Market Monitor

Netherlands,
Portugal & Spain

September 2019

Written by
Clear Concise Media
for iGaming Business
Published September 2019

© 2019 iGaming Business Ltd

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Editor: Stephen Carter, Joanne Christie

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Contents

Editor’s letter.................................................................................................. 1

Executive summary.................................................................................... 2

Part 1
The Netherlands – a market on hold......................................................... 3

Part 2
Portugal – on a roll........................................................................................... 8

Part 3
Spain – no ads please, we’re Spanish.......................................................12

iGaming Business Market Monitor • February 2019 iii

Editors Letter

Editor’s letter

A
d bans, powerful monopolies and punishing tax rates feature
prominently in this edition of the Market Monitor, but this
would probably be the case whatever markets we focused on.
In July, Dutch authorities further committed to purging the market of
what it deems to be illegal advertising to Dutch players a full 18 months
out from the regulated opening,
Potential licensees not abiding by six criteria designed to determine
if they are ignoring advertising restrictions during a two-year cooling-
off period face being blocked from participating in the dot.nl market
from January 2021.
KSA programming director Amida Michael expects 90-100 of the
180 applications to be granted, meaning a market that is relatively
small in European terms (less than €600m according to recent
estimates by MotivAction) looks like being competitive to the point of saturation.
Offshore operators also face the challenge of cutting through the far higher degree of brand
recognition of local lottery and land-based casino brands among Dutch consumers. As we saw in
Sweden with ATG and Svenska Spel, this can prove decisive in the initial transition from dot.com to dot.
country, possibly even more so in the Netherlands given the moratorium on advertising in place until the
dot.nl opening.
Elsewhere, we drill down in to the latest public numbers from Portugal and Spain, the former scaling
as well as expected given the heavy turnover tax regime for sports betting, and the latter now looking
like following Italy towards a total ban on gambling advertising.
The Market Monitor provides you with a comprehensive overview of the state of play in the igaming
markets of these countries.
Stephen Carter
Editorial director, iGaming Business

