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Gaming in Spain Newsletter – Experts comment on Spanish proposals for tough gambling advertising rules

Following a budget deal between the current minority PSOE government and opposition party Podemos, gambling operators in Spain could soon face severe advertising restrictions “similar to those placed on tobacco.”

What will this mean for the industry? What else is in the budget deal? How likely is it that the proposed measures will actually be implemented? Read on to find out!

The budget deal

The new budget’s section on gambling (pp. 42-43) states that the proliferation of online gambling and aggressive advertising by online operators has caused “serious problems” with regard to pathological gambling behavior and gambling addiction.

In order to counter this development, the Spanish government and Podemos seek to introduce four distinct measures.

First, it is proposed that gambling advertising will be restricted in a similar manner as the advertising of tobacco products. Currently, tobacco brands are prohibited from offering sponsorships and, with a few exceptions, to advertise in Spanish media.

Second, the Spanish regulator will be asked to investigate whether additional preventive measures to increase players’ awareness of their gambling behavior can be added to the existing regulatory framework.

Third, operators must take a greater share of responsibility with regard to combating and repairing the negative social effects of gambling.

Fourth, a portion of the administrative fees paid by online operators will be reallocated to fund prevention and responsible gaming initiatives.

 

Industry reactions

In particular, the proposed restrictions on gambling advertising have not been welcomed by the Spanish gaming industry.

“We see a prohibition of or excessive limitations on advertising as a step back that will negatively impact licensed operators compared to black market operators. At present, advertising is the only weapon available to licensed operators against their unlicensed competitors,” Mikel López de Torre, President of online trade association Jdigital told La Vanguardia.

Alejandro Landaluce, Director-General of the CeJuego industry association, said that although the sector is not opposed to advertising regulation, it would be unfair to equate gambling advertising with the marketing of tobacco products.

Landaluce added that any new gambling advertising restrictions must be applied fairly and thus also apply to state-run lotteries and betting pools.

Maarten Haijer, Secretary General of the European Gaming and Betting Association (EGBA), acknowledges that gambling advertising can be excessive or misdirected, but also stresses the crucial importance of advertising for steering consumers toward licensed operators:

“Problem gambling is a legitimate public health concern – particularly for those gamblers and their families who are affected by it – and all stakeholders must work more closely together to tackle it.

It is important to recall that consumer protection was the single most important reason to introduce online gambling regulation in Spain. Online gambling was legalized with the explicit goal of creating a safe, reliable, and regulated environment for Spanish consumers to       play in. Advertising is an essential part of such an environment: it informs players which websites are licensed, regulated and subject to regulatory oversight by Spanish authorities. Without advertising, players will no longer be directed toward regulated offerings, which will result in lower levels of consumer protection and increasing risks of problem gambling.

Of course, that doesn’t mean that any and all advertising is good or acceptable. Despite the importance of advertising, legitimate concerns do exist about the content of gambling advertising and whether it is encouraging problematic gambling behavior. That is why EGBA supports measures that ensure advertising is responsible and informative, and does not entice problem gamblers or young people to gamble.”

 

Legal and political roadblocks

Although the introduction of a near prohibition of gambling advertising would have a significant impact on Spain’s (online) gaming market, there are still several major political and legal roadblocks ahead for the government’s proposal, local experts told Gaming in Spain.

Santiago Asensi, Managing Partner at Asensi Abogados:

“At this stage, it is too early to tell what exactly is going to happen and how the current declaration that gambling advertising should be regulated similar to tobacco products is going to be developed.

Over the last three years, the Spanish regulator has been working on an advertising bill, which – due to changing political circumstances – has not yet been approved. Said bill places additional restrictions on the current gambling advertising rules in Spain, but can still be considered a well-balanced regulatory tool in terms of protecting consumers as well as providing good advertising opportunities to the industry.

From a political perspective, the manner in which the recent declaration is going to be implemented remains uncertain. It is not clear, for instance, how long the current government will remain in power. In case the current government does manage to stay on, it        is, as of yet, uncertain how exactly the declaration will be incorporated in the advertising bill   proposed by the regulator.

Thus, I would say that the next two to three months are crucial in order to see how this issue is going to be resolved.”

