Gaming Law 2023

Last Updated November 28, 2023

Spain

Law and Practice

Authors



Asensi Abogados is a boutique law firm specialising in the gaming and gambling sector. It represents and advises a large number of international gaming companies with interests across the Spanish and Latin American markets. The firm works for the largest online betting and casino operators, software providers, skill games operators, affiliates and payment solution providers, as well as land-based operators, slot-machine manufacturers and suppliers. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Digital Gaming Association (Jdigital). A team of two partners and nine associates operates in Spain, while the Colombian office is composed of one partner and three associates. Recent work carried out by the firm includes licensing procedures at the online and land-based levels, providing detailed advice on the practical application of the new regulatory developments for online operators in Spain and assisting international operators in relocating to Ceuta and Melilla, Spain’s two gambling business-friendly jurisdictions.

Regulatory Trends

The regulatory regime for gambling in Spain is aimed at reinforcing:

  • the protection of players;
  • public order; and
  • the prevention of addictive behaviour, fraud and money laundering.

In this sense, the trend for protecting public health, minors, consumers and society as a whole has been clearly expressed and strengthened by the most recent and relevant developments in the sector, with the approval of one of the most restrictive regimes on gambling advertising through the entry into force of Royal Decree 958/2020, of 3 November, on commercial communications for gambling activities and the publication of the Royal Decree 176/2023, of 14 March, aimed at the development of safer gambling environments. This latter regulation seeks to offer a comprehensive protection framework for all participants in a game and establishes enhanced protection model for certain groups of players based on their specific characteristics.

Gambling Sector Growth

The online gambling industry, according to the latest quarterly report (Q2 2023) issued by the Spanish gambling regulator, saw a robust 2.75% rise in gross gaming revenue (GGR) from the preceding quarter, hitting EUR312.6 million. This represents a significant 55.06% increase compared to Q2 2022, signalling a noteworthy recovery from recent regulatory restrictions.

In addition, the land-based gambling sector, which suffered due to the COVID-19 pandemic in 2020, witnessed a profound rebound as well, with the total stakes in entertainment gambling such as casinos, bingo, and betting machines, soaring to EUR12.678 billion, marking an impressive 34% year-on-year growth.

General Regulation

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

Therefore, online gambling in Spain is regulated at both federal and regional level, and the applicable regulation, and which gambling products will be legally approved, depends on whether these are commercialised at a national level or only at a regional level in one or several autonomous regions in Spain.

Online gambling at a 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. A game is not permitted if it is not regulated or is not covered under any of the regulations in force.

The following games have been regulated so far, and are therefore permitted to be offered at a federal level:

  • 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 a regional level are regulated by each of the 17 autonomous regions in Spain and the autonomous cities of Ceuta and Melilla. Instead of a specific regulation per type of game, each autonomous region approves a catalogue of games that are permitted and can be offered.

There are some minor differences between the regions, but the following gaming products are generally approved and permitted:

  • 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.

It is important to highlight that the various formats of gambling products approved and listed above might be permitted in different forms, at both the federal and regional levels (different forms of blackjack, roulette, poker, etc).

Sector-Specific Regulation

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

Fantasy sports can be offered at a 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 a regional level; in both cases, they are subject to licensing.

Social gaming is permitted, and these games are not subject to any licence, at a federal or regional level. Games of skill are outside the scope of the current Spanish regulatory framework and thus, are not subject to licensing.

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

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

As explained in 2.1 Online, land-based gambling (and online gambling at regional level) is regulated by each of the 17 autonomous regions in Spain and the autonomous cities of Ceuta and Melilla, and therefore each autonomous region has its own catalogue of approved and permitted games. There are certain differences among the regions, but the following gaming products are generally permitted:

  • 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.

Federal Legislation

The key legislation for online gambling at federal level is as follows:

  • the Spanish Gambling Act;
  • Royal Decree 958/2020, of 3 November, on commercial communications for gambling activities (Real Decreto 958/2020, de 3 de noviembre, de comunicaciones comerciales de las actividades de juego);
  • Royal Decree 176/2023, of 14 March, by which safer gambling environments are developed (Real Decreto 176/2023, de 14 de marzo, por el que se desarrollan entornos más seguros 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 (Dirección General de Ordenación del Juego – DGOJ); and
  • ministerial orders approving each type of game subject to a single licence.

Regional Legislation

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

The Gambling Act defines gambling as an activity in which 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 allows these sums to be transferred between the participants, regardless of whether the level of skill of the players is decisive in the results or whether 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 fall outside the scope of gambling, thus, the corresponding gambling regulation will not be applicable (for example, pure skill games will be excluded or prizes in virtual currency with no monetary value).

There is no specific or 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, in real time or recorded.

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

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

Very serious infractions include:

  • operating without the necessary licence;
  • the organisation, commercialisation, exploitation or promotion of illegal games;
  • transferring a licence without the prior 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 prizes to gambling participants; and
  • the supply of technical support to unlicensed operators.

Serious infractions include:

  • the granting of loans to participants;
  • permitting access to gambling to individuals who are prohibited from taking part in it (for example, minors and the self-excluded);
  • carrying out unauthorised advertising;
  • non-processing of participants’ claims;
  • lack of collaboration with the gaming authority or inspection controls;
  • non-compliance with the requirements and obligations regarding responsible gaming and the protection of players established in the regulations in force; and
  • promoting or facilitating the participation from Spain in gambling activities through websites other than those legally authorised by gambling operators with a licence in Spain.

Minor infractions include:

  • non-compliance with the obligations contained in the applicable regulations, provided that they are not explicitly typified as serious or very serious infractions;
  • not properly informing the public about the prohibition on participation or access for minors and persons included in the General Game Access Interdiction Register;
  • a lack of mandatory information being provided from the operator to players; and
  • the participation from Spain, through the use of Spanish territorial IP address masking techniques, in gambling activities offered through websites other than those legally authorised by gambling operators with a licence in Spain.

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

Unlawful gambling is sanctioned under the Gambling Act with a fine of between EUR1 million and EUR50 million. In addition to the fine, the regulator is entitled to revoke the licence of the entity carrying out the unlawful gambling, disqualify it from carrying out gambling activities for a maximum of four years, or close the media through which information society services were delivered and which supported the unlawful gambling activities.

Each regional gaming regulation – both online and land-based – 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 of five years.

With the regulation on online gambling advertising published in 2020 and the new Royal Decree on safer gambling published in 2023 , the legal regime for online gambling at federal level is now duly consolidated, without prejudice to the forthcoming regulations that are currently being updated or developed:

  • Draft of the Royal Decree that will amend the Royal Decree 1614/2011, of 14 November, developing the Gambling Act 13/2011, on Licences, Authorisations and Gaming Registries, for introducing a system of joint deposit limits among the licensed operators. In the draft of this Royal Decree, the primary amendments include a proposed framework to delineate an aggregate limit on deposits made by a single user across accounts linked to multiple operators and changes in the increase to the operator’s guarantee associated with the general licences.
  • Draft Resolution approving the new data model and modifying Annex I of the Resolution of 6 October 2014, which approves the provision that develops the technical specifications for gaming, traceability, and security that non-reserved gaming technical systems subject to licences granted under Law 13/2011, of 27 May, on gambling regulation, must comply with. The key aspects for consideration entail the proposed amendments, allowing the location of internal control system (ICS) in any European country rather than exclusively in Spain, together with the reduced ICS data retention period, decreasing from six to four years.