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 1
Executive summary
Executive summary
Downtime for Dutch-facing operators
The recent €350,000 fine handed out to GVC’s
Electraworks/Bwin subsidiary in early August
by the Dutch gambling authority KSA shows the
jurisdiction is now an ‘active’ regulated market
even if the official opening won’t come until
January 2021.
The licensing process is now in train, with the
authorities insisting operators that wish to enter
the regulated market should abide by a two-year
cooling-off period, during which time they should
stop all marketing to Dutch citizens. To determine
whether any operator is complying, KSA has
set out six criteria, including whether operators
use the iDEAL payment solution popular in the
Netherlands.
Estimates for the size of the grey market vary,
but recent market research conducted by Sherloq
on behalf of Gaming in Holland suggests that as
far as public perceptions go, it remains a lottery-
dominated space. However, there is a degree of
evident cut-through for a handful of online brands
including Unibet, Bwin and Bet365.
Casino leads Portugal to new high
For the second quarter in a row, the Portuguese
regulated online market has broken gross gaming
revenue records. Total revenues for the first half of
2019 hit €95.7m, which should mean that the total
for the year will comfortably surpass the €152.1m
achieved in 2018.
Online casino is leading the way with year-on-
iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019
year growth over the past six quarters averaging
about 40%. Sports betting, meanwhile, has posted
average year-on-year quarterly growth over the
same period of just over 21%.
The taxation system in Portugal remains
problematic. The market remains small in terms
of competition and is dominated by land-based
casino firms and the Santa Casa lottery monopoly.
The handful of international competitors includes
Betclic, PokerStars and 888. Moves on the part of
a government commission to potentially move to
a gross gaming revenue-based regime appear to
have stalled.
Ad ban looms in Spain
With the Spanish government now apparently
intent on adopting recommendations that all
gambling advertising should be banned, it leaves
operators unsure which way the market will head
from this point.
Growth will presumably moderate from the
30%-plus and 25%-plus achieved in 2017 and
2018, respectively. As of the first quarter, growth
moderated to 20%, with sports betting up 27% to
€98.9m, while casino was up 20% to €67.1m.
The advertising ban isn’t the only regulatory
move seen in Spain; in July the Dirección
General de Ordenación del Juego (DGOJ) also
announced a ban on betting on events involving
the participation of under-18s. This affected more
than 5% of bets in Spain in 2018, or about 1% of
total turnover.
2
Part 1: The Netherlands – a market on hold
Part 1: The Netherlands – a market on
hold
W
ith the passing in February – finally
– of online gambling legislation,
the long road to regulation in
the Netherlands has finally reached its main
milestone, but not quite the end goal. After the
Dutch Senate gave the legislation its official
stamp, the Netherlands has entered a near two-
year cooling-off period before the regulated
online market opens its doors in January 2021.
At least such is the hope of the government
and the gambling authority Kansspelautoriteit
(KSA), both of which expect operators that
previously had an online presence marketing to
Dutch citizens to halt all such activities while they
apply for a new licence.
It is a matter of some conjecture as to how
this will be policed, but to date the KSA has
a track record of actively pursuing any sites
or operators which it deems to be illegally
marketing to Dutch consumers.
The rules published in July this year set out
how the authorities will determine whether
an operator is deemed to have ignored the
restriction. The six criteria are:
• The offer was made in whole or in part on a
website whose extension ended in .nl;
• The offer was made in whole or in part in the
Dutch language;
• Advertisements were made for the relevant
offer or the provider on TV, radio or in print
media aimed at the Dutch market;
• For the offer, use was made of one or more
domain names containing typical concepts
referring to the Netherlands in combination
with gambling designations;
• The website (s) on which the games of
chance were offered contain (s) one or more
iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019
characteristics from which a focus on the
Netherlands can be derived;
• For the benefit of the games of chance offered,
use could be made of means of payment that
are used exclusively or largely by Dutch people.
The scheme will expire on July 1, 2021, six months
into the new regime. Given the two-year provision,
it means that if any operator is found to have
offered to a Dutch customer from this moment
on, they will hence be barred from ever taking
part in the regulated market.
Operators and affiliates under
pressure
Companies that have previously found themselves
in the KSA’s sights include some of the biggest
names in the European gambling sector. Casumo,
Betsson, Mr Green, 1xbet, William Hill, Bet-at-
Home and Cherry’s ComeOn brand are among
those that have fallen foul of the KSA. As this
report was going to press, GVC’s Electraworks/
Bwin subsidiary in the Netherlands had just been
fined €350,000 for what the KSA saw as illegal
marketing to Dutch citizens. Of particular note is
that many of the above were found to be offering
the popular Dutch payment solution iDEAL.
Betsson’s response has been to rebrand
its two Dutch-facing sites, Oranje and Kroon,
which now trade as Casino Winner and Loyal
Casino. Betsson said at the time of its recent
second-quarter results that the formerly Dutch-
facing operation had taken “swift measures to
be in the best position to obtain a licence at
the earliest possible time”, including making
adjustments to the product offering, branding
and payment solutions.
3
Part 1: The Netherlands – a market on hold
Betsson came under fire from analysts with its
recent results for the lack of detail offered about
the decline in revenues from the Netherlands.
Similarly under pressure was Kindred, which
despite being a major player in the market
previous to the shutdown, said very little
during its second quarter results regarding the
Netherlands, despite analyst questioning.
The two-year standstill also applies to affiliates.
In late July, the authority announced it had taken
action against 23 affiliates to ensure they stopped