Pedro López Martín-Andino, Managing Partner at MartínAndino Abogados:

“It is important to bear in mind that there is still a very long and complicated path to follow before the Spanish Budget Act for 2019 is finally approved. PSOE and Podemos still need to seek support from several nationalist political groups. Also, the Partido Popular still has majority in the Senate. Additionally, the political situation is very unstable. Thus, the definitive approval of the Budget Act looks uncertain.

To further complicate matters, the current Spanish Gaming Act states that the regulation of marketing and advertising activities related to online gaming must occur through a regulatory decision (i.e. a Royal Decree). For reasons of transparency, the procedure for the approval of a Royal Decree requires that a public consultation is opened, in order to hear from relevant stakeholders.

Thus, if the current government decides to include these new advertising restrictions directly in the Spanish Budget Act, they will be ignoring the procedure set forth in the Spanish Gaming Act, as well as the voice of the industry. It would be sad news indeed for those who defend legal certainty and a stable framework for doing business in Spain.

Last but not least, the regulation on the advertising of tobacco products in Spain follows the applicable EU Directives on this matter. Trying to equate tobacco advertising with advertising activities in a completely different sector, such as online gaming, seems to be            disproportionate, unfair and insufficiently thought through.”

 

Learn more at the upcoming Gaming in Spain Conference

To learn more of the Spanish government’s budget proposal, its implications and potential consequences, visit the 2018 Gaming in Spain Conference, as the newly proposed advertising restrictions will be a major topic at the conference.

The 2018 GiS Conference will feature:

  • local regulators: Juan Espinosa García, Director General de Regulación del Juego, Ministerio de Hacienda y Función Pública; Guillermo Olagüe Sánchez, Subdirector General de Regulación del Juego, DGOJ
  • legal experts: Santiago Asensi, Managing Partner at Asensi Abogados; Pedro López Martín-Andino, Managing Partner at MartínAndino Abogados
  • national and international industry representatives: Mikel López de Torre, President of Jdigital; Maarten Haijer, Secretary General of EGBA
  • and many more!

This 2018 Gaming in Spain Conference will take place November 7-8, 2018, at Wanda Metropolitano, Madrid, home stadium of Atlético Madrid FC and host venue of the 2019 UEFA Champions League Final.

Register now!

Gaming in Spain Newsletter – Podemos seeks to impose restrictions on bookmakers, betting advertising …and more!

Gaming in Spain Newsletter – Podemos seeks to impose restrictions on bookmakers, betting advertising …and more!

Spanish regulators meet with industry at Gaming in Spain Conference

Meet with Spanish regulators

Just a bit over a month ahead of the closing of the current licensing window on December 17, attendees of the Gaming in Spain Conference will have one last opportunity to hear from and meet with local regulators.

Juan Espinosa García, Director General de Regulación del Juego, Ministerio de Hacienda y Función Pública, and Guillermo Olagüe Sánchez, Subdirector General de Regulación del Juego, DGOJ, will both address the expected impact of the third licensing window on Spain’s online market, as well as the country’s current regulatory outlook.

Don’t miss it. Register now!

Other speakers & key conference topics

Other confirmed speakers include:

  • Mikel López de Torre, President of Jdigital and Digital Director at Sportium
  • Santiago Asensi, Managing Partner at Asensi Abogados
  • Pedro López Martín-Andino, Managing Partner at MartínAndino Abogado
  • Pedro Fernández, Socio at Garrigues
  • Aurora Merino Salas, CEO of Asensi Technologies

Key conference topics are:

  • Market growth: organic growth and onboarding of gray market traffic
  • Tax reduction: now confirmed at 20% of GGR
  • Ceuta and Melilla: a reduced gambling tax rate for resident companies
  • New suppliers and new products (B2B and B2C)
  • Responsible Gaming awareness

New sponsors announced

We are proud to announce that several new strategic partners and sponsors have signed up to support the 2018 Gaming in Spain Conference.

We are extremely pleased that Betradar, leading supplier of sports betting data, Optima, provider of innovative gaming and betting software, as well as online trade association Jdigital have agreed to become strategic partners of the Gaming in Spain Conference.

