Online gambling in Spain is an emerging sector, with a 2018 survey indicating that roughly 6% of male participants and 1.2% of females have placed wagers over the Internet. Landbased gambling appears to enjoy significantly greater popularity as roughly 62% of the male respondents admitted to have gambled in brick-and-mortar venues during the same period as opposed to nearly 57% of female participants.
Nevertheless, the popularity of online gambling has been on the rise in Spain in recent years. Figures unveiled by the country’s Dirección General de Ordenación del Juego (General Directorate for the Regulation of Gambling) indicate the sector grew by 20.1% during the first quarter of 2019 compared to Q1 of the previous year, with locally authorized gambling operators generating €193.2 million in revenue.
With that said, the country’s gambling industry is projected to grow even further across the online vertical in the years to come. According to forecasts made by the renowned advisory and consultancy firm Ficom Leisure, the online gaming market in Spain is expected to reach anywhere between €1 billion and €1.5 billion by the year 2023.
Both landbased and online gambling activities are legal and rigorously overseen in the country, with the regulatory powers being distributed between the federal and regional authorities. State laws are applicable to online gaming operators since they can offer their services across regional borders. Regional landbased gaming facilities are subject to the oversight of individual regional regulatory bodies.
Landbased Gambling Regulations and Laws in Spain
Brick-and-mortar casino gambling is legal under valid licenses. This is a popular form of entertainment in the country, which has more than forty landbased casinos. Unlike the online gambling sector which is subject to a unified regulatory framework, landbased operators are tied to a physical location and therefore, fall within the supervision scope of the authorities of the respective autonomous region.
The country comprises 17 autonomous communities, or Comunidades Autonomas in Spanish. The legal forms of landbased gambling in Spain include casino gaming, poker, bingo, sports wagering, horse race betting, and lotteries. Following the fall of the fascist regime under General Franco, the country legalized most traditional forms of gambling.
The country’s newly formed government decriminalized these activities in the late 1970s with the passage of a Royal Decree referred to as Law 16/1977. It was signed into law by Juan Carlos I, King of Spain, on February 25, 1977, for the purpose of regulating game of chance, sports betting, and other forms of gambling in the country.
Online Gambling Legislation in Spain
Unlike landbased gambling, the online sector of the industry is regulated on a state level under a unified supervisory framework. The sector was legalized in 2011 following the passage of Law 13/2011. This piece of legislation also led to the establishment of DGOJ which has the remit to oversee and license all online gambling operations on Spanish soil.
The online gambling segment in Spain is regulated on a state level by the local Dirección General de Ordenación del Juego (DGOJ), which translates as the General Directorate for the Regulation of Gambling. The sector falls under a legal framework which came into force in 2011.
Said legislation is known as Law 13/2011 (also called the Spanish Gambling Act) and was officially introduced on May 27 of the same year. This piece of legislation was implemented following the approval of several other regulations. These include Royal Decree 1613/2011 which tackles the technical requirements licensed operators must cover and Royal Decree 1614/2011 that deals with licensing and authorization.
In general, Law 13/2011 regulates interactive activities like online casino gaming, online sports betting, raffles, pari-mutuel betting, lottery-style games, and wagering on horse races. Under Law 13/2011, all forms of unauthorized gambling are strictly forbidden.
3Article 6 of Law 13/2011
Article 6 of the legislation outlines several subjective and objective prohibitions. It states that gambling operators are disallowed from offering their services to underage individuals, persons who have been declared disabled by law, and people who have voluntarily self-excluded from such activities. Only individuals who are 18 years old or above can legally participate in online gambling.
4Article 8 of Law 13/2011
Article 8 of Law 13/2011 deals with players’ protection and the responsible gambling policies approved operators must follow. Locally licensed operators should pay due attention to people from risk groups and provide their customers with all the necessary information on responsible gambling. Under Spanish law, gambling operators are strictly prohibited from servicing customers with mental disabilities.
Spain’s Policies on Gambling-Related Ads
As for promoting online gaming activities, these fall under the general advertising rules outlined in Law 34/1988. Any gambling-related advertisements should display “play responsibly” messages to remind residents of the country to keep their gaming activities in check.
