Gaming Law 2019

Last Updated November 25, 2019

Spain

Law and Practice

Authors



Asensi Abogados is a boutique law firm specialised in the gaming and gambling sector. The firm represents and advises a large number of international gaming companies with interests located within the Spanish and Latin American market. The firm mainly works for online companies as well as for land-based operators, suppliers and manufacturers. Through winning the correspondent public tender convoked by Coljuegos, the Colombian gaming regulator, Asensi Abogados was the official adviser for the development of the first online regulation within the Latin American Region. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Jdigital Association.

The regulatory tendency in Spain is aimed at reinforcing the protection of players, public order, prevention of addictive behaviour, fraud and money laundering. There have been recent legislative developments in this regard, both at federal level and in the different autonomous regions that have competences over their land-based gambling as well as online gambling developed in the relevant region.

In this sense, the General Directorate for Gambling Regulation, the authority in charge of the regulation of online gambling at federal level, has recently approved, among others, a strengthened regime for the ID verification process of players, a guidance on the management of fraud and a new service for citizens and operators in order to control identity theft.

On the other hand, some of the regional authorities have already approved new ID controls at the entrance of gaming halls and have regulated the minimum distances between betting shops and gaming halls, and minimum distances between these premises and educational centres.

The most relevant expected sector development both at federal and regional level – although some autonomous regions have already approved their regime – is the regulation on advertising and responsible gambling, which is specially addressed to the online gambling sector.

There are no recent changes to be highlighted that have had an impact in the sector.

Betting, bingo and casino games are permitted and subject to licence both at federal and regional level.

Loterías y Apuestas del Estado (LAE) and the National Organisation of the Blind in Spain (ONCE) maintain the monopoly on lotteries offered at federal level. Only charitable organisations can organise lotteries. Therefore, this is a restricted product.

Fantasy sports can be offered at federal level if they fit under any of the single licences approved by the regulation. Depending on the autonomous region, they can also be offered at regional level and in both cases, they are subject to licence.

Social gaming is permitted, and these games are not subject to any licence, neither at federal nor regional level. Games of skill do not need a licence.

Poker is permitted and subject to licence both at federal and regional level.

Gambling regulation in Spain is divided between online gambling that is offered at federal level and land-based or online gambling that is offered within one specific region. Online games offered at federal level require a federal licence or authorisation and entitle the holder to operate online in the whole territory. However, land-based gambling or online games offered at regional level (in one specific or several regions) require the relevant licence or authorisation from the relevant autonomous region.

Therefore, online gambling in Spain is regulated both at federal and regional level, and the applicable regulation and gambling products legally approved depend on whether these are commercialised at national level or only at regional level in one or some specific autonomous regions in Spain.

Online gambling at national level is regulated by the Spanish Gambling Act (Ley 13/2011, de 27 de mayo, de regulación del Juego) and each gambling product has its own regulation approved by a Ministerial Order. If a game is not regulated or does not fit in any of the specific regulations in force, that game is not permitted.

The games that have been regulated so far and therefore are permitted to be offered at federal level are: pools on sports betting, fixed-odds sports betting, pools on horse racing, fixed-odds horse racing, other fixed-odds betting, exchange sports betting, exchange horse racing, other exchange betting games, contests, poker, bingo, roulette, complementary games, blackjack, baccarat and slots.

Land-based gambling and online gambling at regional level is regulated by each of the 17 autonomous regions in Spain. Instead of a specific regulation per type of game, each autonomous region approves a catalogue of games that are permitted and can be offered.

Notwithstanding that there are some minor differences between the regions, the gaming products approved and permitted are generally the following: roulette, blackjack, boule, trente et quarante (thirty and forty), craps, baccarat, poker, slots and other machine gaming, bingo, raffles, tombola or charity raffles, betting, sports betting, horse racing and wheel of fortune.

It is important to highlight that the various formats of gambling products approved and listed above might permit different modalities both at federal and regional level (for example, different modalities of blackjack, roulette, poker, etc).

Betting, poker, bingo, casinos and gaming machines are permitted and subject to licensing.

LAE and ONCE maintain the monopoly on lotteries offered at federal level and only some regions allow lottery operators.

As previously explained, land-based gambling (and online gambling at regional level) is regulated by each of the 17 autonomous regions in Spain and therefore each autonomous region has its own catalogue of games approved and permitted. There are certain differences among the regions; however, the gaming products permitted are generally the following: roulette, blackjack, boule, trente et quarante, craps, baccarat, poker, slots and other machine gaming, bingo, raffles, tombola or charity raffles, betting, sports betting, horse racing and wheel of fortune.