We would also like to extend our thanks to our other sponsors: Asensi Abogados, BetConstruct, Betgenius, Ezugi, GameArt, Leaseweb, Microgaming, Mindway AI, Pentasia, R. Franco Digital, and Yggdrasil.

When & where

The fourth Gaming in Spain Conference will be held November 7-8, 2018 at Wanda Metropolitano, Madrid, the home stadium of Atlético Madrid FC and host venue of the 2019 UEFA Champions League Final.

Click here to register.

 

Gaming in Spain website now live

The Gaming in Spain website, containing regular news updates, guest blogs, and our monthly newsletter, is now live! Check it out here.

 

Spain to overhaul problem gambling approach

The Spanish Drug Addiction Council (Consejo Español de Drogodependencias) has introduced gambling harm as an issue to be addressed in the country’s Action Plan on Addictions 2018 – 2020 (Plan de Acción sobre Adicciones 2018 – 2020).

The involvement of Spain’s Drug Addiction Council in drafting problem gambling policy follows the decision of last February by the Council of Ministers to reclassify gambling-related harm as a “drug addiction without substance.”

The Council of Ministers has requested that the Drug Addiction Council rewrite Spain’s National Addiction Strategy 2017 – 2024 (of which the Action Plan on Addictions 2018 – 2020 is a part) to include problem gambling behavior.

Yesterday, the new strategy also gained approval from the Sectoral Conference on Drugs (Conferencia Sectorial sobre Drogas), a political decision-making body made up of members of various offices of Spain’s central government.

More than a billion euros is available until 2024 to implement Spain’s National Addiction Strategy.

 

Guest blog by Santiago Asensi on regulatory pressure in relation to blurred lines between gaming and gambling

Spanish gaming lawyer Santiago Asensi has written a commentary on the recent declaration by sixteen international gambling regulators (including the DGOJ) on the blurring of lines between gaming and gambling.

According to Asensi, the declaration illustrates that it is increasingly crucial for regulators to establish firm lines that help define gambling products and distinguish these from non-gambling products.

The full article is available here.

 

Artificial intelligence predicts problematic gambling behavior

Mindway, winner of Gaming in Holland’s Responsibility in Gaming Award for Industry Innovation of the Year 2018, has developed a method based on artificial intelligence (AI), that is able to evaluate online gambling behavior and to successfully predict the need for self-exclusion, limit setting, or other responsible gaming measures.

Mindway’s AI furthermore generates targeted and individualized conversation guides that can be used in reaching out to customers, either online or by helpline staff.

 

Spain provides large talent pool to iGaming entrepreneurs

Giuliano Lafirenza of leading iGaming Recruitment agency Pentasia provides an update on the Spanish gaming talent market:

“Gaming operators and suppliers hiring in Spain generally find a good range of strong candidates, sourced either within the region or further afield […] Barcelona and Madrid remain the top locations for gaming operations, and talent is clustered around these areas. […]

Challenges come in the form of the sector’s own expansion – through new licenses – and closely related industries – such as ecommerce, fintech, payments – which will undoubtedly increase competition for talent. The growth of Spain’s overall tech sector is clearly good for gaming, but employers will need to remain aware of new jobs which may appeal to             valuable staff.”

 

Upcoming events

The following events may be of interest to members of the Gaming in Spain community.

  • The Responsible Marketing For Gambling Operators Conference, which focuses on the changing regulatory landscapearound promotions, will take place on October 3, 2018, in London.
  • On October 16, Kindred Group will host the Sustainable Gambling Conferencein Stockholm, Sweden. The conference aims to highlight different perspectives on sustainable gamblingby bringing together stakeholders from the industry, academia, and regulators.
  • The Lisbon Affiliate Conferencewill take place on 17-20 October 2018and is expected to bring together the key stakeholders in the iGaming affiliate industry.
  • Clarion Gaming has launchedICE Sports Betting USA, a two-day event to be held in New York on 27 and 28 November, 2018.

 

Podemos seeks to impose restrictions on bookmakers, betting advertising

Political group Podemos has requested that the Spanish government introduce additional restrictions on bookmakers, including a higher level of taxation and a complete ban on sports betting advertising.

More traditional forms of gambling, such as the football pools and lotteries, would be exempt from these new restrictions.

A complete ban on sports betting advertising would cost the media an estimated €133m annually.