At the regional level, the most relevant pending legislation in most autonomous regions is still the regulation on advertising and responsible gambling.

The regulatory authority for online gambling at the federal level is the DGOJ.  Since November 2023, this authority has been put under the umbrella of the new Ministry of Social Rights, Consumer Affairs and Agenda 2030 (prior to this, it was under the umbrella of the Ministry of Consumer Affairs for almost four years and under the Ministry of Finance before that) and is competent, at the federal level, to:

  • issue federal licences;
  • draft regulation;
  • supervise games; and
  • supervise the enforcement and sanctioning of gambling activities.

The regulatory authority for regional gambling – both online and land-based – depends on each autonomous region. These authorities 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 a federal level, which only refers to online gambling; and
  • regulation at a regional level, which includes both online and land-based gambling.

Online Gambling

Online gambling can be offered at a federal or 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 a regional level.

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

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

Land-Based Gambling

The regulatory approach to 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.

Please refer to 3.7 Recent or Forthcoming Legislative Changes and 6.5 Recent or Forthcoming Legislative Changes for discussion of developments in the Spanish gambling sector. Other than these, there have been no significant changes to the licensing and regulatory framework in Spain over the past year.

Federal Level

At a federal level, the 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, an entity that wishes to commercialise bingo, baccarat and poker 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 for each type of game within its category. General licences can only be obtained through a public tender process announced by the DGOJ. Entities can apply for single licences together with the general licence or at any other time, provided that they have already been granted and still hold the relevant general licence.

Regional Level

Each region has competence to establish its own licences and its own licensing procedure and regime.

There have been three public calls for general licences for online gambling at the federal level since the approval of the Spanish Gambling Act in 2011: in 2011, 2014 and 2017. None of the three public tenders limited the number of operators that could be granted 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.

The Spanish regulation permits any interested party to request a new call for gambling licences at least 18 months after the previous call.

The processes for regional land-based licences 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 is the case, for example, for 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 of the single licence as well.

Regional Level

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

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

The main application requirements are as follows.

  • It must be a corporate entity with minimum share capital and an exclusive corporate purpose.
  • There must be 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.
  • If the entity is not based in Spain, it must have a permanent representative in Spain for notification purposes.
  • It must be up to date with the Tax Agency and social security authorities.
  • To prove economic solvency, notwithstanding the submission of other documentation, the applicant must deposit an economic guarantee and provide annual accounts or other declarations in this regard.
  • Other documentation must also be submitted, such as an anti-money laundering (AML) policy, the responsible gambling policy, a business plan, agreements with providers and a fraud prevention manual.
  • Certain declarations must be signed by the directors and shareholders of the applicant entity (ie, that they have not been convicted of a criminal offence).

The Spanish Gambling Act also requires the directors and shareholders of the applicant entity to disclose information about their relatives (spouse, cohabitant, ascendants, 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 a federal level was opened for one year, with interested parties being entitled to apply for their licences between December 2017 and December 2018. The DGOJ had a term of six months from the submission of the relevant applications to issue or refuse the licences.

Initially, the licences are granted with a provisional nature. To obtain definitive licences, operators must submit the definitive certification report of the technical systems to the DGOJ within a maximum term of four months from the provisional granting. Once the certification documentation is submitted, the DGOJ proceeds with the review and the granting of the definitive licences within a maximum term of two months. Operators can start operating with the provisional licence.

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

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

  • EUR10,615.20 for each general and single licence that the entity is applying for;
  • EUR2,653.81 for each general and single licence for the inscription in the General Registry of Gaming Licences; and
  • a one-off fee of EUR40,337.76 for the homologation of the licences by the DGOJ.

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

For online gambling licences at a federal level, there is an annual fee of 0.075% of turnover, which operators need to pay by 31 January 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 the autonomous region in question.

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

Notwithstanding the above-mentioned regional variation, in general terms the requested documentation aims to prove the 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 entity; the region of Madrid, for instance, requests the corporate form of an “SA” (equivalent to a standard PLC) for casino licence applications, while in Catalonia there is no specification regarding the corporate form for casinos or gaming halls.
  • Minimum share capital – most of the regions require a minimum share capital for betting shops and casinos; for example, in Aragon or the Basque Country, the minimum share capital for a betting shop is EUR1 million.
  • Economic guarantees – these also vary by region and type of premises licence; for example, the bank guarantee for a casino in Catalonia is EUR601,012.10 and EUR60,000.00 for a gaming hall; in the Balearic Islands, the guarantee is EUR30,000 for a gaming hall and EUR1 million for betting shops; and in Madrid, the guarantee for a betting shop or a casino is EUR12 million.
  • 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 that prove the entity is up to date with the Tax Agency and the social security authorities).

The land-based gambling sector is still implementing certain changes, with the aim of reinforcing the protection of vulnerable individuals and tightening the regulation of gambling advertising. The main changes in this regard are as follows.

Approval of New Regulations in Balearic Islands, Aragon and Galicia

On 3 April 2023, Law 9/2023 was approved in the Balearic Islands, which modified their previous Gambling Law. This positioned the Balearic Island at the forefront of regions pioneering measures to combat gambling addiction. With the application of the new Balearic regulations, slot machines will cease to emit lights or sounds, remain dormant when not in use, and incorporate a start-up screen that will ask the user about their legal age and warn them about the potential risks of addiction associated with the game.

On 23 March 2023, these same measures were incorporated in Aragon, following the approval of Law 9/2023, which modified their previous Gambling Law. Included among the significant changes in this new regulation is a provision requiring a minimum distance of 500 metres between gaming establishments and educational centres, as well as the prohibition on cash withdrawals from point of sales terminals with credit cards within the premises of gaming establishments.

On 4 July 2023, a new Gambling Law was issued in Galicia. This law dictates that leisure and dining venues, which do not primarily serve as gaming establishments, are now limited to two recreational machines each. Bars are permitted to host type A special (slot machines) and type B (betting) machines. Bingo halls can additionally include type B special machines, whereas casinos are allowed type C machines, which are entirely based on chance and offer larger prizes. In response to public concerns, the law has changed the distance regulations between gaming establishments and educational centres. The required distance has been increased from 150 metres to 300. Notwithstanding this, it should be noted that existing gaming establishments are given a 15-year grace period to comply, but must adhere to the new distance if relocating.

This new law is viewed by some as a missed opportunity and “lacking courage”, as it fails to directly address the issue of minors and gambling addicts betting in bars.