advertising online services, threatening them with
financial penalties if they continued with their
Dutch-facing activities.
Market size
The Netherlands market is relatively small in
European terms. A report commissioned by
Holland Casino from market research firm
MotivAction, published in January, suggested
the Dutch unregulated online market was worth
€592m in 2018. That figure was essentially flat
on that from its previous report from 2016. The
survey of 15,000 participants showed that online
sports betting was the most popular activity,
alongside online bingo, both just ahead of casino
and poker. The report estimated that up to 1.6
million Dutch citizens gambled online at least
once in 2018, up by 300,000 on the figures from
two years previous (see Chart 1).
Chart 1: Netherlands – online participation
1.6
1.4
1.2
Dutch citizens (m)
1.0
0.8
0.6
0.4
0.2
0 1.3m 1.6m
2016 2018
Source: MotivAction
iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019
However, the KSA’s estimates on the size of the
offshore market suggest revenues are only half
that large, putting the figure at €284.2m. It also
estimates player numbers to be only a third of
MotivAction’s figures (see Table 1).
Table 1: Netherlands offshore estimates 2018
Source Estimate Player estimates
(€m) (m)
MotivAction 592 1.6
KSA 284.2 0.5
Source: MotivAction/KSA
Whichever figures best represent the actual
numbers, what is clear (as the KSA itself admits
in its 2018 annual report) is that as much as there
have been recent actions from the regulator to
crack down on what it sees as illegal operators,
others have soon filled the space to mop up the
latent demand.
Whether that continues to be the case now
that all of the major operators will be seeking
to effectively shut down their Dutch-facing
operations remains to be seen. There will surely
be operators (and affiliates) that will, on balance,
decide to continue taking Dutch players, and
as much as they can, advertising to Dutch
consumers on the basis that they will not be
applying for a licence. That was certainly the
opinion of Justin Franssen, lawyer and Dutch
gambling market expert at Amsterdam-based
law firm Kalff Katz and Franssen, who said at a
recent conference that offshore operators based
in jurisdictions such as Cyprus were seeing up to
10,000 customers every month being funnelled by
Dutch-facing affiliates.
Under the new law, the KSA will be authorised
to order illegal operators and any third parties that
facilitate illegal gambling to stop their services,
including ordering payment service providers
to take measures to block payments. However,
according to local newspaper reports, Dutch ISPs
successfully lobbied against any blocking measures
being introduced with the new bill although this
decision will be reviewed after three years.
4
Part 1: The Netherlands – a market on hold
Future prospects
As for what happens when the market does
finally open, there is the recent example from
Sweden to caution any observers against being
too optimistic about what might happen once the
regulated market gets going.
The market will, at least, remain attractive. All
products will be available (albeit with some minor
prohibitions on spread betting, betting on certain
special events such as elections and betting
on overseas lotteries). The market will also be
(somewhat reasonably) taxed at 29%.
The latest news is that there will not be any
advertising restrictions. The draft rules would ban
the use of individual sports stars in advertising but
would allow operators to sponsor individual players.
Willem Van Oort, founder of Gaming in Holland,
said at least operators intending to enter the
Dutch licensing process now had clarity, despite
regulatory and tax headwinds. “The big bang (as
planned by the authorities) will be phased in as a
result of the mechanism of the cooling-off period.”
As it stands, there are about 180 firms that
have applied for licences, according to KSA.
However, in a statement released in July, the new
programming director for KSA, Amida Michael,
said she expected that only between 80-100
would actually be granted licences. The KSA said
that around one-third of the applications received
so far were from established online operators and
another third were from land-based operators in
the Netherlands.
It was the remaining third – made up mainly
of what the KSA described as “small companies”
that the organisation expected would not fulfil the
criteria for being granted a licence.
In a statement made on the KSA website,
Michael made an explicit comparison with
Sweden. “Our expectation is that most of the
latter group will not be able to comply with the
stringent licence conditions. In our opinion, the
Dutch situation is comparable to Sweden, where
around 160 companies showed an initial interest
in obtaining a licence and about 90 licences were
ultimately issued.”
iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019
The Dutch situation is
comparable to Sweden,
where around 160
companies showed an initial interest
in obtaining a licence and about 90
were ultimately issued
Amida Michael, KSA
Attitudes to gambling survey
Perhaps the most comprehensive picture we
have of the state of the market in the Netherlands
before the state of abeyance comes from a survey
undertaken on behalf of the Gaming in Holland
conference earlier this year by market research
firm Sherloq.
The survey of more than 2,000 participants
took place in late May which, in effect, was just
ahead of the two-year standstill period.
Broadly, in terms of attitudes to gambling, the
survey was consistent both with the approach
undertaken by the government with regards to
the regulation of online gambling and similar
surveys undertaken elsewhere.
Though this comes with the caveat that only
39% of respondents were aware of the Remote
Gambling Act, there was some support for the
government’s approach to the market with 29%
either broadly or totally in agreement with the
stance taken. Unsurprisingly, given the lack of
pre-survey awareness, 49% were neutral on the
move and 21% were either somewhat or totally
against the new law.
The qualitative comments from the survey
suggest these were people who were against
gambling completely, while the positive
comments suggest there was some support for
the idea that bringing online gambling into the
legalised orbit would bring it out of the shadows.
Gambling behaviour
The statistics for frequency of gambling and
offline gambling behaviour were consistent with a
largely lottery-dominated market (see Chart 2).
5
Part 1: The Netherlands – a market on hold

