The generally accepted legal definitions of gambling concepts in Spain are set out in Law 13/2011 on gambling, as amended (the Gambling Act), which is the primary piece of legislation governing the state-wide gambling sector in Spain.
Gambling is defined as any activity in which money or economically valuable goods are at stake over future and uncertain results that to some degree depend on chance and that allow the sums to be transferred between the participants, regardless of whether the level of skill of the players is decisive in the results or they depend wholly or fundamentally on luck, stakes or chance. The results must be 'future' (thus excluding past facts) and no minimum degree of chance is required (as a result, to the extent that there exists any chance, an activity is considered gambling even if there is a significant skill component).
As regards the main actors of the gambling market, 'operators' and 'participants', are defined as follows.
'Operators' may be legal or natural persons, as the case may be, of Spanish nationality or of a nationality of any European Economic Area (EEA) Member State with a permanent representative in Spain. However, only limited liability companies are allowed to participate in the public tender for the awarding of general licences for the operation of non-occasional games. The corporate purpose of such entities is limited to the organisation, marketing and operation of games.
The Gambling Act limits the possibility of providing occasional and non-occasional gambling activities to legal and natural persons who fall within the prohibitions set forth in the Gambling Act or the laws of the autonomous communities governing these matters. The Gambling Act imposes obligations on gambling operators to deposit bank bonds or another type of security in order to guarantee compliance with the obligations established in the Gambling Act. In order to protect consumers and guarantee responsible gambling, operators are not allowed to grant loans or any other credit or financial assistance to participants in gambling activities.
The Gambling Act does not define the concept of a 'participant', but nevertheless identifies the rights and obligations of participants in gambling activities. The Gambling Act confirms that the relationship between gambling operators and participants is subject to private law; therefore, any dispute between operators and participants must be resolved through civil courts, notwithstanding the regulator's sanctioning powers and arbitration functions.
The Gambling Act defines four specific types of game (lotteries, betting, raffles and contests) and one general category ('other games') that serves as a catch-all for activities that fall under the general definition of gambling but not under any of the four specific games definitions.
Betting is a gambling activity in which money is at stake over results of a previously determined event with an outcome that is uncertain and alien to the betters. The following types of betting are regulated and permitted in Spain:
- 'pool betting' or 'mutual betting', where a percentage of the bets placed is distributed among the winners;
- 'fixed-odds betting', where the better bets against the gambling operator and the prize is the result of multiplying the amount bet for the odds previously fixed by the operator; and
- 'exchange betting', where the operator acts as a broker and guarantor ensuring that the bets placed between betters are duly performed, and subtracts the fee previously set by the operator for its services.
Contests are games, the offer, development and resolution of which are carried out via telecommunications media (e.g., television, radio, internet). In this type of game, the right to win the prize requires any form of payment by the participant, which may consist of telephone calls, sending text messages or any other electronic procedure. If there is no payment by the participant, the activity is not regarded as a contest. The fact that a skill component is involved in addition to chance is irrelevant; the activity would still be considered a contest.
Lotteries are a gambling activity in which prizes are awarded in cases in which the number or combination of numbers or signs stated on a ticket, coupon or electronic equivalent coincides in whole or in part with that produced by way of a draw or event held on a previously determined date or, in the case of instant or pre-sorted lotteries, at a prior time.
Betting on the results of lottery draws is not regulated. As not-specifically-regulated games are deemed to be prohibited, this type of bet would also be prohibited.
Raffles are games consisting of the award of a prize upon holding a draw or selection by choice between the acquirers of tickets, coupons or electronic equivalents, the acquisition of which is made upon payment of a price. The prize cannot consist of money.
Other games are defined as any games that do not fall under the definitions of lottery, betting, raffles or contests, such as poker or roulette, where there is a chance component and money or goods are at stake.
Spanish law does not recognise the concept of 'skill games'. If games involve any degree of chance, they are deemed 'contests' or 'other games', as explained above, and their operation would require an administrative licence.