Distances Between Gambling Premises and Educational Centres

Spain’s regions have largely regulated the minimal distances between gambling venues and educational institutions. Valencia, for example, mandates a 500-metre separation between gaming halls, and an 850-metre gap between these and educational centres. Andalusia requires a smaller, 150-metre distance, while Barcelona enforces a larger 800-metre one. Further, by issuing Decree 19/2022, which modified Law 6/2001, Madrid also regulated the proximity of gambling sites to educational centres, imposing a 100-metre minimum distance between game-play venues and a 300-metre minimum distance between educational centres and game-play venues.

Recently, the Superior Court of Justice of the Valencian Community (TSJCV) submitted a consultation to the Court of Justice of the European Union (CJEU), to evaluate whether the stipulated distances in Valencia (500 metres between gaming halls and 850 metres from educational centres to gaming halls) possibly unfairly disadvantage private companies, and whether they comply with the principles of freedom of establishment and freedom to provide services, as defined by the European Union.

The implications are profound, with four appeals lodged by gaming sector business associations against these measures held in suspension. The path forward lies in the hands of the CJEU, whose verdict on the TSJCV’s query is eagerly awaited.

Advertising

As a consequence of the approval of the Royal Decree on commercial communications for online gambling activities at a federal level in 2020, most of the regions in Spain announced their intention to proceed with the adaptation of their regulations to that Royal Decree. Valencia is the region with the most restrictive regulation on gambling advertising and, as a result, any type of gambling advertising or promotional activity has been prohibited.

Spanish gambling regulation does not distinguish between B2C and B2B licences, nor between the law applicable to the operations of one operator and another.

The definition of “gaming operator” states that an operator needs to obtain a licence in Spain if it:

  • conducts, either wholly or partly, gambling activity, and its income is linked to gross or net revenue, commissions and any other amounts related to gaming services; and
  • concurrently undertakes any commercialising gambling activity, such as:
    1. determining the prizes for tournaments;
    2. managing players’ rules, transactions and payment settlements; and
    3. managing the gaming platform or the registration of users.

Entities that meet the above requirements and also manage gaming platforms in which they are members, or that other gaming operators join, pooling together stakes coming from their respective users, will be considered as gaming operators and gaming co-organisers.

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

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

Consequently, the inclusion of a B2B operator within the definition of a gaming operator, and its requirement to be licensed, depends on the services that said operator intends to provide within Spain, along with the conditions related to that service.

In practical terms, experience has shown that the Spanish regulator understands that a B2B company falls under the definition of “gaming operator” only in exceptional circumstances, such as when offering network jackpots, offering shared 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 long as they do not register clients or maintain an agreement or gaming account with them.

White-label arrangements in a B2B scenario are permitted provided the provider operating behind the website is duly licensed, since in this case the B2B operator is categorised as a “gaming operator”. The new regulation on advertising establishes a new requirement by which an operator is prohibited from using brands or trade names that are not owned by said operator or by the business group to which such operator belongs, to identify and differentiate itself from other operators.

In addition to this, depending on the activity developed by the white-label operator (which provides the look and feel), an entity may also be categorised as a “gaming operator”. Consequently, it may also be subject to licensing.

Royal Decree to Regulate the Development of Safer Gambling Environments

Upon examination, among the most relevant changes implemented by Royal Decree 176/2023, of 14 March, it is crucial to highlight the introduction of new categories of players (ie, young players and intensive players). Alongside those exhibiting risky behaviours, these categories have become the prime focus of the regulator’s augmented protective measures.

Central to these adjustments is an array of notifications which operators are obligated to supply at specific intervals – for example, when certain predetermined thresholds or events are reached. The key objective is to ensure that participants have access to the necessary information to formulate educated judgements ahead of time and allow them to rectify their behaviour.

Additional noteworthy amendments include prohibitions placed on the aforementioned groups of participants, ranging from a ban on using credit cards to the prohibition of accessing VIP schemes and a restriction on receiving commercial communications.

Draft Law for Introducing a System of Joint Deposit Limits

On 1 September 2023, the DGOJ initiated a public consultation period on the draft Royal Decree that will amend Royal Decree 1614/2011, of 14 November, developing the Gambling Act 13/2011, on Licences, Authorisations and Gaming Registries, aimed at implementing a system of joint deposit limits.

The proposed modification is designed to establish a financial restriction on the cumulative deposits that an individual participant can submit across all gaming accounts associated with any of their user registries held with licenced gambling operators. This proposal aims to enhance the protection provided to participants holding gaming accounts with multiple operators.

Additionally, the document acknowledges the need to update certain key aspects of Royal Decree 1614/2011 due to the significant time that has elapsed since its establishment. Thus, the DGOJ will use this opportunity to revise Annex I of the Royal Decree, particularly regarding the amounts and legal form of the establishment of guarantees by gambling operators.

The period for public consultation, allowing the public to participate by offering suggestions, concluded on 16 October 2023.

Draft Resolution Approving the New Data Model and Modifying Annexes I of Two Resolutions

On 7 July 2023, the DGOJ initiated a public consultation period on the draft Resolution approving the new Data Model and modifying Annexes I:

  • of the Resolution of 6 October 2014, which approves the provision that develops the technical specifications with which gaming, traceability, and security that non-reserved gaming technical systems subject to licences granted under Law 13/2011, of 27 May must comply; and
  • of the Resolution of 12 July 2012, which approves the provision that develops Articles 26 and 27 of Royal Decree 1613/2011, of 14 November, regarding the identification of participants in games and the control of subjective prohibitions on participation.

The purpose of these modifications is to adapt the existing Resolutions to recent regulatory changes, most notably, the Royal Decree on Gambling Advertising and Responsible Gambling, which have imposed additional obligations onto operators which could be monitored by the DGOJ, through the introduction of the necessary changes to the data model of the monitoring system.

Among the numerous modifications proposed, amendments include the removal of the requirement for the ICS operator’s data storage to be based in Spain, allowing to be established anywhere in the EU, and the reduction of the ICS data retention period from six to four years.

The consultation, in which the public could participate with suggestions or concerns, concluded on 7 September 2023.

Draft Law Regulating Customer Services

On 27 April 2023, the Spanish Council of Ministers approved the draft law regulating customer services, the main objective of which is to alleviate the deficiencies detected in the provision of this type of service by large companies and to better safeguard consumer rights.

The draft law arises from numerous consumer complaints centred around inefficient customer service, typically within larger entities. This regulation, also foresees the possibility that small and medium-sized companies and financially struggling companies will not be affected by the regulation, as they are not the main generators of these complaints. Notably, some online gambling operators, determined by annual income, may fall under this regulation. The draft law encourages consumer rights and establishes base-line quality standards for customer services across sectors including utility providers, transportation, postal services, conditional access to audiovisual media and electronic communications services. Companies are expected to maintain satisfactory services to inform, handle, and resolve customer complaints.

The regulation does not contain specific technical measures to protect consumers from unlicensed operators. However, the DGOJ is entitled to request that internet service providers and financial entities 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. Indeed, the DGOJ has committed to continue intensifying the existing policy of domain name system (DNS)-blocking and monitoring payment traffic to identify the main black-market operators targeting the Spanish market.