Chart 2: Gambling and betting activities in the past 18% arriving at their choice via search and 10%
12 months going through social media advertising (Chart 4).
Lotteries 57%

Scratchcards 28%
Chart 4: Channels through which respondents
found their operator of choice
Bingo 14%

Online advertising 25%

Gambling machine 13%

Sports betting 9% TV commercials 20%

Roulette 8%
Search results 18%

Blackjack 6%
Through others (friends, family
17%
etc.)
Poker 5%

Social media advertising 10%

Other of ine casino games 3%

Horse race betting 2% Commercials at sports games 9%

0 5 10 15 20 25 30 35 40 45 50 55 60
Radio commercials 8%

Source: Sherloq/Gaming in Holland Monitor

I don't know any more 26%

0 2 4 6 8 10 12 14 16 18 20 22 24 26
In terms of online, as a long-standing grey
market there was some significant evidence of Source: Sherloq/Gaming in Holland Monitor

online activity from the participants. While sports

betting led the way, with 10% saying they had Online brand awareness
made an online bet within the past 12 months, When it comes to which brands the punters in the
there was also evidence of online casino activity Netherlands are familiar with, it is unsurprising that
with 8% having played slots, 8% playing bingo and it should be the state lottery monopolies and the
7% participating in online poker (see Chart 3). land-based casino brands that dominate (Chart 5).

Chart 3: Online activity within the past 12 months Chart 5: Brands participants are familiar with
100
Sports betting 10%
92%

89%

90
84%

Online slot machines 8%

82%

81%

78%

80
Online bingo 8%
70%

70
61%

Online poker 7%
60
50%

Online gambling games 5% 50

40%

Online blackjack 4% 40
28%

Live roulette 3% 30
24%

18%

20
Virtual roulette 3%
12%

11%

11%

10
8%

8%

Other online casino games 3%

0
Online horse race betting 1%
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Ja cky t

Ce t

B e rs
Ho de erij

nk Ca j

ie de L ij

as i j

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k e es

65
B a nd eri

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si n

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te
r

K r t er

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te

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Source: Sherloq/Gaming in Holland Monitor

Source: Sherloq/Gaming in Holland Monitor

In terms of how those who gambled online The state lottery has the highest recognition
came to choose their proposition of choice, the factor, followed by the Postcode Lottery, Holland
statistics prove the value of online advertising and, Casino, the Bankgiro Lottery and De Lotto, which
presumably, affiliate channels, with 25% coming all have recognition percentages above 80%.
to online gambling via online advertising, a further The best of the offshore licensed brands is

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 6
Part 1: The Netherlands – a market on hold

Unibet with 24%, followed by Bwin with 12%, recognition for the current incumbents shouldn’t
Ladbrokes (11%), PokerStars (8%) and Bet365 be dismissed. As has been proven recently in
(8%). This will clearly change a lot in the post- Sweden, former monopolies tend not to roll over
regulation environment, though the degree of when an online market regulates.

The Netherlands licensing process

KSA’s Michael said the guidelines for gaining a licence would be strict, with assessments
investigating the “previous history of applicants and their business partners”.
Financial requirements will be a part of the process and conditions will also be imposed
including arrangements needing to be made for the prevention of addiction, separation of player
credits from other monies, player identification, quality assurance and integrity policies. A central
exclusion system will also be employed.
The final details for the licensing process will be published in subordinate legislation in
September this year. The process then runs as follows:
• 1 March 2020 – KSA notifies applicants of comprehensive licensing information
• 1 July 2020 – KSA online licensing structure fully operational
• 1 January 2021 – market fully operational
However, Michael warned that the KSA could not “fully commit” to this planning schedule as it was
still awaiting the Gambling Act coming into force.