Although there is no express legal definition or reference made in connection with fantasy leagues, they are considered as contests and fantasy operators require an administrative licence to offer fantasy league services in Spain.
Additionally, free prize draws in Spain are categorised as 'random combinations with advertising or promotional aims' and defined as raffles aimed exclusively at advertising or promoting a product or service for which participation there is no payment whatsoever by the participant, other than the price that, as the case may be, the participant paid for the acquisition of the promoted product or service. No licence is required for performing these activities, although gambling tax is levied as explained in Section V, below.
The Gambling Act does not expressly exclude speculative and hedging financial products from its scope. However, the offering of these products is generally subject to licences from other regulatory authorities in Spain and there have been no public or significant cases or controversies as to whether the provision of these financial products could be construed as gambling.
ii Gambling policy
At a national level in Spain, any sort of game within the scope of the Gambling Act that is not specifically regulated by the Ministry of Finance and Taxation is prohibited. The fact that a game is defined under the Gambling Act is not sufficient for it to be considered permitted, and specific regulations are required for each particular game by the Ministry of Finance and Taxation. In addition to these regulations, each operator must obtain a 10-year general licence for the general category of game (betting, contests or other games) and one- to four-year special licences for the operation of a specific game, as detailed below.
At a regional level, the policy is similar. Each of Spain's 17 autonomous communities is free to set its gambling policy. The general default rule is that gambling is forbidden unless previously authorised by the regional government of the specific autonomous community.
iii State control and private enterprise
Until 2010, state-wide gambling was reserved to state-owned operators. Other locally-based games, for which participation physical presence was required (e.g., casinos, bingo, slot machines) could be carried out by privately licensed operators pursuant to the regulations of autonomous communities. Lottery activities were reserved to the state-owned operator Loterías y Apuestas del Estado (LAE), which held a monopoly on state-wide sports and horse betting, and to the National Organisation of the Blind in Spain (ONCE), a Spanish foundation aimed at supporting people with serious visual impairment that operated its own lottery. LAE acted as an operator and regulator. Nonetheless, de facto unlicensed online operators abroad offered games to people participating in Spain.
A comprehensive reform was carried out in 2010 and 2011. Considering the Court of Justice of the European Union's (CJEU) case law on market transparency and establishing that the entity regulating the market cannot be the entity operating games, state-owned operators were required to surrender those functions, which were then entrusted to the Directorate General for Gambling Regulation (DGOJ). Following the approval of Royal Decree-Law 13/2010, Spain's regulatory framework now separates those activities. Private operation of games other than lotteries was authorised upon implementation and development of the Gambling Act.
With respect to non-occasional lottery games, however, the Gambling Act maintained the status quo ante. LAE and ONCE are designated as the entities exclusively authorised to operate such games on a national basis in Spain. The Gambling Act justifies the maintenance of this reserved market for LAE and ONCE on the basis of the significant amount of business generated by lottery games and because lottery tickets are instruments payable to the bearer and, therefore, carry the risk that they may be used for money laundering purposes. Because of these circumstances, operators acting in the reserved lottery market are subject to state control. The reserved framework under the Gambling Act for LAE and ONCE addresses the need to subject the games to strict state control to secure the state's interest in preventing fraud, crime and incitement to squander money on gambling and to avoid the negative effect that gambling may have on Spanish consumers.
With respect to other games, a wide range of private companies entered the market. There are currently 52 licensed gambling operators state-wide in Spain.
iv Territorial issues
The Spanish Constitution does not list gambling among the matters over which the state has exclusive authority. As a result, pursuant to constitutional rules, the autonomous communities may assume exclusive responsibility in regulating gambling, as most of them have. The scope of this responsibility is limited to the territory of the corresponding autonomous community.
In light of this vertical distribution of authority, autonomous communities have issued regulations for the provision of gambling services at the regional level and, under this authority, casinos and other physical gambling sites in general are operated. The autonomous communities also have the power to regulate gambling activities, including lotteries (except for charitable sports betting games) within the scope of their respective territories, insofar as they do not infringe on the powers reserved to the state.
