Online gambling pulls in the punters

The number of people gambling online in Spain has soared since the government legalized the activity, handing out licenses to around 30 companies last June. In the last six months, Spaniards have spent some 2.3 billion euros, according to figures released by the DGOJ gambling directorate, the body that oversees gambling in Spain. In November alone, some 461 million euros were spent.

Prior to regularization, around 200,000 people gambled on line in Spain; that figure has now risen to one million, and who spend between 500 euros and 600 euros a year each.

The tax office will enjoy a windfall as a result. In 2012, it will collect 140 million euros from the sector, having budgeted for just 100 million, and double the amount collected in 2011, when online gambling was still in a legal limbo.

The Economy Ministry says that the sector is set to grow by 10 percent next year, with total turnover expected to reach 5 billion, providing tax revenue of up to 160 million euros. But the tax authorities in Spain’s EU neighbors, which moved earlier to regularize online gambling, are collecting far higher amounts. In Italy, the sector is worth 9.8 billion euros; in France 10.2 billion; and in the UK almost double the French figure.

Poker is the online game of choice for Spaniards, making up 40 percent of turnover, and generating 952 million euros in the last six months. Betting on sports outcomes was next at 861 million, casino gambling at 371 million, followed by bingo at 24 million euros. The average online poker player spends just over 50 euros a week, while online casino players spend 33 euros, according to a survey carried out by the Online Gaming Observatory.

But the most popular online gambling activity is still lottery, which 69 percent of online gamblers say they have bought, against 52 percent who bet on sports, or 38 percent who play poker. Men make up 68 percent of online gamblers, and are typically aged between 25 and 44 with university studies.

Spain’s gambling authorities are set to legalize online slot machines next year, a move which is likely to hit bingo halls and slot-machine arcades.

The Economy Ministry says that its priority is to prevent fraud. The tax office has investigated 16 overseas companies that have operated in Spain since June, and who now face fines of up to 50 million euros and the closure of their site in Spain. Three have already been banned from operating in Spain. Another 80 sites have since agreed not to allow Spaniards to register with them.

New legislation

Codere, one of the biggest companies in the sector, is bidding for 10 licenses, and the matter is being reviewed by the courts.

At present, online gambling makes up just 17 percent of the betting sector, but its share is growing. Legislation passed in 2011 and the concession of licenses the following year to companies such as Bwin, Betfair, Sportingbet and Pokerstars allowed them to regularize their activities after years of operating in a legal limbo. These companies are now competing with longstanding Spanish outfits such as Codere, Cirsa and Recreativos Franco, who were also granted licenses.

Further reform has also been proposed by the Spanish government that will allow tax exemptions or reductions of up to 95 percent in the IBI land value tax and the IAE economic activity tax. This measure will benefit the mega-complex EuroVegas, the multi-billion-dollar gambling resort to be built in Madrid by the Las Vegas Sands Corporation (LVSC). In September 2012, LVSC chose the Spanish capital to expand its business in Europe as part of a project with an estimated total investment of $35 billion.