The key legislation for online gambling at federal level is:

  • the Spanish Gambling Act (Ley 13/2011, de 27 de mayo, de regulación del Juego);
  • secondary regulation on licences, authorisations and gaming registries (Real Decreto 1614/2011, de 14 de noviembre, por el que se desarrolla la Ley 13/2011, de 27 de mayo, de regulación del juego, en lo relativo a licencias, autorizaciones y registros del juego);
  • secondary regulation approving the technical requirements (Real Decreto 1613/2011, de 14 de noviembre, por el que se desarrolla la Ley 13/2011, de 27 de mayo, regulación del juego, en lo relativo a los requisitos técnicos de las actividades de juego);
  • resolutions of the General Directorate for Gambling Regulation; and
  • Ministerial Orders approving each type of game subject to single licence.

The key legislation for land-based and online gambling at regional level is approved by each of the 17 autonomous regions in Spain and therefore each autonomous region has its own Gambling Act and secondary regulations developing the Gambling Act.

The Gambling Act defines gambling as an activity where amounts of money or economically measurable objects are put at risk on uncertain and future events, dependent at least to some extent on chance and that allow these sums to be transferred between the participants, regardless of whether the level of skill of the players is decisive in the results or they depend wholly or fundamentally on luck or chance. The prizes can be in cash or in kind, depending on the type of game.

For clarification purposes, the definition contains three essential components, which are “chance”, “pay-to-play” and “prize”. If any of these elements is absent, the game will be outside the scope of gambling and the gambling regulation will not apply (for example, pure skill games will be excluded or prizes in virtual currency with no monetary value).

There is no specific nor separate definition for land-based gambling.

The Gambling Act defines online gambling as games performed through electronic channels, IT and interactive systems, when any device, equipment or system is employed to produce, store or transfer documents, data or information, including through any public or private communication network. The communication network can include television, the internet, landlines, mobile phones or any other interactive communication system, either in real time or recorded.

Given the regulatory distinction for the gambling sector in Spain, infractions and the related sanctioning regime are approved both by the Spanish Gambling Act and by each autonomous region with respect to its territory and competition.

In both cases, administrative infractions are divided into three groups: very serious, serious and minor. As a result of a compilation of the different regulations, the key offences can be summarised as indicated below.

Very serious infractions:

  • operating without the necessary licence or authorisation;
  • organisation, commercialisation, exploitation or promotion of illegal games;
  • transferring an authorisation or licence without the previous consent of the relevant gaming authority;
  • the manipulation of technical systems or the use of systems or terminals not authorised by the relevant gaming authority;
  • the unjustified and repeated non-payment of the prizes that might correspond to gaming participants; and
  • supply of technical support to unlicensed or unauthorised operators.

Serious infractions:

  • the granting of loans to participants;
  • permitting access to gambling to individuals who are prohibited from taking part in it (minors and self-excluded);
  • carrying out unauthorised advertising;
  • non-processing of participants’ claims; and
  • lack of collaboration with the gaming authority or inspection controls.

Minor infractions:

  • non-compliance with the obligations contained in the applicable regulations, provided that they are not explicitly typified as serious or very serious infractions;
  • not informing the public properly about the prohibition on participation or access for minors and persons included in the General Game Access Interdiction Register; and
  • lack of mandatory information from the operator to players.

Unlawful gambling is classified as a very serious infraction both at federal and regional level.

Unlawful gambling is sanctioned with a fine of EUR1,000,000–50,000,000 under the Gambling Act. In addition to the fine, the regulator is entitled to revoke the licence, to impose a temporary removal of the licence for a maximum period of four years or to close the media through which information society services are delivered and that support the gambling activities.

Each regional gaming regulation approves its own sanctioning regime; however, in most of them, unlawful gaming is sanctioned with a fine of up to EUR600,000. In addition to the fine, regulators are entitled to revoke the licence or to impose a temporary removal of the licence for a maximum period of five years.

The most relevant legislation that is pending at federal level and in most of the autonomous regions is the regulation on advertising and responsible gambling.

The regulatory authority for online gambling at federal level is the General Directorate for Gambling Regulation (Dirección General de Ordenación del Juego). This authority is under the umbrella of the Ministry of Finance and is competent to exercise the functions of issuing federal licences, drafting the regulation, supervision of games, enforcement and sanctioning of gambling activities at federal level.

The regulatory authority for regional gambling – both online and land-based – depends on each autonomous region and these are usually under the umbrella of the relevant regional departments of finance or the interior.

Before discussing the approach to gambling regulation in Spain, a differentiation should be made between:

  • regulation at federal level, which only refers to online gambling; and
  • regulation at regional level, which includes both online gambling and land-based gambling.

