New I-gaming licenses for Spain: who’s in?

Quite a few news services are reporting that Spanish authorities have issued the first round of online gambling licenses pursuant to its new laws passed last year…Spanish Gambling Act (Ley 13/2011 de Regulación del Juego).

In actual fact this is the second round. Local operator Casino Gran Madrid were awarded their license last year, but there’s no doubt round 2 is far more significant because it marks the entrance of all the big name non-local operators.

59 license applications were received by Spain’s National Gambling Commission and from Friday last week applicants were being told by the General Directorate of Gambling (“Dirección General de Ordenación del Juego”), which is part of the Economy and Treasury Ministry whether they were successful or not.

The full list won’t be released until later this week but a few operators have already announced they now have a license (PokerStars, William Hill, Jaxx Ag).  There are also a few who we already knew would be getting a license following the news they had negotiated back-tax settlements (888, Sportingbet, Betfair, Bwin.Party). Around 70 million euros in back taxes have been handed over to the Treasury Ministry by operators who were actively marketing their product in Spain in the pre-license era – and we’re not talking subtle marketing here…Bwin.Party have been Real Madrid shirt sponsors for some time now!

The  Ley 13/2011 de Regulación del Juego puts no limit on the number of general licenses that can be granted…and given the widely acknowledged fact that this is a cash grab by a government in dire need of raising money from where ever it can, it’s likely there will be few rejections – Pokerstars’ approval despite a very colorful 12 months is testimony to this.

In the coming year Spain’s Treasury is hoping to raise €800 million from taxes of up to 25% (depending on gambling category) of gross gaming revenues, translating to an expected €3 billion in licensed net gaming.

What now?

In coming months we’re going to see all the big operators open their dot.es gambling sites served from the required Unidad Central de Juegos (Gambling Central Unit – ie local local game server)…much like the dot.it roll out that has been happening in Italy over the last 12 months.

Are live games included?

The law is pretty vague on the exact type of casino games that will be allowed.  Permitted forms of betting are listed as:

• fixed odds or betting exchange;
• betting on horse racing by pool or fixed odds;
• other types of betting by pool, fixed odds or betting exchange;
• raffles, competitions and random combination games; and
• other games

Poker and roulette are named as examples of ‘other games’…so it would be fair to assume all casino games are in…remembering the primary goal here is to raise cash. It follows from this that live casino games should be A-OK, so expect to see the likes of Evolution Gaming and Playtech enlisting the services of a whole bunch of Spanish speaking dealers in coming months.

Want to know more about the new Spanish online gambling laws?

There’s a great summary written by Blanca Escribano and Ellen Martinez from the Spanish law firm Olswang Spain LLP.  The super condensed version goes something like this:

• The law was published in the Spanish Official Gazette  May 28 2011 & came into effect the following day.
• Stated aim of law is to ‘to harmonise the regulation of online gambling in Spain’ on a national basis.
• Allows licensed operators to offer online gambling services (see above) and advertise those services in Spain.
• Licenses to be granted by the National Gambling Commission:
  General license: required to enter market; term 10 years; no limit on number issued;
  Single license: required in respect of each category of game offered; term 1 to 5 yrs;
• Taxes: 10% to 25% of gross gaming revenue, depending on category;
• Regulated by (i) Treasury Ministry; (ii) National Gambling Commission; and (iii) Gambling Policy Council.

Nasty Surprises

The requirement to pay retrospective back taxes isn’t the only nasty surprise newly licensed operators have had to deal with.  Apparently on June 1 Treasury’s Dirección General de Ordenación del Juego ‘clarified’ that there would be a requirement for all new licensees to purge their Spanish customer base and begin with a clean slate (ie no Spanish players).  Aside from being a massive inconvenience to Spanish players, this throws up an enormous question mark as to what constitutes a purging. Somehow I just can’t see all these customer details being vaporized.