Somewhat related to the above, the most recent modification of the Spanish Gambling Act incorporated the following new types of infractions:

  • a minor infraction consisting of the participation from Spain, through the use of Spanish territorial IP address masking techniques, in gambling activities offered through websites other than those legally authorised by gambling operators with a licence in Spain; and
  • a serious infraction consisting of promoting or facilitating the participation from Spain in gambling activities through websites other than those legally authorised by gambling operators with a licence in Spain.

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, and some land-based operators apply additional responsible gambling measures in their businesses, at their own initiative.

Key requirements include the prohibition of loans to players, the need to provide clear and accurate information to participants, accessible customer service for player complaints, and the facilitation of a customer support hotline by online operators at the federal level. Operators are also obliged to inform players about the General Register of Gambling Access Bans (RGIAJ) and offer self-exclusion options. Responsible gambling tests are also mandatory to detect potential gambling issues.

In this sense, the regulation of gambling activities requires the following:

  • Identification of participants – operators must establish systems and mechanisms that allow the identification of the participants in the games. This is a measure applicable to online and land-based operators.
  • Deposit amount limits by default – this is a preventative measure and a mandatory requirement for online operators licensed at the federal level. Also applicable to land-based businesses such as casinos. However, “default limits” can be reduced by the participant at any time and be 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.
  • Particular requirements for slot games – for example, a minimum duration approved for the slot spin on land-based terminals (eg, five seconds in Madrid but three in the Basque Country and online).
  • The regulation applicable to online gambling at federal level establishes specific responsible gambling requirements for the games grouped under the “Other games session” where players must configure their session before its start, including a limit for the time and money to be spent- and in-play betting products -a special rule regarding the amounts to bet-.These new requirements were enforced by the Royal Decree 176/2023 and will enter into force on 14th of March of 2024.
  • The regulation applicable to online gambling at the federal level also sets forth the obligation for operators to establish mechanisms and protocols that make it possible to detect risky behaviours in registered players.

As explained in 6.5 Recent or Forthcoming Changes, the expected new Royal Decree 176/2023 on safer gambling environments was finally published on 14 March 2023.

The regulation includes the introduction of two new subcategories within the existing grouping of vulnerable participants. The first of these subgroups includes young participants below the age of 26. The second defines “intensive players” as per the DGOJ’s specifications, that is, individuals who have incurred net losses exceeding EUR600 for three consecutive weeks. As it pertains to young participants, net weekly losses for intensive players are those that equal or surpass EUR200 for three successive weeks.

Other distinctive constraints introduced by the DGOJ for these vulnerable groups include a credit card usage ban for intensive players and those exhibiting risky behaviour; barring access to VIP schemes for younger and risky players and limiting the extent of commercial communication for this latter group.

The main focus of the regulator during this regulation’s development has been its commitment to providing a comprehensive protective framework for all players and an advanced model offering users additional tools in order to be aware of their gambling habits and the options at their disposal. This concern is expressed in the implementation of measures such as the amplification of mandatory messages that operators must send to users under various circumstances. For instance, their classification as part of a vulnerable group, information on their gambling patterns, and in-session games allow users to maintain a thorough understanding of their gambling habits, time spent playing, and money expended.

Other proactive initiatives include the introduction of a new role, “the RG officer” tasked with overseeing the safe gaming regulations put into practice by the operator, the addition of the operator’s active measures plan on RG, and emphasising the compulsory staff training obligations regarding safe gambling imposed on gambling operators.

Additionally, this regulation has included a requirement to set up the gaming session with spending and time limits for all the games grouped under “other games” with the exception of poker tournaments due to their unique characteristics. This is a deviation from the previous regime, which applied these limits solely to slot games.

As detailed throughout 7. Responsible Gambling (RG), Also Known as Safer Gambling (SG), the Spanish authorities have created different tools for operators and citizens in order to promote responsible gambling.

RGIAJ

Through an inscription in the RGIAJ, an individual is fully prohibited from accessing gambling activity (applicable to online and land-based gambling). The register is formed of the data of citizens that voluntarily do not wish to exercise their rights to gamble and of those that are declared incapacitated by a legal ruling.

Player Verification Service

The DGOJ offers online operators a tool to proceed with the ID verification of their customers resident in Spain. Operators can also check whether the customer is registered with the RGIAJ with this tool, and whether the data provided by the customer corresponds to a minor or to individuals included in the Civil Registry as deceased.

Phishing Alert

The DGOJ has launched a service addressed to all citizens in order for the operator to detect and communicate an attempt of activation of a user registration when the identity data provided matches the data of an individual who is registered with this service.

No specific AML guidance relevant to the gambling sector is available in Spain, nor has anything been published in this regard by the DGOJ or 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 28 April, on the prevention of money laundering and terrorist financing, and Federal Royal Decree 304/2014, of 5 May, developing the regulation of the Spanish AML Act.

No recent changes have been published on this subject.

The Spanish AML regulation establishes the instructions, proceedings and duties that online and land-based gambling operators need to apply for the prevention of money laundering.

The main requirements and obligations are as follows:

  • Approve a suitable manual for the prevention of money laundering and ensure its availability to SEPBLAC.
  • Apply due diligence measures as per the Spanish AML Act, when a customer engages in transactions amounting to EUR2,000 or more – in a single operation or multiple linked operations – either 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 thorough monitoring, investigation into the nature and intention of the business transaction, and not merely customer ID verification.
  • For land-based casinos, ensure the identification and documentary verification of individuals seeking to enter the establishment. Records of the collected documentation must also be maintained. These establishments must also identify individuals intending to conduct specific transactions including the exchange of chips for cheques, funding of transfers at customer request, and issuing of certificates regarding customer gains.
  • Maintain records of the documentation gathered for compliance with the Spanish AML Act for a period of ten years, after which the records should be eliminated. Five years after termination of business relationships with the customer, the documentation should only be accessible to the operator’s internal control bodies , including its technical prevention units and the legal defence personnel.
  • Appoint a representative on behalf of the operator before SEPBLAC.
  • Establish an adequate internal compliance unit responsible for implementing the AML policies and procedures.
  • Report suspicious transactions and collaborate with SEPBLAC.
  • Approve a yearly training plan for employees, which must be approved by the internal control body.
  • Undergo an annual external expert review 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 the federal level, the DGOJ supervises compliance with the applicable advertising rules by the gambling operators and sanctions them if they breach those regulations. For audiovisual communication service providers rendering services to gambling operators, the authority to launch proceedings and sanction lies not only with the DGOJ but also with the National Commission of Markets and Competence (CNMC).

Article 2 of General Advertising Law 34/1988 defines advertising 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”.

Royal Decree 958/2020, of 3 November, on commercial communications for gambling activities defines commercial communications as “any form of advertising carried out by a natural or legal person, public or private, disseminated through any media or format, meant to promote, either directly or indirectly, the gambling activities defined within the scope of application of Law 13/2011, of 27th May, or the entities that carry out such communications. Broadcasting of game draws or the purely informative dissemination of their results shall not be considered commercial communications”.