With regard to state-wide gambling, prior to 2011 only lotteries and sports, including horse-race betting games, were regulated and reserved to certain specific operators in a closed market (see Section I.iii, above). As of 2011, the applicable legislation, including with respect to online gambling, is the Gambling Act.
v Offshore gambling
Prior to the 2011 reform implemented by the Gambling Act, offshore gambling (i.e., gambling services offered to Spanish customers from operators located in foreign countries) was considered a crime. This was deemed to be conduct amounting to smuggling. However, the ability of the Spanish authorities to prosecute those operators was limited and not enforced in practice.
The situation changed dramatically following the ratification of the Gambling Act. Any private gambling operator could apply for licences to offer gambling services legally in Spain and the Spanish authorities took action to ensure that gambling services could not be offered by unlicensed offshore operators. Likewise, unauthorised offshore operators may not advertise, sponsor or promote, in any way, games of luck or chance, or advertise or promote gambling operators, if they lack the necessary authorisation for advertising actions.
The powers of the DGOJ, a body within the government, include the ability to prosecute unauthorised gambling. To prosecute illegal gambling, the DGOJ monitors the market from time to time and has created a blacklist of possible unauthorised operators based on in-house investigations, user reports and complaints received.
It is also important to note that, under the Gambling Act, licences and authorisations issued by foreign countries (including EU and EEA Member States) are not valid or recognised in Spain. Operators licenced in EEA Member States may apply for recognition of their licences in Spain through the issuance of a Spanish licence, but the original foreign licence is not the valid title per se. There are no restrictions on direct and indirect non-EU investments in gambling operators.
II LEGAL AND REGULATORY FRAMEWORK
i Legislation and jurisprudence
As mentioned in Section I.i, above, the Gambling Act is the primary piece of legislation governing Spain's state-wide gambling sector.
Among other aspects, the Gambling Act establishes:
- the legal definition for specific games;
- the games that are forbidden;
- the persons who are not entitled to participate in games governed by the Act;
- rules on the advertisement, sponsorship and promotion of gambling activities;
- rules on consumer protection and responsible policies on gambling;
- the licensing framework for state-wide gambling activities conducted through means of electronic communications (including online games) other than lotteries;
- the authorisation framework for lotteries;
- monitoring measures applicable to operators and participants;
- standardisation of gambling technical systems;
- a sanctioning framework;
- a tax framework; and
- the entities in the reserved market that are authorised to operate national non-occasional lottery games in Spain and the corresponding framework.
The Gambling Act was developed and implemented through the following regulations:
- Royal Decree 1613/2011 of 14 November, which develops the Gambling Act with regard to the technical requirements of gambling activities;
- Royal Decree 1614/2011 of 14 November, which develops the Gambling Act with respect to licences, authorisations and gambling registers; and
- Order EHA 2528/2011 of 20 September sets out the requirements and procedures for appointing independent entities in charge of certifying gambling software and gambling operator security assessments.
The regulations of each of the authorised games in Spain have been issued through 14 ministerial orders.2
Each of the 17 autonomous communities has ratified gambling legislation setting out the requirements to operate games (e.g., casinos, bingo locales, betting houses).
There is no significant case law on gambling matters in Spain other than the judgments issued by the CJEU, none of which refers to specific Spanish operators or matters.
ii The regulator
The Gambling Act provided for the creation of a new regulatory body in Spain, the National Gambling Commission (CNJ). However, at the time of writing, nearly eight years after the enactment of the Gambling Act, the CNJ has yet to be formally set up and there are no expectations that this will happen in the short or medium term. Until the CNJ is formally set up, the DGOJ will hold the corresponding powers.
The DGOJ will, therefore, supervise the correct functioning of the gambling sector and safeguard the effective availability and provision of competitive gambling services for the benefit of users.