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 7
Part 2: Portugal – on a roll

Part 2: Portugal – on a roll

F
or the second quarter in a row, the Table 1: Year-on-year online GGR comparison 1Q18-
Portuguese online market has set a new 2Q19
record for gross gaming revenue (GGR). Quarter Revenue YoY uplift YoY %
Having hit €47.4m in the first quarter, total revenues (€m) (€m) uplift

rose to €48.3m in the second three months of the 1Q18 32.9 1.6 5.1
year, leaving the first half total at €95.7m (see Chart 2Q18 32.9 7.6 30.0
1). Should the trends from the first half continue
3Q18 38.8 9.4 32.0
into the second half then the market is likely to
4Q18 43.1 6.6 18.1
smash through its total for 2018 of €152.1m.
1Q19 47.4 14.5 44.1

Chart 1: Portugal online quarterly revenue 2Q19 48.3 15.4 46.8

performance Q316-Q219 Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)
50

45 Table 2: Sports betting year-on-year growth 1Q18-

40 2Q19

35 Quarter Revenue YoY uplift YoY %

(€m) (€m) uplift
30

25
1Q18 17.4 0 0

20 2Q18 20.5 6.6 47.5

15 3Q18 19.4 3.1 19.0
10
4Q18 21.6 1.1 5.4
5
1Q19 24.8 7.4 42.5
0
Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418 Q119 Q219 2Q19 23 2.5 12.2
Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)
Sports betting GGR (€m) Casino GGR (€m) Total (€m)

Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)

Table 3: Online casino year-on-year growth 1Q18-
2Q19
On a quarterly basis the market has been Quarter Revenue YoY uplift YoY %
marching upwards since the first quarter of 2018. (€m) (€m) uplift
In year-on-year terms, the quarterly performance 1Q18 15.5 1.6 11.5
has been impressive (Table 1). 2Q18 16.8 5.4 47.4
The average year-on-year growth rate for the past
3Q18 19.4 6.3 48.1
six quarters has been 29.3%, while that from the past
four quarters has been an even more impressive 4Q18 21.5 5.5 34.4

35.2%. Breaking down the growth by product, there 1Q19 22.6 7.1 45.8
is a divergence between what is happening in sports 2Q19 25.3 8.5 50.6
betting and casino (Tables 2 & 3). Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 8
Part 2: Portugal – on a roll

Casino over sports the online casino vertical, slots unsurprisingly

Casino has consistently shown a higher level of dominates, representing 67% of total revenues,
growth over the past six quarters. The average while poker – cash and tournament combined –
rate of year-on-year percentage growth by was worth 11.4%. The rest came from roulette and
quarter since the first quarter of 2018 has been blackjack (Chart 4).
just shy of 40%, while the rate for sports betting
is just above 21%. As can be seen from Charts 2 Chart 4: Online gaming breakdown, Q219 (%)
& 3, sports betting – as befits the product - has Tournament poker 4%
Cash poker 8%
been more volatile, while casino has been much
more consistent.
Blackjack 8%

Chart 2: Online sports betting YoY uplift by quarter

(%) 1Q18-2Q19
55

50

45 Roulette 13%
Slots 67%
40

35
%

30

Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)

25

20

15 Sports betting, meanwhile, is obviously

10 dominated by football (at 71%) with tennis (16%)
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
and basketball (9%) the only other two sports
Source: Serviço de Regulação e Inspeção de Jogos (SRIJ) broken out (Chart 5).