Online Gambling

Online gambling can be offered at federal level or at regional level. Customarily, entities apply for federal licences, since this way they can offer online gambling in the whole territory, without having to apply for licences at regional level.

The aim of the Gambling Act is to regulate all those modalities of games that take place at federal level in order to protect the public order, combat fraud, prevent addictive behaviours, protect minors and safeguard the players’ rights, without affecting what is established in the regional regulations.

To offer online gambling in Spain at federal level, entities must obtain a general licence per each category of game (betting, contest or other games) and also a single licence for each type of game included in its general licence category.

Land-Based Gambling

The regulatory approach for land-based gambling is based on the licensing or authorisation regime approved by each autonomous region. The requirements and conditions vary depending on the region and type of licence that an entity is interested in applying for.

At federal level, available licences are classified as follows.

  • General licence for Betting, which covers the following single licences:
    1. pools on sports betting;
    2. pools on horse racing;
    3. fixed-odds sports betting;
    4. fixed-odds horse racing;
    5. other fixed-odds betting; and
    6. exchange betting.
  • General licence for Contests, which also covers a single licence for contests.
  • General licence for Other games, which covers the following single licences:
    1. poker;
    2. blackjack;
    3. bingo;
    4. slots;
    5. roulette;
    6. baccarat; and
    7. complementary games.

For example, should an entity wish to commercialise bingo, baccarat and poker, it will need one general licence (Other games) and three single licences (bingo, baccarat and poker). In other words, general licences per se are not valid to offer games. To do so, the entity will also need to obtain a single licence per each type of game within its category. General licences can only be obtained through a public tender process announced by the General Directorate for Gambling Regulation. Entities can apply for single licences together with the general licence or at any other time, provided that the entity has already been granted with and holds the relevant general licence.

At regional level, each region has competence to establish its own licences and its own licensing procedure and regime.

Regarding general licences for online gambling at federal level, there have been three public calls since the approval of the Spanish Gambling Act in Spain in 2011: in 2011, 2014 and 2017. The latest window announced in December 2017 was opened up for one year and entities could apply for licences until December 2018. General licences are currently not available and can only be applied for during a public call announced for such purpose. Single licences can be applied for at any time by entities holding the corresponding general licence.

None of the three public tenders limited the number of operators that could be granted with a licence, nor the number of licences to be granted. In other words, all those operators that met the requirements established within the tender obtained the licence.

It must be noted that any interested party may request a new call for gambling licences at least 18 months after the previous call.

For regional land-based licences, the processes are approved by each autonomous region and depending on the type of licence and region, there can be limits on the number of licences available (for example, licences for betting shops in the Canary Islands) or the licences can be limited to one and subject to a public tender process (as it is, for example, for the licences for land-based casinos).

Online Gambling at Federal Level

General licences are valid for ten years, extendable by another ten. Single licences have a minimum duration of one year and a maximum duration of five, depending on the type of gambling product, and these are also extendable by successive periods of the same duration. The expiry of the general licence that the single licence is linked to implies the expiry thereof.

Regional Level

The duration of licences depends on each region and type of licence. Customarily, licences are valid for a period of ten years, extendable by another ten.

Although there are differences between the application requirements for land-based (with slight differences among the regions) and online operators subject to the Gambling Act, the requirements are always divided into three sections in order to prove the legal, economic and technical solvency.

The main application requirements are as follows.

  • Corporate vehicle, minimum share capital, exclusive corporate purpose.
  • Corporate documentation in order to accredit compliance with all the requirements. Among these documents, both the regional and federal regulator requests the submission of an official public deed identifying the Ultimate Beneficial Owner.
  • Should the entity not be based in Spain, it must have a permanent representative in Spain.
  • To be up-to-date with the Tax Agency and Social Security.
  • To accredit the economic solvency. For this purpose, and notwithstanding the submission of other documentation, the applicant must deposit an economic guarantee and provide annual accounts or other declarations in this regard.
  • In addition, other documentation – such as an AML policy, business plan, agreements with providers, fraud prevention manual and others – must be submitted.
  • Certain declarations to be signed by the directors and shareholders of the applicant entity (ie, that they have not been convicted of a criminal offence). In addition, the Spanish Gambling Act requires the directors and shareholders of the applicant entity to disclose information about their relatives (ascendant and descendants older than 18) in order to inscribe them in the Registry of Individuals linked to the operator since these individuals cannot gamble on the relevant operator’s website.