The powers of the DGOJ include, among others, the ability to:
- grant gambling licences;
- run the registries created by the Gambling Act;
- resolve claims filed by participants against gambling operators;
- prosecute unauthorised gambling;
- arbitrate disputes among gambling operators at the request of the parties;
- implement basic gambling regulations;
- establish technical and functioning requirements for the games;
- monitor, inspect and sanction, as the case may be, gambling activities, especially those related to games exclusively assigned to LAE and ONCE under the Gambling Act, without prejudice to the faculties of the relevant Spanish antitrust authorities;
- approve regulations in the terms developing the Gambling Act;
- safeguard compliance with money laundering, and terrorism financing legislation; and
- manage and collect gambling tax.
Finally, the autonomous communities have their own gambling authorities, regulating, supervising and controlling gambling activities within their respective territories.
iii Remote and land-based gambling
Spanish law distinguishes remote and land-based gambling. The state has the authority to regulate the former while, as a general rule, autonomous communities regulate the latter.
As a result, the requirements to operate remote games are identical across Spain while the requirements to set up land-based gambling premises vary in each autonomous community, including the requirements to install machines for the general public to participate in online games.
iv Land-based gambling
In terms of revenue, land-based gambling represented over 93 per cent of the gambling sector in Spain in 2016 (the most recent data available, as the Spanish regulator has not published this information since 2017).3 Land-based gambling venues in Spain consist of casinos, bingo venues and slot machines, which need not be installed in gambling venues and can be placed in bars, pubs and other venues not specialising in gambling activities.
The number of casinos is generally limited by each autonomous community, although a plurality of casinos is located in several autonomous communities (e.g., Madrid).
Betting shops are authorised in all 17 autonomous communities, subject to the granting of the corresponding licences.
Although lottery tickets can be acquired online (both from LAE and ONCE), they are mainly sold at physical points of sale throughout Spain.4 LAE and ONCE are responsible for setting up their sales network. LAE has 10,983 points of sale5 (including dedicated points of sale, businesses that are exclusively devoted to selling LAE games; and mixed points of sale, businesses that carry out other businesses and the selling of LAE games is ancillary to their main purpose, for example, bars, bookstores, tobacco shops). ONCE has over 19,500 points of sale and itinerant sellers.6
Amusement arcades are not considered as gambling or gambling machines from a legal standpoint, as the player has no expectation of winning any prize if successful in the game.
v Remote gambling
The operation of remote gambling activities other than nationwide non-occasional lottery games is subject to the granting of licences pursuant to the Gambling Act. The Gambling Act distinguishes between two types of licences:
- general licences – any operator interested in the provision of non-occasional games must obtain a general licence for the relevant general category of game identified by the Gambling Act it intends to offer: bets, contests, or other games; and
- specific licences – the exploitation of each of the specific games within the scope of a general licence is subject to the granting of a specific licence. The granting of the specific licence and its renewal is subject to the conditions and requirements to be determined by the DGOJ for each regulated game.
General and specific licences may not be transferred or assigned to third parties except in the event of merger, spin-off or contribution of assets in the context of a group restructuring, provided that prior authorisation from the DGOJ is obtained.
The installation of equipment and the opening of premises to the public for the operation of games (where the physical presence of players is required, although ancillary to the game) is subject to prior administrative authorisation by the autonomous communities, where applicable, in addition to the general and specific gambling licences.
A gambling licence granted in another jurisdiction will not be valid in Spain, but documentation filed by an operator authorised in an EEA Member State can be validated by the DGOJ in order for the potential operator to be granted the corresponding licence in Spain.
vi Ancillary matters
Gambling operators must have the approved software, equipment, systems, terminals and tools generally required to carry out their activity. Gambling regulations set out the technical requirements for operators' systems.7 The DGOJ monitors compliance with technical requirements at different stages:
- Before obtaining the licence, the technical projects and preliminary certification reports are reviewed. In that regard, operators must provide their technical project along with a preliminary certification report of compliance with the technical requirements. If a general licence is requested, an internal monitoring system certification report must also be provided.