Chart 3: Online casino YoY uplift by quarter (%) Chart 5: Online sports betting breakdown, Q219 (%)
1Q18-2Q19 Others 5%
50 Basketball 9%
45

40

35

30 Tennis 16%
25
%

20

15

10

5 Football 71%

-5
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)

Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)

Player numbers
Further product breakdown Total player numbers have grown steadily in the
Within both sports betting and casino, the past four quarters. In total the past four quarters
regulator provides a further breakdown. Within have seen more than 414,000 new registrations,

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 9
Part 2: Portugal – on a roll
signalling a degree of regulated market
momentum (Table 4). Indeed, in the past three
quarters the figure has topped 100,000, helping
to contribute to the record revenues seen so far
this year. The figures for total registrations topped
1m in 2018, up from more than 800,000 in 2017.
Table 4: New registrations 3Q18-2Q19
Quarter New registrations (000s)
3Q18 83.3
4Q18 103.5
1Q19 125.2
2Q19 102.2
Source: Serviço de Regulação e Inspeção de Jogos (SRIJ)
Could do better
If the bare figures – and particularly the
percentage growth rates displayed in the past
year – are a reason for optimism, there are some
caveats. The market remains small. Even on the
current growth path, the market is likely to fall
short of being worth even €200m for this year.
Then there is the still punishing turnover tax
rate for sports betting of 8% on revenues under
€30m and a whopping 16% over that threshold.
Online casino has a more operator-friendly GGR
tax regime of 15%, which rises to 30% for those
with more than €5m in revenue.
Recent news – or rather the lack of any
significant progress – suggests that the operators
within the market will have to live with this tax
regime for a while. A government working group
was set up in January and tasked with investigating
a potential switch in sports betting from a turnover
tax to a GGR-based regime. However, it has gone
quiet since, despite having a deadline to report
back to the government in February.
The taxation level means the number of
licensees remains small. Among the global brands
that have braved the market are PokerStars,
Betclic and 888, but it is the local land-based
brands that dominate, including Casino Estoril,
Casino Portugal and Casino Solverde, while there
are a handful of local online brands including Bet.
pt and Nossa Aposta.
iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019
Lottery monopoly Santa
Casa said previously it
would not enter the online
space, however, subsequently it has
launched the Placard.pt sports
betting and gaming site.
The anomalous position of the lottery
monopoly Santa Casa remains problematic.
The company said previously it would not enter
the online space, however, subsequently it has
launched the Placard.pt sports betting and
gaming site.
Calls for change
Reports in the Portuguese press earlier this year
suggested that up to 75% of online gamblers
are playing on offshore sites. It prompted a
statement from the European Gaming and
Betting Association (EGBA), which renewed its
calls for an overhaul of the country’s tax regime.
Specifically, EGBA called for a GGR-based regime
to be instigated to encourage both more market
entrants and a greater level of channelisation
towards the regulated market. It also suggested
the current discriminatory system, whereby some
operators paid a lower rate of tax than others,
should be looked at.
“The current Portuguese tax regime for online
gambling is discriminatory because it applies a
more favourable tax for some operators, whilst
others have to pay a much higher tax based on a
broader tax base,” said Maarten Haijer, secretary
general at EGBA.
“As a result, applying for a Portuguese licence
is much less attractive for online gambling
companies based elsewhere in the EU: for
instance, only one EGBA member has a licence in
Portugal, while many more are very interested to
obtain a licence there if the tax regime becomes
non-discriminatory and better suited to the online
gambling environment.”
The issue of the number of offshore sites that
are deemed to be marketing to Portuguese-
based players is touched upon in the SRIJ’s
10
Part 2: Portugal – on a roll

regular data update. As of the current
legislation coming into force, a total of 408
operators have been given notice to shutter
their Portuguese-facing operations, with 21
more names added in the second quarter.
The ISPs have also been instructed to block
324 websites which, the report says, despite
being notified by the SRIJ to cease operations
“continued to make online gambling and betting
available in Portugal”.

