Spain and Portugal Move Forward With Online Regulations

In the latest tangible step forward for authorization of online gambling and implementation of slots and exchange betting, Spanish regulators Friday published long-awaited slots and betting exchange regulations.

Licenses Can Be Accepted

The proposals enabled the Dirección General de Ordenación del Juego (DGOJ) to begin accepting license applications, ostensibly concluding an implementation process that has taken upwards of two years, for an economy that is sorely in need of a revenue infusion.

Increase Online Revenue Share

Until now, Spain’s limited online casino vertical revenue comprised a mere €8.7m of its Q1 online revenue for 2014, at a reported total of €66.9m.

Existing Operators Get a Jump

New online gaming offerings are schedule to be launched for public consumption as of January 1, 2015; however, operators already in possession of Spain-issued licenses will have the inside track in front of new entrant competition awaiting Spain's loosening of restrictions in the new regulated environment.

Spain Licensing

As far as licenses are concerned, slots and exchange betting licenses will be valid for a period of five years. Renewals for similar periods will also be available. However, a stiff 25% tax on slots revenue will remain in place, which could discourage some new entry, especially from smaller operators who nonetheless represent diverse sectors of the global gaming population.

Portugal's Liberalization?

In Portugal, further proposals to liberalize the country’s regulated online gambling market were approved. On Friday, the Portuguese Parliament approved plans previously endorsed by its Council of Ministers to bust the current online gambling monopoly of Santa Casa da Misericordia (SCdM).

Procedural Speed

As far as the Parliamentary process is concerned, the approval opens a 180-day window during which legislators are put upon to define the terms of the license application process, and specify the tax rates and penalties for unauthorized operators.

Previous expectations had been that this process could be completed by year's end now appear overly optimistic, in light of the pace of the legislative process as reflected in Friday's developments.

RGA Concern

The Remote Gambling Association (RGA) has expressed concern at what it perceives as the disproportionate level of taxing that Portugal is proposing to impose, out of concerns that Portugal's need to repay its International Monetary Fund/European Union/European Central Bank bailout benefactors is resulting in exaggerated taxes levied on online gaming operators, which constricts the market unnecessarily.

Tax to Cover Debt

It is no secret that Portugal has debt issues. The fact is that the reason many European countries are showing a willingness to regulate online gambling may well be due to debts they have to the European Central bank, and may well be hoping to tax their way out of debt via the newly regulated market of online gambling.