Spanish Online Gambling Market Rapidly Gaining Traction

Spanish Online Gambling Market Rapidly Gaining Traction

Spain launched its legalized online gaming market in 2011, while exchange betting was added to the gambling mix in 2014. Despite a slow start, the online gambling market has now started to gain pace and in 2017 generated gross revenue of €560 million ($678m), up by a massive 31.9% compared to the €438 million ($514m) collected in 2016.

Furthermore, its impressive growth rate has continued into 2018 with the industry skyrocketing by 27% to €163.3 million ($190.5m) in Q1, followed by a whopping 40.1% year-on-year gain in Q2 to €167.2 million ($195.87m). According to analysts, a number of factors help to explain the positive momentum being witnessed in the country’s internet gambling market, including a generally more favorable attitude towards gaming, as well as the recent 5% tax break for licensed operators that came into force on July 1st.

Q2 Results Soar by 40.1%

Spain’s most recent financial results for the second quarter revealed a strong performance across the whole range of different gambling products. Sports betting continues to be the most popular type of online gambling-related activity in the country, and in Q2 accounted for €87.6 million of the overall total,  an amount 46.7% higher than the same period a year earlier. As a result, the vertical currently represents more than half of all revenue produced by the online gambling sector.

Online casino is the second biggest column supporting the industry, and in Q2 saw its revenue grow by 36.9% to €56.5 million. While slots contributed over half of all online casino revenue, roulette still commands a third share of the vertical, and also demonstrates a higher spending rate.

Meanwhile, Spain’s smaller gambling products were also in positive territory during the last quarter. Online poker, for instance, saw its revenue spike by 34.8% year-on-year to €19.5 million, while bingo was more moderate by comparison and noted a 16.9% improvement to €3.3 million.

Tax Cuts to Boost Revenue

Spain was badly hit during the financial crisis of 2007–2008, and in 2012 it received a bailout of €100 billion ($125bn), of which €41 billion ($45bn) was needed in order to rescue its banks, and prevent the economy from collapsing. After implementing wide scale structural reforms and budgetary adjustments, it has since turned around and over the past three consecutive years has returned more than 3 per cent growth. In fact, its GDP growth rate of 3.1 per cent last year was the fastest of all advanced economies.

This year, the country subsequently felt confident enough to offer its gambling industry a tax break, and in June reduced the rate from 25% to 20% of GGR. Commenting upon the development and its impact on the industry, the Spanish gaming law firm Asensi Abogados explains:

“Operators will be able to make better offers to the players who will not go to illegal markets. The latest figures from the DGOJ show that all areas of online gambling are expanding, particularly with sports betting and online casino games, so I believe that these new measures will also lead to more tax being collected.”

€1BN Industry Prediction

Needless to say, the Spanish online gambling market’s stellar trajectory has caught the attention of international gaming firms looking for lucrative opportunities to expand their operations. Furthermore, the country has less barriers to entry than other places such as the UK or France, and is likely to stay that way until the market ripens.

During the first quarter of 2018, the market’s potential was subsequently highlighted in a report produced by consultancy firm Ficom Leisure, which forecast online gambling revenue reaching between €1 billion ($1.22bn) and €1.5 billion ($1.84bn) within the next 3-5 year period. In other words, the picture is looking extremely positive right now, with such a large predicted jump in the size of the market also pointing towards an overall impressive revival in the Spanish economy.