The timing of the application process depends on the applicable regulation, type of licence and conditions approved by the corresponding public tender, if applicable. For instance, the last window to apply for general licences for online gambling at federal level was opened for one year and interested parties were entitled to apply for their licences between December 2017 and December 2018. The General Directorate for Gambling Regulation (DGOJ) had a term of six months from the submission of the relevant applications to issue or refuse them. Initially, the licences are granted with a provisional nature. To obtain definitive licences, operators must submit the definitive certifications report of the technical systems before the DGOJ within a maximum term of four months from the provisional granting. Once the certification documentation is submitted, the General Directorate for Gambling Regulation proceeds with the review and granting of the definitive licences within a maximum term of two months. It must be noted that operators can start operating with the provisional licence.

With regard to regional licences, the duration depends on each regional regulation and, if applicable, on the conditions of the public tender process. Customarily, the timing for the regulator to review and proceed with the granting of the relevant licence takes between three and six months from the submission of the application.

For online gambling licence applications at federal level, entities must satisfy the following administrative fees:

  • EUR10,000 per each general and single licence that the entity is applying for;
  • EUR2,500 per each general and single licence for the inscription in the General Registry of Gaming Licences; and
  • EUR38,000 to be paid only once, for the homologation of the licences by the General Directorate for Gambling Regulation.

For regional licence applications, the cost depends on the region and the type of licence applied for.

For online gambling licences at federal level, there is an annual fee of 0.75 ‰ (per mille) on turnover that operators need to pay by January 31st each year.

For regional licences, the ongoing annual fee depends on the region and type of licence.

Each region has its own regulation for each type of premises licensing: casinos, gaming halls, bingos and betting shops. Therefore, the requirements for licensing depend on the premises and autonomous region.

While the approach from some regions is more restrictive about the requirements – such as the number of slots/betting terminals, establishments or installations, or the minimum size (in square metres) – others are more flexible. Also, it must be noted that in some cases, as it is for the casino premises, licences are subject to a public tender process.

Although the licensing process depends on the region and type of licence to be applied for, in general terms, the requested documentation aims to prove legal, technical and economic solvency of the applicant. The main requirements and differences that can be identified are as follows.

  • Corporate form – some regions request a specific form for the corporate vehicle. The region of Madrid, for instance, requests the corporate form of “SA” (equivalent to a standard plc) for casino licence applications, while in Catalonia there is no specification of the corporate form, neither for casinos nor gaming halls.
  • Minimum share capital – most of the regions require a minimum share capital for betting shops and casinos. For example, in Madrid, the minimum share capital for a casino licence is EUR12,000,000.
  • Economic guarantees – these also vary by region and type of premises licence. As an example, the bank guarantee for a casino in Catalonia is EUR601,012.10 and EUR60,000.00 for a gaming hall. On the other hand, in the Balearic Islands the guarantee is EUR30,000 for a gaming hall and EUR1,000,000.00 for betting shops.
  • Certification reports proving compliance with technical requirements.
  • Certificates and documents proving legal solvency (for instance, articles of association and deeds of incorporation of the company).
  • Certificates and documents proving economic solvency (for instance, annual accounts and certificates to be up-to-date with the Tax Authority and the Social Security).

The land-based gambling sector is currently implementing certain changes with the aim of reinforcing the protection of vulnerable individuals, such as minors or people registered in the General Game Access Interdiction Register. The main changes in this regard are as follows.

  • Gaming establishments entrance controls. The regions of Madrid and Extremadura, among others, have modified this area of regulation during 2019, requiring the implementation of additional controls for access to betting shops and gaming halls.
  • Minimum distances between betting shops and between these and educational centres, which is the same as with gaming halls. The region of Valencia prohibits the opening of gaming halls closer than 700 metres as a minimum distance between them. Even more restrictive is the region of Extremadura, which prohibits opening betting shops less than 300 metres from educational centres and 250 metres between two betting shops. Moreover, there are other regions that are currently working on the same line; for example, Murcia.

There have been recent changes since some cities, such as Madrid and Barcelona, are implementing legislative measures to prohibit or suspend the granting of new authorisations to open gambling halls or betting shops.

Additionally, some regions have developed their regulations to approve procedures of authorisation to install physical accessory terminals, which allow participation in online games licensed at federal level in land-based premises.

The Spanish regulation does not distinguish between B2C or B2B licences, neither between the law applicable to the operations of one operator or the other.

The definition of the concept "gaming operator" states that an operator needs to obtain a licence in Spain if it meets the following requirements: (i) it wholly or partly runs a gambling activity and its incomes are linked to gross or net revenue, commissions and whatsoever any other amounts related to gaming services and, at the same time, (ii) it performs any commercialising gambling activity, such as determining the prizes for tournaments, managing players' rules, transactions and payment settlements, and managing the gaming platform or the registration of users.

In addition, those meeting the requirements above that also manage gaming platforms, in which they are members, or that other gaming operators join and where they put in common stakes coming from their respective users, will be considered as gaming operators and gaming co-organisers.

