Spain’s online gambling market is one of the largest in the world, its gross revenues reaching €7.6 billion. In addition, the iGaming segment is probably considered one of the most decentralized markets in the world.
Online Gambling Regulations in Spain
Gambling was abolished in Spain at the end of 1977 because of a royal decree in the process of democratization. In the constitution of 1978 the state does not control or regulate the gambling market, therefore, the state government of the 17 regions is free to set up its own regulation and licensing.
The Spanish Gambling Act came into force in 2011 and it regulates and determines all gambling activities in Spain. The main regulatory authority is the General Directorate for the Regulation of Gambling, which issues national licenses. The Gambling Act includes terms and requirements that describe any activity that involves placing amounts of money or financially valuable objects at risk for prospective and undetermined results, which depend to some extent on the extent of chance, and that provides prizes. Simply put, if the games have an entry fee, odds and winnings then these games will be considered gambling and fall under gambling activities, which must be licensed.
Types of Spanish gaming licenses
Licenses are issued for betting, casino games, and other forms of gaming. Lotteries are not licensed because they are a monopoly of two organizations.
There are two types of licenses on the Spanish iGaming market. The first license is the so-called general license (Licencias generales) and the second one is the singular license (Licencias singulars). However, for the organization of online gambling activities on the Internet it is mandatory to have both.
- A general license (Licencias generales) authorizes the organization of the gambling business. This license is issued for 10 years.
- A single license (Licencias singulars) allows slots, poker, blackjack, bingo, etc. It can be obtained only with a “general gambling license”. The period of validity is 3 to 10 years.
How to get an online gambling license in Spain?
Licenses are issued after the procedure of checking applicants for compliance with the requirements established by applicable law and tender conditions. Operators must comply with the legal, economic and financial requirements. There are also important anti-fraud and anti-money laundering requirements. In addition, the requirements include the obligation to provide proof of security and reliability of the software. If you have not complied with at least one of the conditions it is impossible to obtain a license. The number of licenses issued is usually unlimited.
Requirements to request a license
There are several types of requirements: legal requirements, economic requirements and technical requirements.
First of all, let’s begin with legal requirements. One of the first and basic requirements for an operator is that the company must be legally registered in the European Union and have its registered address in one of the member states of the European Economic Area. The company may engage in only one type of activity – organizing, marketing and operating gambling activities. Company’s registered capital must be more than €100.000 for a license for gambling activities. Also operators must register in the special applicants section of the General Registry of Gambling Licenses. In addition, the company is prohibited from violating other restrictions specified in the Spanish law on gambling.
The following are economic requirements. The operator must provide documentation of the company’s financial independence and solvency, as well as provide all financial statements on time. DGOJ may, on reasonable grounds, permit the applicant to prove his or her economic and financial soundness by any document if it’s legal.
Let’s move on to the technical requirements. It is necessary to prove the existence of professional experience of the company’s managers. In addition, it is necessary to provide documentation on the specification of technical systems available for gambling operations, which is the subject of the request for a license.
Spain Online Gambling License Cost and Taxation
The one-time financial obligation for obtaining an online gambling license in Spain is:
- Technical reports — €38,000
- Registration of each license — €2,500
- Each gaming license — €10,000
In addition, there is a requirement for a cash guarantee, real estate guarantee, insurance or pledge of €2,000,000 for general licenses and €500,000 for each single license. From the second year, the amount of guarantees decreases.
There is also an annual tax that must be paid to the General Gaming Regulatory Authority by January 31. Amount of the tax is 0.075% of the previous year’s income.
The fine for operating without a license or its violation is up to 50 million euros.
Tax rates for online gambling businesses are prescribed at the federal level. The amount of the fee depends on the type of game. The tax rate for sports betting pools is 22% of total revenue. For fixed sports betting is 25% of GGR and for pools of horse bets is 15% of total income. Organizers of contests should pay 20% of total revenue. Operators of poker, casino games, bingo, slots, etc must pay 25 of GGR.
The validity of licenses
The Directorate General of Gambling Regulation will issue a ruling on the issuance of a license within 6 months from the date of the request. Within 10 days, you will be notified of the decision and it will be published on the Directorate General’s website. If you are not informed of the licensing decision within this period, it will automatically be in your favor by regulation.
In any case, the issuance of a license is conditional upon obtaining a permanent approval of the technical systems of gambling, which must be granted within 6 months after the date of notification of the issuance of the corresponding license.
General licenses have a 10-year validity period and can be renewed for an additional 10 years. Special licenses are valid from one to a maximum of five years and can be renewed for subsequent periods of the same duration. The loss of a general license entails the loss of the corresponding individual licenses.
Pros and cons
- The clear procedure for obtaining a license
- General licenses are valid for ten years
- Wide and developed market
- Validation period of Special license is one year minimum
- Responsible gambling
- High fees for obtaining a license
- A cash guarantee or real estate guarantee is required
Why is getting a Spain gaming license very beneficial for operators?
The gambling market in Spain is growing and developing. It is one of the largest markets in the world, and the Spanish-speaking population is a large percentage of all people on the planet. One way or another, this market shows great potential and is valued in the international community. The Spanish license guarantees the stability of the gambling business. Obtaining an online casino license in this region is an ideal option for doing business legally.