Juan Espinosa García, Director General de Regulación del Juego at the Ministry of the Treasury, spoke up in defense of the sector, claiming that regulated remote gaming offers an opportunity to identity and address problematic gambling behavior.

“Podemos’ proposal shows how much work we have ahead of us to communicate the reality of the regulated gambling sector to the general public and political stakeholders,” Mikel López de Torre, President of Jdigital added.

Podemos’ calls for new betting restrictions will also be an important topic at the upcoming Gaming in Spain Conference. Book your place here.

 

Other news

Sportium, the Spanish market joint venture of Grupo Cirsa and Ladbrokes, has announced that it has reached a milestone 3,000 active betting points within Spain.

 

Publishing its latest corporate update, Cirsa reports a 3.2% increase in group revenues to €359 million for Q2 2018.

 

Three Codere directors, including the company’s founders, refused to sign off the company’s H1 financial results in another flare up of its boardroom war.

 

Mikel López de Torre, Director of Digital Services at Sportium, was reelected as Chairman of trade association Jdigital.

 

Betsson’s Spanish brand has launched a new loyalty program that enables users to accumulate points that can be exchanged for bonuses.

 

Online betting and gaming operator Tempobet hasrenewed its agreement with Spanish football giants Real Madrid and Barcelona to advertise at both clubs’ away league fixtures throughout the 2018/19 La Liga season.

 

Russian bookmaker Fonbet has become an official partner for Spain’s La Liga on a three year deal.

 

Real Madrid and ManBetx have signed an agreement to make the company the club’s new regional betting partner across the majority of Asia.

 

Operator Wanabet has signed up to become the official betting partner of basketball team Movistar Estudiantes.

 

Following a deal between Sportium and France’s Pari Mutuel Urbain (PMU), Spanish horse racing fans are henceforth able to bet on French races.

 

Formula One has announced a sponsorship and data rights deal with sports marketing company Interregional Sports Group (ISG) that it said will enable the development of live in-play betting at Grand Prix.

 

Colombia’s gambling regulator issued its 13th and 14th online gaming licenses to Alfabet SAS and Teclino SAS, while the country’s 15th online gambling license was awarded to local subsidiary of Meridian Gaming.

 

Peruvian legislators have put forward a bill that would legalize online betting and gaming in the country.

 

Gaming in Spain Newsletter – Reduction in remote gaming duty brings new opportunities, experts say …and more!

Gaming in Spain Newsletter – Reduction in remote gaming duty brings new opportunities, experts say …and more!

Welcome to the very first Gaming in Spain monthly newsletter. Our goal is to keep you updated on the latest developments in the Spanish gaming sector, with a particular focus on the rapidly maturing online market.

We hope you find our newsletter useful. If you have any questions or would simply like to get in touch, please email me at willem@vanoort.com.

 

Reduction in remote gaming duty brings new opportunities, experts say

In late June, the Spanish parliament adopted the government’s budget bill for 2018, which came into force on July 1. One of the bill’s provisions was the reduction of the most common remote gaming tax rate from 25% to 20% of GGR.

The rates for pool betting, exchange betting, raffles, and contests, which were calculated on different bases, are now harmonized with the main gaming duty of 20% of GGR. The tax rate for state-organized sports pool betting will remain at 22% of the total amount wagered.

For businesses “fiscally and factually based” in the enclaves of Ceuta and Melilla, the main remote gaming duty of 20% will be slashed by a further 50% to a mere 10% of GGR.

The bill explicitly stated that the change in gaming duty was made to convince unlicensed operators to “carry out their activities in the legal market.”

At present, over 30% of online casino wagers are being made with operators that are not licensed to operate in the Spanish market. From a player channelization perspective, the situation is even less favorable in the bingo vertical: almost 50% all Spanish online bingo revenue is currently being generated by unlicensed operators, figures compiled by H2 Gambling Capital show.

Unsurprisingly, industry insiders reacted favorably to the gaming tax rate reduction.

For instance, Owen Tustin, VP Gaming, Relationship Management at emerchantpay, believes that firms facing increased taxation or regulatory pressure should consider expanding into new international markets, including Spain:

“Operators looking to target a new market with huge potential for growth could do a lot worse than consider Spain. […] Recent figures showed 14.5% year-on-year growth in sports betting, and a staggering 51% increase in casino and 42% growth in poker. The launch of a shared liquidity network with France will surely see the poker vertical grow further still.”