The Spanish regulation does not make any distinction between B2B and B2C operators.

The regulation provides a definition for the concept of “gaming operator” and if a B2B operator meets the requirements established by the regulation, it is subject to be licensed and, technically speaking, it will be considered as a gaming operator.

Therefore, the inclusion of a B2B operator in the concept of a gaming operator, and so the need for it to be licensed, actually depends on the specific services that the operator is interested to render in Spain and the conditions on how it would do so.

In practical terms, experience has shown that the Spanish regulator understands that a B2B company falls under the definition of “gaming operator” in exceptional circumstances; for example, when offering network jackpots, offering share liquidity or providing all gaming services to a white-label company that only provides the "look and feel".

Affiliates do not need to hold a licence in Spain as far as they do not register clients, nor maintain an agreement or gaming account with them.

While-label arrangements in a B2B scenario are permitted as long as the actual provider who is behind the website is duly licensed, since the B2B operator in this case falls under the definition of “gaming operator”.

Apart from this and depending on the activity developed by the white-label operator (the one providing the “look and feel”), it also might fall under the definition of “gaming operator” and therefore it may be subject to licensing as well.

Spain has recently gone through a third licensing process in order to apply for general licences. There have been around 30 applicants and there are now 80 licensed operators in Spain. From the regulatory perspective, there has been a relevant change in the verification process of customers, reinforcing the online verification procedure with a mandatory secondary verification based on documents or digital onboarding. The new regime currently states that until this secondary verification is completed, customers can only deposit up to EUR150 and cannot withdraw funds.

The most expected forthcoming change is the regulation on advertising and responsible gambling. The General Directorate for Gambling Regulation has been working on this regulation since 2015; however, due to continued political changes in Spain, neither of the two drafts published since then has been approved yet.

The regulation does not contain specific technical measures to protect consumers from unlicensed operators. However, the General Directorate for Gambling Regulation is entitled to request internet service providers and financial entities to adopt blocking measures within sanctioning procedures initiated against illegal operators. In this sense, blocking access from Spanish IP addresses and payment blocking are the most common measures.

The gambling sector is fully committed to the detection of participation in gambling activities by minors and vulnerable groups. The aim of the responsible gambling requirements is to prevent and correct the negative effects of gambling through the application of different measures.

Most of the responsible gaming requirements are compulsory for online operators. The requirements for land-based operators vary by region and premises, despite the fact that some land-based operators, by their own initiative, apply additional responsible gambling measures in the business.

The main responsible gambling requirements are as follows.

  • Prohibition of granting loans to players.
  • Minimum information and attention to participants for the operators to communicate with and assist players. For example, the information provided to players must be clear, precise and accurate; the customer service must be accessible for claims of players; and operators must make available to players a test of responsible gambling to evaluate potential issues with gambling.
  • Control of the activity. The list below establishes relevant examples of these requirements.
    1. Identification of participants – it is the responsibility of the operators to establish the systems and mechanisms that facilitate and allow the identification of the participants in the games. This is a measure applicable to both online and land-based operators.
    2. Deposit amount limits by default – limits on players’ deposits is a preventative measure of responsible gambling and a mandatory requirement for the online operators licensed at federal level, and is also applied in land-based businesses such as casinos. Despite these, “by default limits” can be reduced by the participant at any time and directly applicable; they can also be increased or removed (fulfilling certain conditions). The limits by default in online gambling are EUR600 daily, EUR1,500 weekly and EUR3,000 monthly.
    3. Particular requirements for slot games – for instance, there is a minimum duration approved for the slot spin on land-based terminals. In the region of Madrid, the minimum duration of the spin on these terminals is five seconds, while in the region of the Basque Country, this term is three seconds. In relation to online gambling at federal level, the duration is also three seconds.
    4. The regulation applicable to online gambling at federal level also establishes specific responsible gambling requirements for slots (players must set up the game at the beginning of each slot session, including a limit for the time and money to be spent) and in-live betting products (a special rule regarding the amounts to bet).

The authorities have created different tools for operators and citizens in order to promote responsible gambling. The most relevant are the following:

  • The General Register of Gaming Access Bans (RGIAJ) – through the inscription in the RGIAJ, the individual is fully prohibited from accessing the gambling activity (which is applicable to online and land-based gambling). The register is formed by the data of citizens that voluntarily do not wish to exercise their rights to gamble and by those that are declared incapacitated by a legal ruling.
  • Players verification service – the General Directorate for Gambling Regulation offers to online operators a tool to proceed with the ID verification of customers that are resident in Spain. In addition, operators can also check with this tool whether the customer is registered with the RGIAJ.
  • Phishing alert – the General Directorate for Gambling Regulation recently launched a service addressed to all citizens, in order for the operator to detect and communicate the attempt of activation of a user registration, when the identity data provided matches the data of an individual registered with this service.

