The Spanish online gaming industry is currently considered by many as a test market, as it has different characteristics when compared to European regulated markets with different laws and procedures.

The regulation of the Spanish market started approximately a year and a half ago, so this is technically still an early-stage market with a model open to successive improvement and changes. As at October 2013, there are 51 licensed operators though not all of these have actually launched their products. These operators are holding back to review the best possible scenarios and instead focus on higher anticipated return products and regions. Consequently, Spain is currently operating a mixture of:

  • International Operators with a view to open a Spanish brand;
  • National Land Base Operators: Bingo, Casino, Poker and Slot machine Operators;
  • Media Communication Groups with a view to enter the online gaming market.

Many expect that the gaming sector will undergo some change in the upcoming months, namely:

  • Partnership between Operators, with the objective to reduce CapEx and thus exploit mutually competitive advantages;
  • New products regulation, such as Betting Exchanges and Online Slots;
  • Increased competition between Operators granted a National License, and those granted a Regional License;
  • A gradual expansion in product variety across land-based outlets such as kiosks, restaurants and betting shops;
  • Media agencies offering new products for online gaming.

Seeing as most of the Spanish operators have had to build their online offering effectively from the ground up, this has resulted in a number of unforeseen challenges that have contributed to delays in launch, and subsequent losses. One of the most significant challenges was the first-time integration between various gaming platforms, including Mediatech, BetWare, Microgaming and Playtech, which in some cases are still not working properly together. Conversely, most of the international operators have had significant integration experience and thus did not experience such issues.

Affiliate revenue is also a significant contributor to the Spanish operators. A NetRefer report on the state of the Spanish Market estimates that affiliates contribute as much as 44% to operator turnover. This figure could well increase in the near future as more operators seek to introduce attractive affiliate partner programs.

With regards to regulation, the Spanish Authorities (DGOJ) are using all the methods at their disposal to shut down illegal gaming sites, but this is not an easy task as it is impacted by the Laws on International Legislation and European Environment. The Ministry of Economy’s “Agencia Tributaria” department, has a remit to regulate and control revenue collection, and is increasingly more stringent with Operators, Players and all intermediate channels such as affiliates, super-affiliates and representatives.

For more information on the state of Spanish legislation, and how NetRefer can help operators regulate their affiliate invoicing and taxation, kindly contact your NetRefer account manager or come meet us at BAC later this month.