Spanish gambling market, still some uncertainties

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

There have been some changes and developments in the Spanish gambling market and regulatory framework since we published our last update on the country in June.

Firstly, the scheduled privatisation of the incumbent state-owned operator, Sociedad Estatal de Loterías y Apuestas del Estado ("LAE") has been postponed indefinitely, because of the current financial situation and the fact that offers did not seem to meet the expectations of the Spanish government.

Secondly, the regulatory framework has now been completed, as the Gambling Act has been implemented through different Royal Decrees and Ministerial Orders to fill the gaps left open since the Act was enacted. New regulations include the technical requirements for gambling activities, conditions for licences, authorisations and registrations, and specific conditions for different types of gaming. One of the most criticised issues that the new regulations have faced has been the different per day/month limits which have been included in the regulation for each type of game.

The licensing process has already started and, despite there being no official information, sources say that several gambling operators have applied for licences, as have other industry players, such as media, technology and telco companies. The granting of licences is expected, in principle, by mid/end December 2011, but as it coincides with a change of government, the uncertainties are keeping the sector on the edge of its seat.

Indeed, the change of government has added some uncertainty to the brand new regulatory framework. It has been reported that the Popular Party may introduce some changes, such as: (i) cancelling the creation of the National Gambling Commission, and consequently, making the transitional role of the Gambling Directorate of the Economy Ministry a permanent one; and (ii) postponing the grant of licences, and consequently the transitional regime. If this is going to happen, it should be resolved soon, since the new licences were supposed to be operative from the beginning of 2012. However, additional questions remain open, for example, whether regional governments will keep competing with the nationwide legal framework in order to attract business to their territories, in the way that Madrid, Valencia and Castilla y León seem to be doing through the offer of tax benefits. The question underlying all this is whether or not the new government will support online gaming or protect land-based business.