- Final approval is awarded within six months of obtaining the licence. General licences are subject to final approval, while single licences remain valid until final approval is obtained.
- Any changes made to the approved system must be reviewed.
- Technical systems must be audited every two years.
- Operators must send a quarterly report to the DGOJ describing the changes made in the period and providing an updated description of the technical system.
- According to proportionality criteria, any substantial changes affecting critical components require the DGOJ's prior authorisation.
- In the case of special emergencies affecting a system's security, operators may make substantial changes to critical components and obtain permission afterwards.
On another score, under Spanish gambling regulations, individuals linked to operators must be registered with a special registry run by the DGOJ that records data corresponding to shareholders, directors and employees directly involved in the development of the games, spouses or people with whom gambling operators live, and first-degree ancestors and descendants.
vii Financial payment mechanisms
Spanish online operators must link each participant to a gambling account, where all deposits made, prizes won and economic transactions linked to the participant's activity must be reflected. The currency used for the purposes of the gambling account must be the euro, as expressly provided under gambling regulations. The use of cryptocurrencies (e.g., bitcoin) is not permitted.
III THE LICENSING PROCESS
i Application and renewal
The DGOJ is authorised to award general licences by calling a public tender according to the principles of publicity, concurrence, transparency, non-discrimination, objectivity and equality. The process intended to award general licences through a public tender may be initiated by the DGOJ directly or in response to a third-party request. Once a public tender is called for the granting of general licences for a given category of game, no further public tenders may be called until 18 months have elapsed from the previous tender for the same category of game.
The third 'application window' for general licences, from December 2017 to December 2018, resulted in the granting of one general licence – while five general licence applications remain pending final resolution.
The terms of the tender cannot limit the number of licences to be awarded unless the DGOJ concludes, prior to carrying out the corresponding procedure, that it is necessary to limit the game that is subject of the tender and limit the number of operators entitled to provide it. This limitation may be only based on reasons of public interest, protection of youths or the prevention of gambling addiction.
The final resolution awarding a general licence will establish, among other things, the following aspects of the licence:
- nature and types of gambling activities to be undertaken within the scope of the general licence;
- events that will be taken into account for gambling purposes;
- authorisation to carry out advertising, sponsorship or promotion activities;
- mechanisms to prevent fraud, money laundering and terrorism financing;
- territorial scope of the gambling activity;
- prize conditions and amount, which may not exceed the percentage established in the terms and conditions governing the public bidding process; and
- term, renewal and causes of termination.
In addition, the resolution will establish the obligation to host a specific website with the '.es' country code top-level domain, and to redirect to that website all connections from within Spanish territory or from Spanish user accounts to non-'.es' websites whose domain is owned or controlled by the gambling operator, its parent company or its subsidiaries.
Holders of a general licence must provide a guarantee linked to the general licence to secure compliance with the Gambling Act and its implementing regulations. The amount of the guarantee is €2 million for betting or other games general licences and €500,000 for general contest licences. The guarantee may consist of: (1) cash deposited in escrow with the DGOJ; (2) a mortgage over real estate located in Spain; (3) guarantees issued by banks licensed in Spain; or (4) a surety bond issued by an insurance company licensed in Spain.
General licences may be granted for a 10-year period with the possibility for renewal for a subsequent 10-year period, except for cases in which the number of general licences awarded was limited and certain circumstances set forth in the Gambling Act occur that justify the need to call a new public tender after the initial term elapsed.
Operators holding a general licence are entitled to apply for specific licences. Prior regulation of the relevant specific game is mandatory in order to apply for the corresponding specific licence. Any gambling activity carried out without holding the appropriate licence is forbidden. This was the case with exchange betting until 2014: the game was defined under the Gambling Act; however, unlike other specific games, it was unregulated and, therefore, exchange betting was not allowed. To date, two operators hold a specific licence for exchange betting.8
Specific licences are granted for a term of between one and five years, with the possibility of renewal for subsequent terms of the same period. The regulations governing each type of game establish the term of the corresponding specific licences and the conditions for renewal.