Regulus Partners, a London-based consultancy firm focused on international gambling, considers the tax rate reduction a rare opportunity that is not to be squandered:

“The change will save operators c. €30m pa, which is not insignificant in a small crowded market dominated by a few large operators. If this windfall is recycled into better product, high-return marketing, innovation and harm minimisation then both the market and the government’s tax yield will sustainably grow – giving the remote sector a much-needed   positive model to point to.

If on the other hand the tax cut is split between more aggressive advertising and higher offshore profit margins, then the government is likely to revisit both the rate and the regulatory framework. The Spanish government has given its remote gambling sector a clear short-term positive; it is up to the sector to learn lessons from elsewhere and turn it into a long-term success story.”

 

The Spanish online market – a brief overview

Currently, 42 licensed operators are active in the Spanish online market, 40 of which offer casino games, 28 offer sports betting, and 8 offer poker.

GGR was €163m in Q1 2018, up 34% compared to the same period in the previous year.

Despite this impressive growth rate, further gains are expected, as the Spanish gambling market has not yet made good its losses suffered in the wake of the recent financial crisis. At present, combined online and land-based revenues are still 24% lower than ten years ago, according to Alejandro Landaluce, director of Cejuego.

The Spanish online sector appears to be particularly well-positioned to take advantage of the remaining market slack. Total e-commerce turnover in Spain increased by an impressive 28.1% year-on-year in Q4 2017, with gaming and betting taking up the top spot in number of transactions.

 

Spanish government considering revision of online sports betting regulation

Earlier this month, Minister of Culture and Sports José Guirao said that the government is considering a revision of online sports betting regulation.

The strong growth, in recent years, of online betting has increased concerns over problem gambling. Additionally, competition from online operators is seen as a major contributory factor in the decline of the performance of state-owned betting pools (quinelas), causing shortfalls in the funding of Spanish sports.

Spanish sports federation ADESP, through its president José Hidalgo, is therefore proposing that licensed betting online operators should help fund Spanish sports, for instance through a 1% duty on online betting turnover.

 

Spanish State Lotteries (SELAE) to “progressively abandon” paper tickets

President of the Sociedad Estatal Loterías y Apuestas del Estado (SELAE) Inmaculada García Martínez revealed that the state-owned operator intends to progressively abandon the sale of paper lottery tickets in favor of online play.

SELAE’s new app “LoteríasPRO,” based on a “mixture of tradition and innovation,” is an important step in that direction, said García Martínez

“This app represents the next step in the natural evolution of the way we interact with our customers; and offers added value by allowing them to participate in the draw from their mobile phones.”

 

Canadian investment group now looking to Andalusia to build “Eurovegas”

The Canadian investment group TripleFive has abandoned plans to build a gaming and leisure complex in the Extremadura and is now eyeing locations in the vicinity of Malaga and Cádiz instead.

“The business has to be profitable, something that is not possible in Castilblanco. It was not the right place,” said Paul Watson, head of TripleFive Europe, adding that he was hoping to invest as much as €3.4bn in the project.

 

Other News

Spanish regulator DGOJ is expected to finalize its draft legislation concerning gambling advertising later this year.

 

Internal squabbling at gaming operator Codere resulted in it pulling funding for its non-profit Codere Foundation.

 

Trade association JDigital condemned the looming ban on sports betting advertising in Italy.

 

Yggdrasil Gaming’s content and platform have been certified to launch in Spain.

 

Winamax has become the third operator to launch a combined French-Spanish online poker network.

 

Marathonbet signed a multi-year contract to become the new main sponsor of La Liga side Girona FC.

 

888poker has announced the signing of Spanish-born Ana Marquez to help grow the operator’s segregated online poker room in Spain.

 

Wanabet has added Draw Poker to its online game offering.

 

CalvinAyre offers a two-part video recap (1, 2) of the World Executive Gaming Summit, which took place earlier this month in Barcelona.

 

Barcelona footballer Gerard Piqué has closed down his social video game business that operated under the name Kerad Games.