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

Operator Licensing

Gambling operators must be duly licensed by the regulator to advertise their products. According to Article 7.1 of the Gambling Act, to carry out gaming activities on audiovisual programmes, news media or websites, gaming operators must have an authorisation (ie, the corresponding gambling licence). The same is true at regional level.

Advertising Providers’ Requirement to Check Licensing

Any advertising third-party provider must confirm that its client (gambling operator) is duly licensed according to Article 7.3 of the Gambling Act. This involves verifying that the advertiser, whether a media entity or service provider, confirms their client’s legitimate licensing from the DGOJ. Infringements in the Gambling Law fall into two categories:

  • unauthorised promotions, sponsorships, advertisements, or intermediary actions concerning games under this law, regardless of methods used, and breaches in compliance with permit conditions and existing rules; and
  • the failure to fulfil requirements for information or cutting off the provision of services as required by the DGOJ and directed towards payment service providers, audiovisual 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 of between EUR100,000 and EUR1 million and to the suspension of activity in Spain for a maximum period of six months.

Each autonomous region individually approves sanctions for regional land-based and online gambling.

Key Legislation

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

  • General Advertising Act 34/1988, dated 11 November;
  • Royal Decree 958/2020, dated 3 November, on commercial communications for gambling activities;
  • Unfair Competition Act 3/1991, dated 10 January;
  • Legislative Royal Decree 1/2007, dated 16 November, approving the recast 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 11 July;
  • General Audiovisual Communications Act 13/2022, dated 7 July;
  • Gambling Act 13/2011, dated 27 May;
  • regional gambling regulations for land-based and online gambling at a regional level; and
  • the Code of Conduct Regarding Commercial Communications of Gambling Activities issued by Autocontrol (the Association for Advertising Self-regulation), although this is only binding for companies that adhere to it.

Restrictions

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

The present restrictions on gambling advertising aim to shield consumers. The main principles include legality, honesty, identification, veracity, societal responsibility, responsible gaming, underage protection, especially enforcing restrictions during watershed hours.

Royal Decree 958/2020 on commercial communications of gambling activities was introduced and implemented on 4 November 2020, following publication in the Official Spanish Gazette. Its regulation and requirements entered into force mostly throughout 2021.

The most relevant restrictions implemented by this Decree applicable to the online gambling sector include:

  • sponsorship bans on shirts or sports equipment;
  • restricted commercial communications on audiovisual media services between 1am and 5am;
  • internet gambling advertising limitations, except for sites exclusively providing gambling or sports information;
  • specific requirements for advertising on social media and affiliate platforms;
  • prohibited commercial communications with well-known public figures;
  • prohibiting welcome bonuses and promotions to attract new customers;
  • conditions for promotional offers to existing customers – these can only be offered after 30 days of registration and documentation verification;
  • limited commercial communications of promotional activities, only allowed for existing customers, or in a separate section on the website or application from which the operator offers gambling activities, or in commercialised lottery game establishments; and
  • a requirement stating that free-to-play demo games must be linked to the operator’s platform and are only available to registered and documentarily verified users.

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

In terms of advertising for online gambling regulated at the federal level, Articles 40 d) and e) of the Gambling Act state the relevant applicable infractions, which are subject to the same sanctions:

  • a fine of EUR100,000 to EUR1 million; and
  • the suspension of activity in Spain for a maximum period of six months.

Following its entry into force, the Royal Decree on commercial communications for gambling activities was challenged before the Spanish Supreme Court by key stakeholders such as the Spanish Association on Online Gambling (Jdigital), the Information Media Association and the Football League. This controversy led to the decree’s scrutiny by the Spanish Supreme Court on 20 July 2022, which questioned the constitutionality of Article 7.2 of the Spanish Gambling Act. This article, which governs the boundaries of gambling advertising, was compared to Article 53.1 and Article 38 of the Spanish Constitution, which mandate legislative regulation and guarantee the right of free enterprise, respectively. The Constitutional Court is set to scrutinise the legality of Article 7.2, critically affecting the decree’s validity. However, no resolution is expected within the next year, with the Supreme Court’s final judgment pending the Constitutional Court’s decision. Despite the ongoing dispute, the decree remains binding.

Furthermore, General Audiovisual Communications Act 7/2010 was repealed and replaced by Act 13/2022 on the 7 July 2023, which, among other restrictions, confined commercial advertisements on audiovisual media service to between 1am and 5 am. This rule aligns with the controversial decree’s significant restrictions on commercial gambling communications.

Acquisitions and changes 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 at 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), then the operator company will not only have to notify the regulator of the change of control (within one month 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 to ascertain any possible concerns it might have regarding the transaction.

The relevant threshold is set around the concept of the “significant” shareholder, which 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 made for passive investors.

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

Economic sanctions may be enforced through the exercise of the relevant guarantees submitted by the operators before the regulator to cover their liabilities and potential consequences that arise as a result of a breach of their obligations as operators. If these guarantees are not enough to cover a certain liability, the sanctions imposed by the regulator could be enforced through common civil remedies (the seizure of assets, goods, shares, deposits, etc).

Additional sanctions such as activity suspension and limitations on licence applications may be directly imposed by the regulator or the Ministry of Tax for severe infractions, without requiring further measures beyond the sanction’s announcement.

Since Q2 2022, the DGOJ has published any “serious“ and “very serious” sanctions against online operators on its website.

As mentioned in 11.2 Sanctions, financial penalties are normally first 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 are not sufficient to cover the relevant liability.

On 16 November 2023, left-wing parties were elected again in Spain. With this, a series of changes have taken place in the government, including changes in the Ministry of Consumer Affairs, which is directly responsible for the DGOJ.

First of all, it should be noted that Mr Alberto Garzón, until now Minister for Consumer Affairs, has been replaced by Mr Pablo Bustinduy. The new Minister is known for having participated in the creation of the political party Podemos (which espoused an extreme left-wing ideology) and is now a sympathiser of the political party Sumar (also a party of the far left). Another notable change is the disappearance of the Ministry of Consumer Affairs itself and its integration within the Ministry of Social Rights and Agenda 2030. Therefore, the DGOJ is now under the umbrella of the new Ministry of Social Rights, Consumer Affairs and Agenda 2030.

For this new legislature, the programme of the Ministry foresees the approval of several laws, including the law on general contracting conditions and the law regulating customer services, which failed to be approved by the last legislature. On this basis, no major changes are expected in the future of the Ministry and in terms of the gambling industry, as both the former and current Ministers have a similar political approach.

Barring any surprises, the current regulator at the DGOJ, Mr Mikel Arana, will be replaced in the next few months.

The tax rate for online gambling at the federal level, subject to the Gambling Act, is 20% on GGR or the total amount of money wagered minus the amount won for all gambling products. This tax rate is 10% on GGR if the licensed operator at the federal level is domiciled in Ceuta or Melilla.

The tax rate for online gambling at a 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 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; and
  • 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:

  • 22% if the tax base is less than EUR2 million;
  • 30% if the tax base is between EUR2 million and EUR8 million;
  • 35% if the tax base is between EUR8 million and EUR15 million; and
  • 40% if the tax base is more than EUR15 million.