There is no specific anti-money laundering (AML) guidance relevant to the gambling sector available in Spain. Nothing has been published in this regard, neither by the General Directorate for Gambling Regulation nor the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences (SEPBLAC).

Given that the central state has competence over AML regulation, the main applicable AML regulation is composed of Federal Law 10/2010, of April 28th, on the prevention of money laundering and terrorist financing, and Federal Royal Decree 304/2014, of May 5th, developing the regulation of the Spanish AML Act.

The Spanish AML Act was amended to transpose the fourth AML EU Directive. The amendments to the AML Act were included in Royal Decree-Law 11/2018, of August 31st, that was published in the Spanish State Official Gazette on 4 September 2018. The main changes incorporated were related to the obliged subject including online operators in it, the application of due diligence measures for online operators, record-keeping and the representative before SEPBLAC.

While the fifth AML EU Directive came into force on 9 July 2018, the deadline by which the EU member states must transpose the fifth AML Directive is 10 January 2020, but, taking into account that the fourth AML EU Directive was transposed with an important delay, the same will probably happen with the fifth AML EU Directive.

The Spanish AML regulation establishes both for online and land-based gambling operators the instructions, proceedings and duties that need to be applied by these obliged entities for the prevention of money laundering.

The main requirements and obligations are the following.

  • To approve a suitable manual for the prevention of money laundering and to keep it at the disposal of SEPBLAC.
  • Application of due diligence measures – according to the Spanish AML Act, when a customer is found to carry out transactions that amount to EUR2,000 or more, whether the transaction is carried out in a single operation or in several operations that appear to be linked, either when upon the collection of winnings, the wagering of a stake, or both (for online gambling operators), or at the time of receiving gains or purchase or sale of gaming chips (for land-based operators), the operator should implement the corresponding due diligence measures (and not only the ID verification of the customer), such as ongoing monitoring and investigation of the purpose and nature of the business relationship.
  • In particular, land-based casinos must identify and verify documentarily the identity of the persons that intend to enter the establishment and keep records of the documentation gathered in this regard. In addition, casinos must identify all persons that intend to perform the following transactions:
    1. delivery of cheques to customers as a result of the exchange of chips;
    2. transfers of funds made by casinos at the request of customers; and
    3. certificates issued by casinos about the gains obtained by customers.
  • To keep records of the documentation gathered for compliance under the obligations under the Spanish AML Act for a period of ten years, after which the records should be eliminated. In addition, after five years from the end of the business relationship with the customer, the documentation should only be accessible by the internal control bodies of the operator, including its technical prevention units and the individuals in charge of its legal defence.
  • To appoint a representative on behalf of the operator before SEPBLAC.
  • To establish an adequate internal compliance unit responsible for implementing the AML policies and procedures.
  • To report suspicious transactions and collaboration with SEPBLAC.
  • To approve an annual plan of training activities for employees, which must be approved by the internal control body.
  • Annual examination by an external expert of the operator’s manual for the prevention of money laundering.

Contrary to what happens, for instance, in the UK, in Spain there is no specific regulatory or supervisory agency for advertising.

In spite of that, in the case of online gambling at federal level, it is the same General Directorate for Gambling Regulation that supervises compliance with the applicable advertising rules by the gambling operators and sanctions them if they breach those regulations. And regarding the audio-visual communication service providers rendering services to gambling operators, the authority to launch proceedings and sanction lies not only with the General Directorate for Gambling Regulation but also with the National Commission of Markets and Competence (CNMC).

According to Article 2 of the General Advertising Law 34/1988, advertising is defined as “any form of communication made by a natural or legal person, public or private, in the exercise of a commercial, industrial, craft or professional activity, in order to directly or indirectly promote the hiring of movable or immovable property, services, rights and obligations”.

The key legal provisions can be divided within the following groups.