Guarantees linked to specific licences to secure compliance with the Gambling Act and its implementing regulations are also required. The form of the guarantee may consist of any of the alternatives set out for the general licences' guarantees. The amount depends on the specific game for which the specific licence is granted.9
General and specific licences may be terminated upon occurrence of any of the following circumstances:
- written waiver;
- expiration of term;
- a resolution by the DGOJ evidencing the existence of any of the following circumstances:
- loss of all or any of the conditions that justified the granting of the licence;
- incapacity of the licence holder (owing to death or sudden legal incapacity in connection with natural persons, or winding-up in the event of legal persons;
- cessation of activities or failure to carry out the activity underlying the purpose of the licence for at least one year);
- declaration of insolvency;
- failure to comply with specific conditions set forth in the relevant licence document;
- assignment or transfer of the licence through merger,
- split-up or contribution of assets without prior authorisation; or
- if the licence was obtained by using false statements or altering the conditions that justified its awarding; and
- sanction for very serious violations of the Gambling Act.
Termination of a general licence will result in the termination of the specific licences tied to the general licence.
ii Sanctions for non-compliance
The Gambling Act establishes a sanctioning framework that designates minor, serious and very serious violations of the Gambling Act, as set out below:
- very serious violations include the organised performance or advertisement of gambling activities without the required licences; the unauthorised assignment of licences; repeated default in the payment of prizes without justification; the alteration of previously certified technical systems; and the breach of the obligation to redirect gambling from Spanish participants to a '.es' site;
- serious violations include non-compliance with the terms and conditions of the licences; allowing forbidden players to participate in games; financing participants; and using of uncertified systems; and
- minor violations include lack of cooperation with inspectors or agents; failure to inform the public of the prohibition for minors and forbidden players to participate in games and any breach not defined as serious or very serious.
The sanctions for the different categories of violations are the following:
- for minor violations, a fine of up to €100,000 and a written warning;
- for serious violations, a fine ranging from €100,001 to €1 million and the temporary suspension of the activity for up to six months; and
- for very serious violations, a fine ranging from €1,000,001 to €50 million. The following sanctions may also be imposed: loss of general or specific licence (or both), a ban on providing gambling activities under the Gambling Act for up to a maximum four-year term or closure of means used to provide information society services supporting gambling activities. In addition to the above sanctions, in those cases in which the violating entity lacks the relevant licence, the sanctioning authority may also impose the seizure or destruction of any element related to the gambling activity illegally carried out.
The Gambling Act identifies who will be deemed the infringer: legal or natural persons breaching the provisions of the Gambling Act; or legal or natural persons supporting, advertising, promoting or benefiting from such breaches.
Money laundering, organised crime and match-fixing are dealt with by other law enforcement bodies. Money laundering and organised crime are monitored and prosecuted by SEPBLAC, Spain's financial intelligence unit, and anti-money laundering and counterterrorist financing supervisory authority.
As far as operators are concerned, any entity responsible for the management, exploitation and marketing of lotteries and other games of chance is subject to Law 10/2010 on the prevention of money laundering and terrorism financing with respect to transactions related to the payment of prizes. Operators must comply with the due diligence measures, internal control measures and the reporting obligations set forth in Law 10/2010.
Since 2010, match-fixing is considered a criminal offence in the Spanish Criminal Code (as a type of business corruption) and is prosecuted by the police with the cooperation of leagues, federations and betting operators.
The authorisation and organisations of games, raffles, contests, bets, games and other gambling activities provided on a national basis in Spain is subject to the gambling tax, which was created by the Gambling Act.
In general, the gambling tax is based on applying fixed tax rates ranging from 15 to 25 per cent, depending on the gambling activity, to the game's gross revenue (in the case of mutual bets, raffles and contests) or the game's net revenue (in the case of bets with consideration or other games).