In Andalusia, for instance, the applicable tax rates are as follows:

  • 15% if the tax base is less than EUR2 million;
  • 35% if the tax base is between EUR2 million and EUR3.5 million;
  • 48% if the tax base is between EUR3.5 million and EUR5 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 depends on the applicable regulation, but the fee generally ranges from EUR3,000 to EUR4,000 per year for terminal type B/AWP and from EUR4,000 to EUR5,500 per year for terminal type C/casino machines.

On 16 November 2023, left-wing parties were elected again. Following this, a series of changes have taken place in the Spanish government, including changes in the Ministry of Consumer Affairs, which is directly responsible for the DGOJ.

First of all, it should be noted that Alberto Garzón, until now Minister for Consumer Affairs, has been replaced by Pablo Bustinduy. The new Minister is known for having participated in the creation of the staunchly left-wing political party Podemos and is now a sympathiser of the political party Sumar (also of the extreme left). Another notable change consists of the disappearance of the Ministry of Consumer Affairs itself and its integration within the Ministry of Social Rights and Agenda 2030. Therefore, the DGOJ is now under the umbrella of the new Ministry of Social Rights, Consumer Affairs and Agenda 2030.

For this new legislature, the programme of the Ministry foresees the approval of several laws, including the law on general contracting conditions and the law regulating customer services, which failed to be approved in the last legislature. On this basis, no major changes are expected in the future of the Ministry and in terms of the gambling industry, as both the former and current Ministers have a similar political approach.

Barring any surprises, the current regulator at the DGOJ, Mikel Arana, will be replaced in the next few months.

Asensi Abogados

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info@asensi.es www.asensi.es
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Trends and Developments


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Asensi Abogados is a boutique law firm specialising in the gaming and gambling sector. It represents and advises a large number of international gaming companies with interests across the Spanish and Latin American markets. The firm works for the largest online betting and casino operators, software providers, skill games operators, affiliates and payment solution providers, as well as land-based operators, slot-machine manufacturers and suppliers. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Digital Gaming Association (Jdigital). A team of two partners and nine associates operates in Spain, while the Colombian office is composed of one partner and three associates. Recent work carried out by the firm includes licensing procedures at the online and land-based levels, providing detailed advice on the practical application of the new regulatory developments for online operators in Spain and assisting international operators in relocating to Ceuta and Melilla, Spain’s two gambling business-friendly jurisdictions.

Gaming Law in Spain: an Introduction

In recent years, Spain has witnessed a significant transformation of its gambling sector. What was once an attractive, competitive and – one could even say – exemplary industry, has undergone a fundamental shift, largely driven by the adoption of new regulatory restrictions by the government, pushed by populist and left-wing political parties.

The government has taken substantial measures to assert greater control over the gambling industry, primarily fuelled by concerns about the social and public health implications of excessive gambling. However, as this article will explore, the proposed solutions do not always align with the intended objectives and with the actual problem experienced by the market.

A particular focus will be the most recent regulatory development, namely the Royal Decree aimed at creating safer gaming environments and examining potential future implementations.

Additionally, this article will explore the rising trend of fraudulent practices within the gambling sector, commending the remarkable efforts of Spanish organisations dedicated to combating these illicit activities and shedding light on their critical role in preserving the integrity of the industry.

In the ever-evolving landscape of gambling regulation and given the emerging challenges, the authors aim to provide insights into the current state of the Spanish gambling industry, assess the impact of recent regulatory changes, and offer a glimpse into what the future may hold for both operators and players in this dynamic sector.

Entry into force of Royal Decree 176/2023 of 14 March on the development of safer gaming environments

Even though the Spanish gambling market has numerous measures and requirements through the gambling regulations that are aimed at ensuring a safe environment for consumers in the gambling industry, a new regulation in the form of a Royal Decree was approved on 14 March 2023 and came into force on 15 September 2023.

It is worth mentioning that this regulation has been adopted barely three years after the entry into force of Royal Decree 985/2020 on commercial communications for gambling activities, which changed the rules of the game as far as gambling advertising was concerned, introducing a significantly more restrictive regulatory framework for the advertisement of online licensed gambling operators in Spain. Therefore, the latest regulations make the government’s interventionist and restrictive will more than clear.

Although this Royal Decree has only been in force for two months (and part of its articles and provisions will not enter into force until next year), it is already possible to discern the industry’s first impressions.

While the primary goal of the Royal Decree is to protect players and prevent addictive behaviour, it has generated significant concerns and criticisms within the industry due to the overprotection of the player and the significant operator intervention in the player’s gambling journey. Some of the noteworthy and commented upon measures are summarised below.

Gaming session configuration under the “other games” general licence

This set-up requirement previously existed solely for slots and has now been extended to the general licence for other games. The players, before commencing the “other games” session, shall establish the maximum time they are willing to spend and the maximum amount by which they are willing to deplete their gaming account over the course of that session.

Identification of participants with intensive gambling behaviour

This is understood as participants who have incurred weekly net losses of EUR600 or more for three consecutive weeks. In the case of young participants – a category described in the following paragraph – weekly net losses must be equal to or greater than EUR200 for three consecutive weeks. Those players displaying intensive gambling behaviour will receive specific messages, along with a monthly summary of their activity. These players will also face restrictions on the use of credit cards.

Definition of young participants

Gamblers aged 25 or younger are categorised as young participants. For them, operators must display specific messages during the gaming session and employ various means to inform them of the associated risks of gambling, particularly at a young age. Furthermore, these participants must be excluded from receiving the specialised attention/marketing services aimed at an operator’s privileged clientele or from receiving any type of promotional activity whose object is unrelated to the gaming activity carried out on the operator’s platform.

Risky behaviour participants

Although the regulation still does not provide a definition of such participants (the Spanish gambling regulator, Dirección General de Ordenación del Juego – DGOJ, is currently developing an algorithm to unify a definition and criteria that is intended to be in place by September 2025), it does state that operators must establish mechanisms for detecting participants displaying risky behaviours and are obliged to report annually to the regulator on the implemented protocols and the total number of affected individuals. This group will not receive promotions and cannot be contacted by VIP services. Commercial communication to this group is effectively prohibited. Additionally, only nominative payment methods under the account holder’s name are permitted, with the use of credit cards being prohibited.

Emphasis on self-exclusion and self-prohibition

The Royal Decree places emphasis on participants who have exercised their right to self-exclusion or self-prohibition. Players who register in the General Registry of Access Bans to Gambling (RGIAJ) will have their activities suspended and will not receive commercial communications. The promotion of self-awareness is also encouraged, with specific messages sent to promote players’ awareness of their own gambling activity.

Obligation to address diverse messages to users

As discussed in the previous paragraphs, this new regulation incorporates a significant number of messages that players should receive before, during and after the gaming session, which is bound to affect their gambling experience. First, as soon as registering on the operator’s platform, users should receive, within 24 hours, a message containing basic responsible gambling information. During the gaming session, the user must receive, at least once every 60 minutes, periodic informative messages that must be read in order to continue playing. Additionally, operators must, at least every three months, inform users about accessing their monthly activity summaries (this shall be monthly for players displaying intensive behaviour). In addition, the frequency and intensity of messages will vary depending on the categorisation of the player (ie, as a young participant, with intensive or risky behaviour, self-excluded or self-prohibited).