  • Gambling operators have to be duly licensed by the regulator in order to be able to advertise their products. According to Article 7.1 of the Gambling Act, in order to carry out gaming activities on audio-visual programmes, news media or websites, gaming operators must have an authorisation (ie, the corresponding gambling licence). The same happens at regional level.
  • The need for any advertising third-party provider to confirm that its client (gambling operator) is duly licensed. According to Article 7.3 of the Gambling Act, any advertising entity or agency, audio-visual or electronic communication service provider, media or information society service that broadcasts or disseminates the direct or indirect advertisement or promotion of games or operators shall confirm that whoever has requested those advertisements or advertising slogans holds the corresponding licences issued by the General Directorate for Gambling Regulation.
  • Infractions and sanctions applicable. There are mainly two infractions in the Gambling Law related to advertising, which are (i) the promotion, sponsoring and advertising of games subject to this Law, or intermediation actions, when the persons doing so do not have an authorisation or when these are distributed in breach of the conditions and limits set in the permit or in breach of the current rules in this regard, irrespective of the medium used; and the (ii) failure to fulfil requirements for information or cutting off the provision of services as required by the General Directorate for Gambling Regulation and directed towards payment service providers, audio-visual communication service providers, information society services or electronic communication providers and social media. Both infractions are qualified as serious infractions and are therefore subject to fines EUR100,000–1,000,000 and to the suspension of activity in Spain for a maximum period of six months.

Regarding land-based and online gambling at regional level, the applicable sanctions are approved by each autonomous region.

The current legislation applicable to advertising of gambling operators – and their products – is the following:

  • General Advertising Act 34/1988, dated November 11th;
  • Unfair Competition Act 3/1991, dated January 10th;
  • Legislative Royal Decree 1/2007, dated November 16th, approving the refunded text of the General Act for the Defence of the Consumers and Users and other complementary laws;
  • Information Society Services and Electronic Commerce Act 34/2002, dated July 11th;
  • General Audiovisual Communications Act 7/2010, dated March 31st;
  • Gambling Act 13/2011, dated May 27th;
  • regional gambling regulations for land-based and online gambling at regional level; and
  • the Code of Conduct Regarding Commercial Communications of Gambling Activities issued by Autocontrol (the Association for Advertising Self-regulation), although it is only binding for companies that adhere to it.

The most important restriction is that gambling products can only be advertised by licensed operators.

Apart from that, the main current restrictions on advertising are those addressed to protect users through certain principles (legality, loyalty, identification, truth, social responsibility, responsible gaming, protection of minors, etc) and, more precisely, when it comes to the protection of minors, throughout watershed times.

On November 15th, an updated version of the Code of Conduct was published. The most relevant restrictions that have been implemented and that will enter into force on 15 January 2020 are:

  • a limit of EUR200 for the welcome bonus announced in commercial communications;
  • bonuses or promotions of any kind cannot be announced during a live broadcast;
  • advertising cannot star people under 25, include the presence of active athletes nor famous people with public notoriety and participation in children's spaces or whose activity is focused on minors; and
  • increase in the visibility of logos regarding responsible gambling and prohibition of players under 18 (full screen and/or band).

Regarding watershed times, gambling operators in Spain can only advertise in compliance with the following schedules.

  • Bingo, pool betting and other fixed-odds betting can only be advertised on TV and radio outside the following watershed reinforced times (provided the advertisement is not made during or near programmes devoted to children):
    1. Monday to Friday – from 8am to 9am and from 5pm to 8pm.
    2. Saturdays/Sundays/national bank holidays – from 9am to noon.
  • Roulette, baccarat, blackjack, poker, sports and horse fixed-odds betting can only be advertised on TV from 10pm to 6am (no matter the day of the week).
  • Roulette, baccarat, blackjack, poker, sports and horse fixed-odds betting can only be advertised on radio outside the watershed reinforced times described in (a).

As an exception to the above watershed times (and only for live horse or sports pool betting or fixed-odds betting), it is permitted to advertise during the broadcast of the relevant event, from its beginning to its conclusion, including during its break times, and always provided that the advertisement corresponds to the organisation of bets related to the broadcasted event or related to other events of the same competition (even if not broadcasted at that moment).

  • Specific TV programmes devoted to games of chance or betting can only be displayed from 1am to 5am – self-promotion advertisement of these programmes can only be displayed from 10pm to 6am (no matter the day of the week).
  • Commercial communications or self-promotion of (i) contests included in a programme suitable for under-18s, (ii) lotteries with a deferred effect, (iii) complementary games or (iv) raffles do not have schedule restrictions unless they are displayed during or near a programme primarily addressed to children.
  • Public – state – lotteries can advertise with no time restrictions.

Please note that social gaming products can generally be advertised without the restrictions applicable to gambling products.

In terms of gambling advertising for online at federal level, Articles 40 d) and e) of the Gambling Act state the relevant applicable infractions, which are both subject to the same sanctions: (i) a fine of EUR100,000–1,000,000 and (ii) the suspension of the activity in Spain for a maximum period of six months.

