’s all guesswork at this point. But tobacco-style advertising regulations for the licensed online gambling sector would be, first and foremost, a tremendous boost for black-market operators. This has been proven time and again in the past. In short, imposing unreasonable restrictions on licensed operators may actually aggravate the very issues that legislators are now pretending to address.

 

Legal perspectives

Santiago Asensi, Managing Partner Asensi Abogados

So far, the so-called “tobacco style” restrictions on gambling advertising have only been an electoral promise without much further specification. It should also be noted that, based on previous political rhetoric, we should have been bracing for an almost total ban on all gambling advertising.

Fortunately, governing is much more difficult than making electoral promises; particularly when it comes to an area like gambling, where the legal and regulatory realities are being ignored by the public and politicians alike. Accordingly, I want to believe that the new government will listen to the industry before any restrictive measures are applied.

Whatever the case may be, we need to take into account that any restriction on gambling advertising would need to be proportional to the problem. As the problem gambling rate in Spain is no higher than 0.3%, a full advertising ban would make no sense, legally speaking, and should be challenged in court in the case that such a ban would be introduced.

Pedro López, Managing Partner MartínAndino Abogados

It would be quite feasible for the government to introduce limited measures aimed at restricting or limiting the advertising activity of online gaming operators through a Royal Decree – such as, for instance, prohibiting the betting advertising during the live broadcasts of sporting events.

A total ban on gambling advertising would be far more difficult to impose. In my view, it would require an amendment of the current Gambling Act. It seems unlikely that the current coalition of PSOE and Podemos could obtain the necessary majority.

Additionally, it would be extremely complicated to justify before the courts, or even before the competent EU authorities, that a total ban, or even severe restrictions, could be imposed on the online gaming sector, while the major lottery operators would – as the current government intends – remain unaffected.

Moreover, the Autonomous Communities (17 in Spain) are competent to regulate land-based gambling and betting, including its advertising activities. So it seems quite complicated to coordinate these measures with all the regional gambling authorities.

 

The view from Brussels: advertising in support of safe and healthy market

Maarten Haijer, Secretary General of the European Gaming and Betting Association (EGBA)

EGBA welcomes policy measures which genuinely strengthen consumer protection in Spain’s online gambling market but reiterates that such measures should be balanced, proportionate and designed in such a way that they support rather than undermine the regulated market.

In the past, we have seen, in various jurisdictions, the introduction of well-meaning consumer protection measures which had an actual counterproductive effect because they pushed online players towards unregulated, off-shore websites which exposes them to dangerous practices and a lack of legal recourse when their consumer rights and protections are being trampled on.

The Spanish government should pay attention to this risk and ensure that new measures which might be considered are mindful of the need to ensure a high participation rate of players in the Spanish regulated market, rather than the offshore market.

This is true particularly in respect to advertising, which is a vital instrument to direct players to the gaming and betting websites which are licensed and regulated Spain – and away from risky websites.

As far as we are aware, there is no research or studies that conclude that the volume of advertising for gambling impacts the risk of problem gambling.  At the same time, EGBA obviously recognizes the need to ensure that advertising is responsible and helps protect vulnerable consumers and minors.

Gambling advertising does play an important role in informing consumers of which websites are regulated and licensed in Spain, and where they can play in a safe and regulate environment that takes into account their need to be protected. In most EU countries, advertising is also required to provide information about the risks of gambling and where and how consumers can obtain help if they need it.

While we recognize that advertising can be seen to be excessive by regulators or public opinion, a certain level of advertising is required to ensure that consumers remain within the regulated online environment.