Potential Disadvantages of Royal Decree 176/2023

While some of the measures introduced by the new regulation are reasonable and beneficial, others appear unnecessary, as the Spanish gambling market, since its approval back in 2011, has become increasingly healthy and safe due to the constant regulatory developments over the years. In this sense, operators have also embraced their commitment to players’ protection and, considering the experience gained by the market in recent years, they have implemented their own proactive responsible gaming measures. Furthermore, the figures in Spain are quite encouraging, with an approximate 0.3% of pathological gambling being seen among the whole population, indicating that the market has successfully evolved towards safer environments prior to the implementation of this Royal Decree.

Certain aspects of the regulation raise legitimate questions, explored below.

Single session for “other games”

It is important to first make a brief mention of the measure concerning the single session for “other games” (not just limited to slots, as was the case before now). This measure may appear suitable and proportionate to combat overspending on games that fall under the general licence for other games, which includes slots, blackjack, roulette, bingo, baccarat, and poker (excluding tournaments), since it compels players to limit their spending and overall time across all games within the session. However, since this measure demands technical implementation for operators, it will enter into force on 15 March 2024. Therefore, observers will have to wait to see if this measure truly fulfils its intended function.

Intensive gambling behaviour

Turning now to the measures that are already in place and which could be questionable, some have doubted the effectiveness of the introduction of a new category in the gambling sector, namely participants with “intensive gambling behaviour”, a categorisation which is based solely on each player’s financial losses. This measure fails to consider the individual financial capacity of each player or the diverse forms of gambling that exist, as it ignores fundamental aspects of the very nature of gambling.

This approach, focused solely on financial losses, oversimplifies a complex issue. Gambling behaviour varies widely, and the extent of financial losses may not necessarily indicate a problematic gambler. A high-roller who loses significant amounts may have the financial means to do so without experiencing harm, while a moderate-income individual could be adversely affected by comparatively smaller losses.

While it is important to address problem gambling and protect vulnerable individuals, the introduction of this category may risk stigmatising those who gamble responsibly but happen to experience financial losses. A more nuanced approach that considers individual financial situations and the diversity of gambling forms could be more effective in identifying and assisting those truly in need while preserving the rights of responsible gamblers.

Young participants

Furthermore, the classification of players under the age of 25 as “young participants” is a noteworthy measure within the regulatory framework. Under this provision, these players will receive continuous messages highlighting the associated risks of gambling during their gaming session, which, compared to players  aged 26 and above, will mostly hinder their gaming experience.

While the intention behind this measure is to enhance awareness and promote responsible gambling among young individuals, it also comes with certain restrictions.

One significant restriction is that young participants must be excluded from receiving promotions unrelated to the gaming activity hosted on the operator’s platform. This means that marketing campaigns and incentives geared towards non-gaming products or services will not be accessible to them. Additionally, they will not enjoy the benefits of being part of the operator’s VIP clientele.

In conclusion, the classification of players under the age of 25 as “young participants” and the associated measures aimed at enhancing their awareness of gambling risks, while well-intentioned, should be scrutinised in terms of their impact on the industry. It is important to recognise that a significant portion of gambling activity comes from players aged 18 to 35; however, these measures, which are extremely restrictive, may inadvertently stifle the sector’s growth.

Moreover, according to the data provided by the DGOJ, on the profile of the online gambler in 2022, the average annual spending of players aged 18 to 25 is a modest EUR269, which means that it is a relatively small figure that does not warrant extreme alarm. This restrictive approach could deter young adults from engaging in legal and regulated gambling activities, potentially leading to unintended consequences such as a shift towards unregulated options or even the emergence of a thriving black market.

While protecting young individuals from gambling-related harm is of paramount importance, it is equally crucial to strike a balance that does not unduly harm the industry or create an environment where legal gambling becomes unattractive to this demographic. Regulatory adjustments and ongoing assessment are necessary to ensure that the measures effectively promote responsible gambling while preserving the industry’s vitality.

Regulatory burden

Finally, we can only reiterate the burden that the excessive sending of messages and other responsible gaming measures pose for both the operator and the user. These measures lack uniformity, as they vary depending on the player’s classification, which creates a constantly evolving challenge for operators. By way of example, and in order not to reiterate the above, operators have a 72-hour window to limit the use of credit cards by players with intensive behaviour while in the case of players with risky behaviour, this measure must be adopted within 24 hours.

In light of the aforementioned discussion, it becomes evident that existing regulations prior to the enactment of this Royal Decree already addressed significant issues such as players with risky behaviour – a term already introduced by Royal Decree 958/2020 on commercial communications for gambling activities. While these aspects are crucial for society and should be subject to ongoing review and improvement, it is necessary to question the need, efficiency and true motivation behind the restrictions introduced in the new regulations. Striking the right balance between safeguarding individuals and maintaining a thriving, responsible gaming industry remains a crucial challenge in the evaluation of these new regulations.

It is also worth mentioning that the restrictive measures imposed on online gambling often have parallels in the realm of land-based gambling, exemplified by recent developments such as the decision of the Superior Court of Justice of Valencia to refer a question to the Court of Justice of the European Union (CJEU) regarding whether the requirement of a minimum distances of 500 meters between gaming halls and 850 meters between these establishments and educational centres aligns with EU law, particularly in terms of principles such as proportionality, freedom of enterprise, and market unity.

This case highlights the need for a careful examination of whether such restrictions are proportionate to their intended goals and whether they inadvertently hinder legitimate business activities. The outcome of this CJEU referral will likely have broader implications for the regulatory landscape of gambling in Europe, providing valuable guidance on striking the right balance between social protection and market freedoms.

From the above it can be concluded that some of the provisions contained in this regulation along with the restrictions introduced by the Royal Decree on commercial communications for gambling activities (which not only introduced an almost total ban on advertising, but also the prohibition of welcome bonuses or promotions to attract new customers), and the fact that in such a highly regulated market there is a clear lack of regulatory updates in terms of market innovation and developments, are making the market look increasingly impoverished and unattractive, leading to a discouraging player experience, which will most likely and unfortunately result in players fleeing to the illegal market.

Joint deposit limits

In line with the recently approved regulation in Spain, other implementations are still to come into effect. Particularly noteworthy is the draft Royal Decree amending Royal Decree 1614/2011, of 14 November, developing the Gambling Act, in relation to gaming licences, authorisations and registries, for the introduction of a system of joint deposit limits per player.

The aim of this new regulation is to limit player deposits in a universal manner – ie, by establishing a system of deposit limits per player applicable to all operators licensed in Spain.