With that said, the Spanish Minister of Consumer Affairs, Alberto Garzon, plans to introduce several restrictive measures to rein in gaming-related advertisements in the country. The changes were proposed in February 2020 to combat the increasing gambling addiction among Spanish residents. The planned measures are extremely rigorous.
These include restrictions on televised gamblings ads by up to 80%, prohibiting operators from using celebrities to promote their products, and a ban on promotions that involve offering free-bet bonuses to new customers. The proposed amendments could restrict gambling ads on radio and television to a four-hour window, which starts from 1 AM.
Sponsorships will be allowed as long as the teams do not feature gambling logos on small-sized kits designed for children. Free-play is also under fire. The free demo versions of the casino games should use the same Random Number Generator as their real-money counterparts.
This is in response to the practice of some casinos where they use RNGs with higher win rates in the free-play versions of their games. Time will tell whether these changes in Spain’s gambling advertising policies will come into effect. Minister Garzon is yet to give a specific timeframe for their approval and implementation.
Deposit Limits, Cryptos, and Payment Security
Locally authorized gambling operators process the payments of Spanish residents in line with the security guidelines, set forth by the local regulator. Spanish players have the option to register their accounts in EUR, Spain’s official currency as of the beginning of 2002.
All accounts undergo obligatory identity verification and are protected with industry-standard SSL encryptions. Due to regulatory requirements, Spain-licensed casinos would automatically enforce the following limits on initial deposits: €600 for the day, €1,500 for the week, and €3,000 for the month.
Players have the option to upgrade their limits after verification. Customers can use cryptocurrencies like Bitcoin to process online casino payments but only on condition their gaming accounts have been nominated in the EUR currency.
Player Taxation and Penalization
There are no known cases of players being individually prosecuted by the Spanish government on charges of gambling at unauthorized offshore casinos. With that in mind, the local regulator DGOJ is bent on suppressing illegal gambling in the country.
Providing gambling services to Spain’s residents without holding a valid local license is considered a serious infringement under Spanish law. As such, it is subject to hefty fines that range from €1 million to €5 million. In addition to monetary penalties, the Spanish authorities also restrict the access to unauthorized online casinos and banking methods.
Spanish law requires casino fans from the country to declare their gambling-related earnings in their personal income tax return. Gambling losses are also deductible, with earnings being leveled at the maximum. As for online casino operators, they must pay the so-called Impuesto de Actividades de Juego (IAJ or Tax on Gambling Activities in English).
It amounts to 20% of their gross gaming revenue under Law 13/2011. The percentage is cut in half to 10% for gambling operators based in Melilla and Ceuta, both of which are autonomous territories located on the African northwest coast. These taxes are paid quarterly.
Spain Online Gambling Regulator
All forms of allowed online gambling in Spain fall within the remit of the Directorate Generale for the Regulation of Gambling (Dirección General de Ordenación del Juego or DGOJ), which oversees the sector on a state level. Integrated within the Ministry of Consumer Affairs, this entity is tasked with regulating interactive gaming activities as well as with the license issuance of approved operators.
To legally penetrate the Spanish market, operators are required to apply for and obtain a local license by the Directorate General. The latter issues two types of permits, general and singular.
The singular licenses cover several individual verticals including table games like blackjack, baccarat, and roulette, online slots, bingo games, poker, pooled sports betting, fixed-odds sports betting, exchange and horse race betting.
Licenses are granted to approved operators after a tender, which can be held either officially or at the request of the interested gambling companies. The approved operators are then added to the registry of the Spanish regulatory authority. Companies are approved only on condition they meet all technical requirements along with various conditions pertaining to fraud prevention and operational finance.
Another condition of the regulator stipulates that licenses are granted only to publicly limited or limited liability companies, registered within a member state of the European Economic Area (EEA). When entering the website of a licensed gaming operator, Spanish residents should be redirected to its .es domain.
Authorized operators should contribute a €38,000 fee for technical reports along with a registration fee of €2,500. Those looking to obtain general licenses for betting and casino games must have at least €100,000 in capital to request the permit. The candidates are approved or turned down within six months.
Only operators who have obtained general licenses can apply for singular (also called “specific”) licenses. Each general license expires after ten years but operators have the option of renewal. As for singular licenses, their validity ranges from one to five years. The exact timeframe depends on the type of product or game on offer.