The reserved non-occasional lottery games are not subject to the gambling tax.
In addition to the gambling tax, the Gambling Act also establishes a gambling duty, the aim of which, among other things, is to cover costs of regulatory activities over the gambling activities undertaken by gambling operators. As a general rule, the gambling duty is equal to 0.075 per cent of the gross revenue of the corresponding game and is payable annually on 31 December.
The following applies to other taxes:
- Personal income tax – winners of prizes from LAE, ONCE and other public entities are subject to special taxation rules pursuant to personal income tax regulations that establish a reduced tax rate and several exemptions (prior to 2013, all prizes derived from LAE games were fully tax-exempt), while winners of prizes from other gambling operators are subject to general taxation rules.
- Corporate tax – with regard to companies, operators are subject to the general framework established in corporate income tax regulations, as well as legal persons winning prizes in games, with the sole exception that losses incurred as a consequence of gambling are non-deductible.
- Indirect taxation – games subject to the gambling tax are exempt from value added tax in Spain. The exemption does not cover management or other ancillary services that may be provided by gambling operators, with the exception of bingo management services, which are also exempt.
VI ADVERTISING AND MARKETING
Any sort of advertising, sponsorship or promotional activities related to any of the gambling activities subject to the Gambling Act or to gambling operators is forbidden unless authorised in the corresponding general and specific licence documents. Should the gambling operator intend to undertake gambling activities through programmes broadcasted by any audiovisual means, whether published in the media or on websites, including those cases where the means to access the prize is the use of premium telephony services or SMS, the corresponding general and specific licences must cover and authorise these possibilities.
Any entity, publicity agency, electronic communication operator, audiovisual operator or information society service directly or indirectly broadcasting or publishing advertisements and promoting gambling activities or gambling operators is obliged to verify that the entity requesting the advertising and promotional activities holds the appropriate gambling licence, and that the licence allows the type of publicity or promotion requested. Otherwise, it must deny the request. The DGOJ, through its website, maintains an updated list of licensed operators. Should the DGOJ identify unauthorised publicity or promotion of gambling activities or gambling operators by any entity, publicity agency, electronic communication operator, audiovisual operator or information society service, it is entitled to instruct them to stop broadcasting or publishing the unauthorised advertisement, or promotion of gambling activities or gambling operators.
The Gambling Act referred to a future regulation to establish the conditions that may be included in the authorisation allowing the advertisement, sponsorship and promotion of gambling activities that will be included in the general and specific licence documents. To date, this regulation has not been approved, although the DGOJ issued draft regulations in February 2018 and opened public information procedures in order for any interested party to provide allegations and assessments for drafting the regulations.
Additionally, Law 7/2010 on audiovisual communications, as amended, establishes that programmes intended to offer games of chance and betting can only be broadcast from 1am to 5am, except draws and other gambling products with a public purpose. Under these exceptions, draws of LAE and ONCE's lottery games can be broadcast by Spanish television operators outside that time frame. Providers of the corresponding audiovisual communication services have secondary liability for fraud committed through such programmes.
Moreover, the provision by audiovisual communication operators of any type of promotion of gambling activities is subject to the general rules on promotion of economic activities under Law 7/2010.
VII THE YEAR IN REVIEW
No material changes were implemented on the general regulatory framework. Regulations on customer identity verification were amended to include the obligation for online gambling operators to gather documentary evidence on the identity of participants and other data to be requested from participants (IP address, device used and ID of such device). Several other draft regulations were issued (on advertisement, prevention of match-fixing and sports-betting fraud), but none of them were approved.