In Spain, deposit limits for online gambling operators are set by the Gambling Act, with a daily limit of EUR600, a weekly limit of EUR1,500 and a monthly limit of EUR3,000. This regime allows the player to lower the default limits set by the regulation at any time and immediately; however, in order to increase or remove them, the player shall go through a responsible gambling test established by the DGOJ and should not have engaged in risky behaviour during the last three months based on a historical analysis that the gambling operators make of the participant’s record. Furthermore, an increase in the limits set by the player may not be requested until a cooling-off period of three months have elapsed since the last increase.

Therefore, the current regulation sets individual deposit limits for each operator, allowing players to modify them within certain parameters. Any attempt to increase or completely remove the limit necessitates the player going through a series of responsible gambling measures.

While this current approach seems to strike a balance between personal choice and safeguarding players from excessive gambling risks, it is undeniably true that the proposed measure of joint deposit limits among operators appears logical and even ideal from the perspective of responsible gambling, with its primary aim being to assist players in managing their gaming behaviour and minimising potential harm resulting from excessive play through the limitation of deposit amounts.

However, the measure to be implemented in Spain has already been implemented in other countries where the results have not been as expected.

Germany, for instance, implemented a stringent joint deposit limit system in 2021, which has had profound effects on the market dynamics. Major global operators have found it increasingly difficult to operate profitably within the confines of these strict limits. The consequence of this has been that the market, once a thriving hub for online gambling, has now become marginalised even for industry giants.

A similar scenario has unfolded in Sweden, where the implementation of joint deposit limits has disrupted the market landscape. It has been found that players, frustrated by these restrictive limits, are now actively seeking unregulated operators as alternatives. This trend is worrisome as it diverts players away from the protective umbrella of regulated environments to the potentially riskier unregulated fringes of the market.

Therefore, while the intention behind joint deposit limits is laudable, regulators must consider the lessons learned from countries where it has been applied. Striking the right balance between protecting players and maintaining a competitive and sustainable gambling industry is a complex challenge that requires constant evaluation, and potential adjustments to the regulatory framework to ensure both objectives are met effectively.

Be that as it may, the draft Royal Decree in Spain has been submitted to a hearing and public information process, which ended on 16 October 2023, so its entry into force is not expected in the coming months. What the practical implications will be in practice remains to be seen.

Rising fraudulent trends: “mule betting accounts”

In Spain and numerous other jurisdictions, a pressing concern that demands attention is the rampant misuse of individuals’ identity data for unauthorised registration on gambling platforms. This alarming issue not only poses serious risks to personal privacy and financial security but also underscores the urgent need for comprehensive regulatory measures and heightened awareness.

One of the fastest growing activities in recent years is the use of so-called “mule betting accounts” by criminal organisations. The modus operandi of these accounts is receiving fraudulently obtained funds, which are subsequently transferred to other accounts, often overseas, making it nearly impossible to trace and recover the money after multiple transactions. Mule accounts have become the preferred tool for fraudsters, money launderers and others, enabling them to evade justice and perpetuate their crimes.

The issue of mule betting accounts has raised concerns within the Spanish gambling industry and among regulators. The Spanish government has taken proactive measures to combat this problem by implementing strict regulations aimed at preventing money laundering, fraud, and the manipulation of betting markets.

The prosecution of illegal gambling and match-fixing in Spain is mainly carried out by the DGOJ, which enforces the regulations to ensure the integrity and transparency of the country’s gambling sector. Within this bod, is found the Global Investigation Service of the Betting Market (SIGMA), a technical instrument that is constituted as an interactive co-operation network managed by the DGOJ and accessible by telematic means for the participating entities that have joined the service (eg, the state security forces and corps, the Higher Sports Council, sports federations, professional leagues and licensed gambling operators).

Additionally, in 2019, the National Commission to combat the manipulation of sports competitions and betting fraud (CONFAD) was created, which aims to provide a formalised channel for dialogue and co-operation between state public authorities, sports entities and gambling operators in order to prevent and eradicate corruption and manipulation of competitions and betting through co-ordinated action among its members.

Finally, it is worth mentioning the Spanish National Police Centre for Integrity in Sport and Gambling (CENPIDA). This body was established in response to European Union directives with the primary aim of providing a comprehensive response to the gambling sector. This is primarily driven by the concern that criminal organisations may exploit the gambling sector for their illicit activities, or that the sector itself may become a target of illegal practices, such as match-fixing. The CENPIDA is attached to the Central Service for the Control of Gambling and Betting of the National Spanish Police.

Recent law enforcement efforts have led to the dismantling of criminal organisations involved in match-fixing schemes aimed at defrauding sports betting companies. Specifically, the Guardia Civil (Spanish military police), as part of Operation Monybet, successfully disrupted a criminal group that used so-called “money mules”, individuals who lent their identities as bettors, enabling the organisation to amplify their profits. Some mules were compensated with a percentage of the earnings, while others received privileged information for making their own wagers.

Another remarkable achievement by Spanish agencies involved a joint operation conducted in collaboration with the National Police (CENPIDA), Europol and Interpol, in the Operation Mursal. This operation targeted an organisation engaged in manipulating sporting events through the use of satellite technology. Among the various methods employed by the organisation was the use of third-party identities to avoid raising suspicions among betting companies. Despite the substantial prize winnings, the organisation appeared to collect them through different individuals, adding an additional layer of complexity to their illicit activities.

These successful operations underscore the commitment of Spanish law enforcement to combatting match-fixing and fraudulent activities within the gambling sector. The collaboration between national and international agencies demonstrates a concerted effort to maintain the integrity of sports competitions and protect the interests of legitimate bettors and the betting industry as a whole.

Asensi Abogados

Avenida Jaime III, 1
Primera Planta
07012
Palma de Mallorca
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

Authors



Asensi Abogados is a boutique law firm specialising in the gaming and gambling sector. It represents and advises a large number of international gaming companies with interests across the Spanish and Latin American markets. The firm works for the largest online betting and casino operators, software providers, skill games operators, affiliates and payment solution providers, as well as land-based operators, slot-machine manufacturers and suppliers. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Digital Gaming Association (Jdigital). A team of two partners and nine associates operates in Spain, while the Colombian office is composed of one partner and three associates. Recent work carried out by the firm includes licensing procedures at the online and land-based levels, providing detailed advice on the practical application of the new regulatory developments for online operators in Spain and assisting international operators in relocating to Ceuta and Melilla, Spain’s two gambling business-friendly jurisdictions.

Trends and Development

Authors



Asensi Abogados is a boutique law firm specialising in the gaming and gambling sector. It represents and advises a large number of international gaming companies with interests across the Spanish and Latin American markets. The firm works for the largest online betting and casino operators, software providers, skill games operators, affiliates and payment solution providers, as well as land-based operators, slot-machine manufacturers and suppliers. Asensi Abogados has offices in Madrid, Mallorca and Bogotá, and is part of the Spanish Digital Gaming Association (Jdigital). A team of two partners and nine associates operates in Spain, while the Colombian office is composed of one partner and three associates. Recent work carried out by the firm includes licensing procedures at the online and land-based levels, providing detailed advice on the practical application of the new regulatory developments for online operators in Spain and assisting international operators in relocating to Ceuta and Melilla, Spain’s two gambling business-friendly jurisdictions.

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