Acquisitions and change of control are not subject to the prior approval of the regulator. However, it should always be taken into account that if, as a result of said acquisition, any of the conditions of the operator company that were disclosed to the regulator by the time of applying for the relevant licences were affected or changed (for instance, the solvency of the group, the intercompany agreements for the provision of services or the directors of the operator company), the operator company will have to notify to the regulator not only the change of control (within one month as from its completion) but also file the documents evidencing any of those material changes that have taken place as a result of the acquisition. Despite the fact that a change of control does not require the prior approval of the regulator, it is always advisable to contact the regulator before completing the change of control in order to ascertain any possible concerns from their end on said transaction.

The relevant threshold is set upon the concept of “significant” shareholder. That concept should be taken as it is defined by the corresponding domestic law of the operator company. For instance, in Spain, a “significant shareholding” of a listed company would be 3% or more of the shares, and for a non-listed company it is a percentage with which the relevant shareholder could effectively, even directly or indirectly, control the company.

Any “significant” change of control shall be notified to the regulator within one month of its completion.

There is no distinction for passive investors.

Regulatory bodies are not only legally allowed to impose economic sanctions but also to revoke or suspend licences. Please take into account that regulators could even suspend gambling licences or seize any assets or documents related and needed for the licensed activity as a precautionary measure.

Economic sanctions could be enforced throughout the exercise of the relevant guarantees submitted by the operators before the regulator to cover their liabilities and potential consequences that have arisen as a result of the breach of their obligations as operators. Apart from those guarantees, in the event they were not enough to cover a certain liability, the sanctions imposed by the regulator could be enforced throughout the common civil conducts, namely, the seizure of assets, goods, shares, deposits, etc.

The other types of sanctions, which are the suspension of the activity and the removal of the ability to apply for a new licence during a certain period, are enforced directly by the same regulator or by the Ministry of Tax (in the event of very serious infractions), so its enforcement does not require any further ancillary measure apart from the resolution stating that sanction.

Some sanctioning proceedings could be found in certain databases (depending on the nature of the proceeding) and they could also be particularly requested and obtained by interested individuals.

As mentioned before, financial penalties are normally firstly enforced by the execution of the guarantees deposited by the operator before the regulator and by the seizure of assets of the sanctioned operator company, if the guarantees were not sufficient to cover the relevant liability.

There have been no recent trends in Spain regarding this topic.

There have been no recent trends in Spain regarding this topic.

There have been no recent trends in Spain regarding this topic.

There have been no recent trends in Spain regarding this topic.

There have been no recent trends in Spain regarding this topic.

There have been no recent trends in Spain regarding this topic.

The tax rate for online gambling at federal level, subject to the Gambling Act, is 20% on GGR (gross gaming revenue, or the total amount of money wagered minus the amount won) for all gambling products.

The tax rate for online gambling at regional level, subject to each regional regulation, is 10% on GGR in most of the regions.

The tax rate applicable to the land-based sector is approved by each regional regulation and therefore it varies depending on the region. As an example, in the region of Madrid, the applicable taxes are as follows.

  • 20% on GGR general tax rate.
  • 15% on GGR for bingo, and 30% on GGR for electronic bingo.
  • 10% on GGR for online games developed in the Madrid region.
  • 13% on GGR for betting games and 10% on GGR for sports betting, horse racing and other betting games.
  • The tax rate applicable to land-based casinos depends on the tax base:
    1. 22% if the tax base is less than EUR2 million;
    2. 30% if the tax base is from EUR2–8 million;
    3. 35% if the tax base is from EUR8–15 million; and
    4. 40% if the tax base is more than EUR15 million.

In Andalusia, for instance, the applicable tax rate depending on the tax base is:

  • 15% if the tax base is less than EUR2 million;
  • 35% if the tax base is from EUR2–3.5 million;
  • 48% if the tax base is from EUR3.5–5 million; and
  • 58% if the tax base is more than EUR5 million.

In addition, there are fixed rates that apply to operating betting terminals or automatic appliances that are suitable for the development of games. The amount is dependent on the applicable regulation, but the fee generally ranges from EUR3,000–4,000 per year for terminal type B/AWP and from EUR4,000–5.500 per year for terminal type C/casino machines.

Asensi Abogados SLP

Gran Via Puig Del Castellet 1, bloque 2
07180 Santa Ponsa
Islas Baleares
Spain

+34 971 90 92 19

+34 871 95 43 47

info@asensi.es www.asensi.es
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Law and Practice

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Asensi Abogados is a boutique law firm specialised in the gaming and gambling sector. The firm represents and advises a large number of international gaming companies with interests located within the Spanish and Latin American market. The firm mainly works for online companies as well as for land-based operators, suppliers and manufacturers. Through winning the correspondent public tender convoked by Coljuegos, the Colombian gaming regulator, Asensi Abogados was the official adviser for the development of the first online regulation within the Latin American Region. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Jdigital Association.

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