Home > What U.S. Regulators can Learn from Spain’s New Gambling Law

What U.S. Regulators can Learn from Spain’s New Gambling Law

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While lawmakers across the U.S. are either overseeing new online gambling regulation or arguing over introducing it in their state, they would do well to look across the Atlantic at Spain’s experience.

Many would argue Spain has been an exceptional example of introducing a regulatory framework for online gambling fairly and robustly. But even though that is certainly true, the country is currently implementing a new Royal decree to further strengthen laws to protect minors.

It stands to reason officials in Spain wish they had included these tighter advertising and sports sponsorship laws in the first place. In which case, shouldn’t US regulators, who are at the start of their online betting journey, seize upon Spain’s real-life experience?

The concerns around gambling are doing the rounds in more states than ever. Only last month, South Dakota gave the go-ahead for sports betting – but only in casinos. Online or mobile betting was kicked into the long grass.

How Spain Launched Online Betting Regulation

While land-based gambling had been allowed historically in Spain, it was overseen independently by the country’s 17 autonomous communities, like Catalonia, Madrid, and the Balaeric Islands. That sort of fractured oversight was never going to end well for online gambling, so the legislation introduced back in 2011 was to be brought under central government control.

The Directorate-General for the Regulation of Gambling (Dieccion General de Ordenacioón del Juego), or DGOJ for short, was formed to legislate and regulate the industry. That single, autonomous authority is surely easier to manage than the US system of regulation by individual states, but we are where we are.

The DGOJ does a good job of implementing its laws on the country’s gaming industry, with areas of social responsibility, anti-money laundering, and marketing a key part of its focus, drawn from similar successes of the United Kingdom Gambling Commission and the Malta Gaming Authority. The new legislation covered Gaming (casinos and the like), Betting, Lotteries, and Social/Skill Games. As a result, there are sportsbooks, poker sites and a decent number of online casinos in Spain, all providing safe and fair playing platforms for customers.

Operators moving into the Spanish market must pay a 20% tax on all stakes (gross gaming revenue), which brings in millions for the Government budget. Players are expected to declare any winnings over €2,500 and pay income tax on it – although losses are deductible, so most recreational bettors won’t need to worry.

A new Royal Decree

Although the regulatory process began and proceeded smoothly for Spain, the DGOJ and social commentators were becoming increasingly concerned about gambling brands’ exposure of betting to minors.

There is a strict over-18s gambling policy, which all licensees stick to religiously, but their marketing efforts were causing the issue. Like in many other European countries, especially the UK, online gaming companies began sponsoring huge sports teams. Last summer, eight of the La Liga teams, the top tier of Spanish soccer, were sponsored by betting brands who had their names on the team shirts.

The Royal Decree on Advertising, which was approved last year and implemented this year, now forbids gambling companies from appearing on shirts and sponsoring the stadium names.

In a further clampdown on the possibility of minors being exposed to online gambling, advertising on television and on digital was restricted to just a four-hour window in the middle of the night, from 1am to 5am.

A final key element of the decree is not aimed at minors specifically but at potential harm to customers. It stipulates that bonus offers and promotions can only be marketed to existing players, meaning those potentially at risk from irresponsible gambling will not be tempted to sign up.

Why Does This Matter to US Lawmakers?

Spain has “been there, done that” when it comes to online gambling regulation. It has ten years of experience and has seen first-hand what works and what doesn’t. What clearly didn’t work was the proliferation of sports sponsorship and minors being exposed to advertising.

Interestingly, the UK is looking at these same issues in a current round of consultation, so you would think the US authorities should take this all on board. Without implementing these extra regulations from the off, they may inevitably regret it and come back to add new rules in the years ahead.

Adding extra checks on advertising and sponsorship might also be a safety-net that swings some doubters to accepting online gambling should happen in their state. That in itself would be a huge step forward and one you would think that those proposing a change in states like New York should adopt.

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