Spain Online Gambling Bill Clears First Post

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The Spanish government has been for some time working on the regulation of online gambling at the national level. Certain provinces of Spain have also been seeking to independently implement regulation at a regional level. The national effort has just cleared the first major hurdle. The Council of Ministers has approved the draft bill on new online gambling regulations.

The bill will regulate online gambling across a number of product lines such as casino games, poker and sports betting. It will define the various activities being regulated and specify the requirements to be met for each. A notable exception to the product lines is lottery. The bill when enacted will create a regulatory body within the State Administration Services, which has been designated as Comision del Juego or the Spanish Gaming Commission. This commission will be responsible for issuing of licenses and monitoring operator compliance. One of the key functions of the Spanish Gaming Commission will be granting prior permission for advertising, promotional and sponsorship activities carried out by the licensed operators. Violations of the act, including operating online gambling services without a license, will be subject to heavy fines ranging from €100,000 to €50,000,000.

Last month when it was revealed that the Spanish government wants to tax sports betting on turnover instead of profit there was a hue and cry raised by the industry and its representatives. It is not known which taxation method has been adopted for the different online gaming products in the bill that has just been passed. However it has been confirmed that all revenue collected will be given to the autonomous regions.

The First Vice-President of the Government confirmed that online gaming is undertaken regularly in Spain and is not currently subject to tax. The Spanish Association of Internet Bettors (AEDAPI) released a report last week estimating just how much the online gaming industry is worth. AEDAPI worked out an estimated profit of €315 million in 2010, which was 19% more than the profit in 2009. The product wise break up of online gaming was as follows. Online sports betting showed a 21% increase over 2009, online poker showed a 26% increase and the other products combined showed a 14% increase. AEDAPI estimates that the online gambling sector had over 370,000 active users in 2010, a growth of 33% from the 2009 numbers.

The Spanish government has expressed its commitment to submitting the bill to Parliament within the next few weeks. After passing through Parliament, the bill will progress to the Senate and then to the European Commission (EC). Industry experts expect the bill to reach the EC sometime around July 2011.

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