Spanish Online Market Grows, Some Operators Grumble

Unlike in France, Spanish online gambling operators are not turning in their licenses in droves. Yet. But there are many unhappy campers out there just half a year after changing the Spanish gambling laws.

Fifty-three operators have been licensed since online gambling was legalized last year, but some are already considering calling it quits. The reasons are pretty much the same as in France: too much regulation and too high taxes equal too low profitability.

The 25% tax levied on gross gambling revenues is seriously affecting the operators’ profitability, raising the prospects of many of them leaving the country. This has not deterred the government, which hopes to reinforce its budget with millions of Euros in gambling taxes. Last year the government took in EUR 140 mln and hopes to increase it to EUR 160 mln this year.

Before they could be awarded a license, some companies were also required to pay back taxes for those years when they had served Spanish players from abroad.

Nevertheless, the Spanish online gambling market is a lucrative one, with a EUR 2.3 bln industry revenue in 2012, generated by one million users.

The single largest online gambling activity is the sale of lottery tickets, which 69% of the visitors engaged in, followed by the 52% who bet on sports in Spain.

The leading source of revenue, however, is not the legion of lottery buyers, but those 40% of gamers who play at Spanish poker rooms. They were responsible for 41% of the revenue, while those who wanted to bet on sports generated 37%.

Since online gambling makes up a “mere” 17% of the whole Spanish gambling market, there is still ample opportunity for its share to grow. While regulation may be fine tuned, the government does not perceive the tax rate to be an obstacle to growth at this stage.