Today, the Spanish government has published its long-awaited draft Royal Decree on gambling advertising.

The full document is available for download here.

 

Royal Decree aims to place broad limits on consumer exposure to gambling advertising

The stated goal of the Royal Decree is the prevention of gambling addiction, the protection of minors, and consumer protection in general. The new Decree seeks to achieve this goal by significantly reducing the public’s exposure to gambling promotions.

According to Alberto Garzón, Minister of Consumer Affairs, the new advertising rules will be strictest in the EU; and 80% of current advertising would be illegal under the new regulations.

New rules not as draconian as feared

Despite Garzón’s claims, the new regulations – while considerably stricter than the previous rules – are not as draconian as many initially feared.

“Italy is a mirror in which companies operating in Spain do not want to be reflected. I am therefore glad to see that the Ministry of Consumer Affairs has acknowledged both the success of the DGOJ’s ongoing efforts to promote responsibility and the fact that a total gambling advertising would not be practical. Even so, the new rules are much stricter than the existing ones; and they will certainly have a negative impact on the market,” said Carlos Pombo, Partner at Asensi Abogados.

“The regulations introduce many new restrictions. This is clearly not good news for operators. However, the new rules are not as strict as initially feared. Operators will have to learn how to market their services within the confines of this new framework. There are still many actions operators may undertake to promote their offering and to acquire new players,” Xavi Muñoz Bellvehí, Partner at ECIJA, added.

However, Pedro López, Partner at MartínAndino Abogados, warned that additional restrictions are not yet completely off the table:

“Due to previous announcements suggesting the possibility of a full blanket ban, we now regard this draft with some relief, as it still leaves a certain room for marketing activities. The truth is, however, that the sector is going to face very important restrictions; and these are going to be particularly harmful for those operators who obtained their licenses in 2019.   Still, it is important to bear in mind that this document is an initial draft and therefore we must hope that the Ministry of Consumer Affairs does not give in to pressure from certain political sectors and does not make the document even more restrictive.”

Advertising restrictions

As announced earlier, gambling ads on radio, television and online video platforms will be limited to a four-hour window between 01:00 and 05:00.

However, betting operators will still be allowed to run ads during live broadcasts taking place after 20:00. These ads may not refer to bonuses or contain direct inducements to bet, such as “play now.” No information on live odds can be shared in these ads.

Sponsorship of sports teams will still be permitted, although gambling branding on youth shirts will be banned. Operators may not enter into naming rights deals with stadiums or other entertainment venues. In-stadium advertising will not be permitted.

Advertising on billboards and bus stops will be subject to approval by the autonomous communities.

Social media ads are restricted to portals that have an age filtering solution in order to prevent minors from being targeted. For every four standard ads, one responsible gambling ad must be shown.

Gambling ads may not feature famous individuals or celebrities, or actors who may be mistaken for minors.

Bonuses and related promotional offers will be capped at €100.

All ads must contain the 18+ age restriction, as well as responsible gambling messaging.

Consumer protection & social responsibility

All licensed operators must develop a comprehensive social responsibility policy. Consumers must be adequately informed regarding win chances, costs, and risks, as well as (self) exclusion, parental controls, and deposit limits.

Operators must also establish mechanisms and protocols to objectively detect risky behavior among their registered users, as well as a telephone helpline to help inform their customers.

Next steps

The draft Royal Decree is subject to a public consultation that concludes March 16. Following the public consultation, the new measures will have to be approved by parliament.

Implementation is currently scheduled for June 2020.

Industry reactions

Unsurprisingly, trade association Jdigital did not welcome the government’s proposals, believing the announced restrictions to be unnecessarily severe:

“Jdigital advocates for sensible regulation of online gambling advertising, but we do not   agree with its ban. The measures proposed in the draft Royal Decree are very severe for a sector that engages in a completely legal and fully regulated activity. While the Ministry’s proposal does not totally prohibit the promotion of gambling services, the truth is that it   leaves the sector very little space to do so. Given this situation, we hope that the limited opportunities that remain will be sufficient to prevent the occurrence of unwanted effects, such as players moving to illegal and unregulated alternatives.”

Others, such as Eduardo Morales Hermo of leading gambling consultancy firm Ficom Leisure, believe that a fundamental rethink of the regulatory approach taken by the current government is warranted:

“Gambling is not creating a public health crisis. Problem gambling rates have, in fact, not increased during the seven years since online gambling has been regulated. The reality is that online gaming operators do not produce advertisements that link gambling with personal or economic success, much less encourage minors to gamble. I believe there is still time to properly reflect what measures are needed to improve gambling regulation in Spain.”

 

This week: ECIJA seminar on M&A for online gambling operators

Later this week, on Thursday, February 27, law firm ECIJA will organize a one-day seminar in Madrid on “Comprehensive compliance and conducting M&A in Spain’s online gaming sector.”

Since a new licensing window is not expected any time soon and gaming licenses are non-transferable, online gambling licenses can only be acquired (or sold) within the framework of an M&A transaction. Therefore, any company wishing to enter the Spanish gaming market can only obtain a Spanish iGaming license by acquiring an already licensed operator. Conversely, any operator wishing to sell all or part of his business should prepare for dealing with prospective new market entrants.

Xavi Muñoz, Partner at ECIJA, Mikel López de Torre, President of trade association Jdigital, and Willem van Oort, founder of Gaming in Spain, will present their visions on the expected consolidation in the Spanish online gaming market and its implications for regulatory obligations and compliance.