Kingdom of Spain is the second largest country in Western Europe and the European Union after France, and it is located on the Iberian Peninsula. There are more than 46 million residents in Spain.
Spain has long embraced land-based gambling operations, especially since its decriminalization in 1977, as the country hosts 20 casinos as well as one in Gibraltar. Studies have shown that Spaniards gamble more than €1.9 billion per year, a higher proportion of their income than any other country. The figure equates to approximately 15 percent of the average net household income.
The majority of Spain’s gambling is centered on the national lottery, Loteria Nacional. Lottery offices or street vendors can sell tickets, as well as specialized charitable organizations. The largest of its lotteries, El Gordo, is held near Christmas each year and sells 108 series of 66,000 tickets each, priced at €200 per ticket, and more than €1.7 billion is wagered annually.
Spain first passed Internet gaming regulation in 2006, which allowed sports betting in shops and retail stores, as well as over the Internet. Regional governments were allowed to implement regulations as they deemed appropriate, and Madrid was the first to compose and pass regulations and licensing conditions. The other 16 governments quickly followed.
The first sports betting shop opened in April 2008 in Madrid, and the number quickly grew to dozens hosted by the UK’s William Hill and Spain’s Codere as a joint venture called Victoria. Another license was granted to a partnership between Ladbrokes out of Britain and Cirsa based in Spain, while companies such as Intralot and bwin affiliated with Spanish companies to launch sports betting services as well.
Online gaming as it pertains to games of chance and skill was first seriously examined by the Sectorial Gaming Commission in 2010, at which point laws were drafted. At the same time, some of the 17 regional governments, also known as the Autonomous Regions, began drafting their own regulations. Catalonia and Madrid were two of the first to create commissions and set standards for license requirements. The latter saw its land-based Casino Gran Madrid awarded the first license to partner with Playtech for online gambling, though online poker, blackjack, roulette, and slot games were not allowed.
In February 2011, the Spanish Gambling Act, or Ley de Regulacion del Juego, was introduced as a legislative draft, and the Spanish Congress passed the law several months later when it was published in the Spanish State Gazette on May 28. The purpose of the law was to create a regulatory framework for the entire country for all forms of online gaming conducted electronically or remotely. Games included in the authorization included sports bets, horse racing bets, poker, bingo, blackjack, roulette, contests, fixed-odds bets, baccarat, and other soft games like traditional Spanish card games. The law was then amended in November 2011 to add two Royal Decrees regarding licensing and technical requirements.
As of February 2012, license applications were still being reviewed for more than 50 operators who beat the December 2011 deadline. In addition, there are numerous questions to be answered by regulators regarding player location verification and at what point non-licensed sites will be banned from the Spanish market. The process must also clear any concerns emanating from the European Commission, and that review could take several months.
General online gaming licenses will be issued for 10-year terms and renewed for 10-year periods of time. Individual licenses must be obtained for every type of game provided by the applying company.
Licenses will be granted to companies willing to house their servers in Spain and operate via a dot.es domain name. Those companies offering services to Spanish residents prior to January 1, 2012, were not sanctioned but must request a license in the transition period. However, infringements going forward could result in a file of €1 million to €50 million.
Gaming operators providing services to Spanish citizens will be taxed at a rate of 20 or 25 percent of all profits. Those serving Spanish customers prior to obtaining a gaming license will be required to pay the retroactive taxes for up to five years. Companies will be notified of the pertinent taxes by the Tax Agency upon completing an application for the National Gaming Board.
The tax is calculated per the type of gambling in question through a formula that includes the gross income received from gaming participation, net revenue, and commissions if applicable.
There is also a tax in the form of an administrative fee. If a taxable event includes a license application, registration in the General Gambling Licensing Registry, and acts of the National Gambling Commission, the tax rate ranges from €20 to €10,000 or 1/1000 of the annual gross income.