With respect to case law, the most relevant resolution handed down in 2018 was a Spanish Supreme Court judgment assessing the concept of 'commercialisation' of lottery tickets, which is a reserved activity under the Gambling Act – however, there is no express legal definition of 'commercialisation' in the Gambling Act. The case at hand referred to an online services provider that offered its customers the option to acquire lottery tickets. The services provider was not authorised to sell lottery tickets – which were purchased by the provider at authorised points of sale – and claimed that its services were legal as the activity should not be deemed as 'commercialisation', but as brokerage (non-reserved) services. The contractual relationship between the customer and the services provider consisted of a mandate or commission to purchase lottery tickets in exchange of a price. The Spanish Supreme Court ruled that the services, even if characterised as a mandate or commission, amounted to reserved 'commercialisation', as the provider was an organisation for the purchase and distribution of lottery tickets for a price – a facilitator for the development and diffusion of reserved gambling activities, which should be interpreted as 'commercialisation'.
Public focus on the harm that gambling activities may be causing in lower-income areas, where many gambling halls have opened recently, increased during 2018. There was also an increase in the voices challenging the allegedly high volume of online gambling advertisements on Spanish TV and radio. As a result of these concerns, the Madrid regional parliament recently forbade the advertising in the Madrid public television network of gambling activities. However, state-wide regulations on advertisement have not been approved, as initially expected.
No regulations to 'grey gaming/gambling areas', such as online fantasy games and e-sports, have been discussed in 2018, although the regulator launched a public consultation process on the update of gambling regulations with the express warning that the existing regulatory framework does not adequately address online fantasy games or e-sports.
With respect to operators, the most significant milestone was the acquisition of the Spanish-based leading international operator Cirsa Gaming Corporation by the US-based private equity firm Blackstone. Completion of the acquisition required prior notification to the European Commission. In June 2018, the European Commission decided not to oppose the notified operation and to declare it compatible with the internal EU market and with the European Economic Area agreement.
1 Pablo González-Espejo is a partner and David López Velázquez is a counsel at Uría Menéndez.
2 Order HAP/1370/2014 of 25 July, establishing the basic regulations on slot machines; Order EHA 3085/2011 of 8 November, approving the basic regulations on roulette; Order EHA 3086/2011 of 8 November, approving the basic regulations on baccarat; Order EHA 3087/2011 of 8 November, approving the basic regulations on bingo; Order EHA 3088/2011 of 8 November, approving the basic regulations on blackjack; Order EHA 3089/2011 of 8 November, approving the basic regulations on poker; Order EHA 3090/2011 of 8 November, approving the basic regulations on complementary games; Order HAP/1369/2014 of 25 July, approving the basic regulations on betting exchanges and amending several orders; Order EHA 3079/2011 of 8 November approving the basic regulations on fixed-odds betting; Order EHA 3080/2011 of 8 November, approving the basic regulations on fixed-odds sports betting; Order EHA 3081/2011 of 8 November, approving the basic regulations on sports pools betting; Order EHA 3082/2011 of 8 November, approving the basic regulations on fixed-odds horse betting; Order EHA 3083/2011 of 8 November, approving the basic regulations on horse pool betting; and Order EHA 3084/2011 of 8 November, approving the basic regulations on contests.
7 Royal Decree 1613/2011 of 14 November, developing the Gambling Act with regard to the technical requirements of gambling activities, and Order EHA 2528/2011 of 20 September, setting out the requirements and procedures for appointing independent entities in charge of certifying gambling software and gambling operator security assessments.
8 Betfair International, PLC and Plataforma de Apuestas Cruzadas, SA.
9 Pool sports betting: 1.5 per cent of the gross income; pool horse betting: 1.5 per cent of the gross income; fixed-odds sports betting: 6.5 per cent of net income; fixed-odds horse betting: 7.5 per cent of net income; other fixed-odds betting: 6.5 per cent of net income; exchange betting: 7.5 per cent of net income; bingo: 6.5 per cent of net income; contests: 2 per cent of gross income; roulette: 8 per cent of net income; poker: 8 per cent of net income; blackjack: 8 per cent of net income; baccarat: 8 per cent of net income; slot machines: 8 per cent of net income; complementary games: 6.5 per cent of net income.