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 11
Part 3: Spain – no ads please, we’re Spanish

Part 3: Spain – no ads please, we’re

Spanish

T
he news from Spain was bleak at the start Table 1: Spain online growth 2016-18
of August, when the Spanish government Product 2016 2017 2018
decided to adopt all the recommendations
Sports betting 228.6 299.4 356.3
from the country’s ombudsman with regard to
Poker 57.6 59.7 81.3
banning the advertising of gambling.
According to reports in the Spanish media, the Casino games 116.4 171.3 237.9

minority government will now go about framing Bingo 9.1 11.5 13.4
the legislation, which will be accompanied by Other 14.6 15.5 10.1
further responsible gaming measures.
Total 426.3 557.4 699
The ombudsman’s report came in May.
YoY growth (%) 30.8 25.4
Appearing to follow the lead of Italy, the measures
Source: Dirección General de Ordenación del Juego
proposed banning all TV, radio, media and online
advertising except for lotteries.
It is another hammer blow for the European Chart 1: Spain online growth 2016-18 by product
industry, albeit with the caveats that applied when 400

similar measures were introduced elsewhere; while

350
it will stifle competition and innovation from any
300
new market entrants, it will not be so bad for the
incumbents, who will, as a rule, see their margins 250

improve as their marketing expenses decrease.

GGR €m

200
Government action to limit gambling
advertising has been on the cards for some 150

years. Indeed, the ombudsman was following in 100

the wake of two Spanish regional TV networks

50
making moves to prohibit gambling advertising.
In May the Basque station Euskal Irrati Telebista 0
Sports betting Poker Casino games Bingo Other
(EiTB) joined Telemadrid in banning gambling
advertising. But it is still a turn for the worse for 2016 2017 2018

a market that has very much been on an upward
growth path for a few years now.
Market performance
This, of course, might be part of the problem. As
can be seen from the data, the market has been
growing at a decent clip for the past three years,
with total GGR rising from €426.3m in 2016 to
€699m in 2018 (See Table 1 and Chart 1 opposite).
Source: Dirección General de Ordenación del Juego
The growth continued into the first quarter
with total year-on-year growth of 20% across
all products. Of the constituent parts, sports
betting led the way with year-on-year growth
of more than 27% to €98.9m, ahead of casino,
which rose by more than 20% to €67.1m (see
Table 2 on next page).

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 12
Part 3: Spain – no ads please, we’re Spanish

Table 2: First quarter 2019 GGR seen new rules proposed that will ban betting
Product 2018 2019 YoY growth on sports involving minors. The moves have
(%) been proposed to cut down on the potential of
Sports betting 77.7 98.9 27.3 integrity issues arising from immature players
Poker 21.5 21.2 -1.4 potentially being targeted by match-fixers. The
Casino 55.8 67.1 20.2 DGOJ said that more than 5% of all bets in 2018
Bingo 3.5 3.2 -8.6 were on matches where the majority of players
Other 2.4 2.8 18.4 were under the age of 18, representing more than
Total 160.9 193.2 20.1 1% of all betting turnover during the year.
Source: Dirección General de Ordenación del Juego

The growth has clearly come at the cost of
a negative reaction from politicians, but the
question of whether the public is behind the move
is more open to question. Certainly, a ban runs
counter to the evidence from a survey published in
June by gaming industry trade group CEJUEGO,
which showed that more than 90% of respondents
saw gambling as a recognised leisure pursuit.
A recent three-year plan on the part of the
regulator, the Dirección General de Ordenación del
Juego (DGOJ), placed the control of advertising
at the centre of its proposals, saying it would
tightly monitor licensees. However, the body also
said it would attempt to foster more innovation,
particularly in the direction of omni-channel efforts.
Further regulatory moves in Spain have
Growth prospects
Whether the current growth rate would have
been sustainable even without the proposed
advertising ban is perhaps a moot point but
any prohibitions in that area will surely have
an impact. Prior to the ban being announced,
it would have been fair to suggest that growth
might moderate from the current 20%. On this
basis, the market would likely have been worth
more than €1bn by 2021 (See Table 3 below).
However, if the ad ban has more of an impact
it is easy to see how this might hold back
growth further. Any potential moderation in
growth, set alongside the gambling operators
disappearing off screens and billboards, might
mean the sector faces less legislative and
regulatory threats in the future.

Table 3: Projected online GGR 2018-22

2018 2019 2020 2021 2022 2023

GGR 699 839 965 1,109 1,220 1,342

Growth rate 20% 15% 15% 10% 10% 10%

Source: Report estimates

iGaming Business Market Monitor • Netherlands, Portugal & Spain • September 2019 13
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