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Spain readies for Online Gambling

Posted on December 19th, 2010

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Of all the countries in the world, Australia is the first to legalize regulated online gambling; Then came Italy which banned all forms of online gaming first then legalized it. United Kingdom was hot on Italy’s heels implementing The Online Gambling Act of 2005 which gave permission to residents to gamble online. The Act passed mainly applies to Scotland, Wales and England. It aims to regulate gambling in whatever size, kind and form. Since then, a number of countries have already opened up to regulating this lucrative industry. Spain now contemplates legalizing and regulating online gambling in their country. According to estimates, Spaniards have already spent 22.68 Billion Euros in gambling, but the numbers may very well double if online gambling revenues are included in the tally. Spaniards are known for their inclination towards gambling—ranking in at third, behind the United States and the Philippines. Some studies have shown that Spaniards are more likely to spend for gambling compared to insurance..

Gambling is legal in Spain for citizens aged 18 and above. A Vegas-like gambling zone is set to be developed in the dessert regions between Barcelona and Madrid. Currently, there are less than 40 casinos in Spain. The Vegas-inspired Spanish strip is called the “Gran Escala” or “A Grand Scale. According to plans, it will have thirty two hotel-casinos, a golf course and a stadium.

The final draft of the bill to legalize and regulate online gambling is good to go and is to be taken to the Spanish Parliament, Las Cortes Generales, by early 2011. But some online gambling trade associations are apprehensive of the bill, saying that a mass consultation should be held if the bill is to affect the public. The apprehension by the operators stems from high e-gambling taxes in France. The French decided to legalize e-gambling just April 6 of this year. Also, Danish law has proposed that land based casino operators in Denmark pay 41% and 20% on online gambling. These rates prompted the operators to take matters to the European Commission. Spaniards do not want the same problems to occur in their shores. As an act of good faith, e-gambling will be taxed according to the GGR or gross gaming revenue. Gross gaming revenue is all of the players’ contribution to the game, while online sports betting will be taxed according to the turn over. This is seen by experts to bring consistency to the Spanish Gambling industry.

The Spanish Association of Online Gamblers or Asociación Española de Apostadores por Internet (AEDAPI) says that it is a counterproductive measure. “AEDAPI estimates that more than €100 million in sponsorship and advertising revenue is currently invested each year by the major European sports betting operators in Spain, and this is at risk under this proposal.” says its secretary, Agustin Torres. Spanish regional and federal governments will meet for the final draft of the bill regulating online gambling. Spain has obviously decided that the benefits to be gained in legalizing online gambling far outweighs its cons. Online gaming licenses, once issued, are good for five years; These licenses are renewable if strict conditions will be met.

Italy has issued 17000 licenses already since it legalized e-gambling in January of 2007, even foreign online gambling sites got licenses—William Hill and Ladbrokes were just a few. But the sentiments of locals toward online gambling may be different; Gambling has always been associated with the mafia and so gambling in any form has been strongly opposed and frowned upon by most Italians.

Meanwhile in Spain, The European Gambling and Betting Association (EGBA) and the Remote Gaming Association (RGA) support the AEDAPI. But the uncompetitive nature of the licensed market may still drive patrons to unregulated operators. It has been observed that prior to the World Cup, France has regulated online sports betting, which has not resulted very well for operators and gamblers alike. EGBA and RGA have expressed its willingness to help if Spain decides to do a poll on the public’s opinion. Spain is even dubbed as The Golden Land of Online Gambling as reports by Research and Markets say that total turnover may reach 4.2 Billion.