Prediction Shows Growth in Spain iGaming Market
Last week, the director of the General Directorate for Gaming Management in Spain predicted tremendous growth for the online gaming market in Spain over the next five years.
According to these predictions, Spain could bring €70 billion ($78 billion) into its market by 2024. Spain currently brings about €44 billion ($49 billion) in revenue world-wide.
An Enthusiastic Prediction
October 15 and 16th saw the two-day event “Bet On Ceuta,” a coterie of speakers, tours, and networking opportunities aimed towards welcoming gaming growth in Ceuta, a Spanish autonomous city on the north coast of Africa.
Events included detailed descriptions of the functioning of tax regulations and how they should affect gaming operators, as well as government subsidies to gaming operators and technology companies and on-the-ground exploration of the tourism industry in Ceuta. By the event’s end, guests could expect to have a good sense that Ceuta is working to brand itself as a potential home to international gaming operators.
October 15th also saw a speech from Juan Espinosa, director of the General Directorate of Gaming Management (the Direction General de Ordenacion Del Juego, or DGOJ), who used his time to predict Spain’s exponential growth in the iGaming industry over the next five years.
As part of Mr. Espinosa’s plan, the DGOJ will continue to build a robust relationship with the tax agency (AEAT), further strengthening the relationship between the gaming industry in Spain and the country’s overall financial growth and social services.
During his speech, he shared that the DGOJ and the AEAT have just renewed their agreement to cooperate, first signed in 2014.
Ceuta: A Haven for Gaming?
The “Bet On Ceuta” conference came at a good time. The city, which is home to a mere 85,144 inhabitants, welcomed seven iGaming operators from around Europe this past January. As of this move, these operators have shifted their online gaming divisions to run entirely off of the island.
These operators included Betfred (UK), Suertia (Spain), and Mondobet (Italy). This past July, these operators were joined by LeoVegas (Sweden) and Gaming Innovation Group (Malta), and Playtech (UK) in September.
These moves, which will surely bring new jobs and a breath of fresh air to the Ceuta economy, came after the DGOJ introduced reduced tax rates and operational incentives for gaming companies in the city.
Some see this move by the Ceuta government as their approach to competing with Gibraltar, a UK-owned overseas territory which has also been working to make itself more attractive to gaming companies as Brexit looms.
Gaming in Spain: A Saving Grace for a Struggling Economy
Spain has had a well-documented history for loving to gamble: even under Franco’s regime, when gambling had to be done in secret, the people of Spain were determined to participate in the thrill of the game.
Despite having come out fairly unscathed in the 2009 recession which hit many of the world’s economies, Spain has been struggling with an ongoing economic decline over the last five years. With less financial growth than expected across Europe this year, Spain has had to reset its more optimistic hopes for growth in 2019-2021.
With the possibility of Brexit looming, plus less investment and consumption than anticipated and a continent-wide fiscal slog, the road back to financial security for Spain is looking steeper than expected.
The gambling industry has, then, proved to be a breath of fresh air to Spain, particularly in the online sector. With 60 land-based casinos around the country and a wildly popular annual lottery at the holidays (El Gordo) — not to mention the popularity of sports betting — the gaming sector in Spain is not only attractive to those already living in Spain, but to tourists as well.
Estimates show over 65 million tourists coming to Spain annually, with more than a quarter of those guests coming from the UK alone. Of the UK visitors to Spain, nearly half of them participate in gambling while they visit, spending between £501 and £5,000 ($649 and $6,478, respectively).
2017 to 2018 saw significant year-over-year growth in Spain’s gaming industry. This growth inspired Spain’s government to reconfigure its tax laws to become friendlier to gaming operators and gamers alike. In June 2018, Spain lowered the tax rate for profits earned in gaming from 20% to 15% on winnings, in so doing making gaming more attractive for participants.
The Online Gaming Market in Spain
Perhaps due to the demonstrated popularity of gaming in Spain, online casinos internationally began adding Spain to the list of countries from where they would accept players.
In 2018, Spain also factored in the popularity of online gaming among its citizens, planning to cut taxes for most online gambling forms from 25% to 20%.
According to statistics released by the DGOJ, online operators in Spain earned €193.2 million ($215.3 million) in the first quarter of this year alone. From one quarter to the next, the growth has not been so significant — between 2018’s fourth quarter and 2019’s first quarter, there was a growth of a mere 2.14%. However, from the first quarter of 2018 to the first quarter of 2019, the growth was more significant: 20.1%.
In fact, earnings for 2019 overall have not lived up to the high expectations of the last few years, as growth has been slowing each quarter this year. Still, growth in the online gaming market in Spain continues, and the government of Spain will likely continue to incentivize investment in their gaming industry as its role in their economy continues to prove more and more reliable.