A general introduction to gambling law in Spain - Lexology

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Overview

i Definitions

According to Spanish Act No. 13/2011, dated 26 May 2011 on gaming activities (the Gambling Act) a gambling activity, which consequently is subject to the provisions and requirements set forth in the Gambling Act, is understood to mean any activity that involves risking sums of money or economically assessable objects on future and uncertain results that depend to some degree on chance, and that grant prizes in cash or in kind. Therefore, the existence or absence of these three elements (participation fee, chance and prize) will determine whether a certain activity should be considered as a gambling activity (subject to obtaining prior authorisation or licence) or a pure gaming activity, which in most of the cases would not be subject to a prior licence or authorisation.

The scope of application of the Gambling Act excludes the following:

1. games or competitions played purely for fun, as a hobby or for recreational purposes, that constitute social uses, as long as they do not imply the payment of a prize and when they do not represent financial profit for the promoter or operators of any type; and
2. promotional draws with advertising or promotional aims.

Furthermore, lotteries and betting are defined in Article 3, Sections (b) and (c) of the Gambling Act as follows:

b) Lotteries. Lotteries are defined as gaming activities in which prizes are awarded in cases where the number or combination of numbers or signs, expressed in the ticket, slip or electronic equivalent, agree in whole or in part with what is decided by a sweepstake or event held at a predetermined date or in a prior program, in the case of instant or pre-drawn games. Lotteries shall be marketed in tickets, slips or any other form of participation by material, computer, telematic, telephonic or interactive means.

c) Betting. A bet is defined, whatever its type may be, as that gaming activity in which amounts of money are risked on the outcome of a predetermined event, the outcome of which is uncertain and outside the participants' control, the amount of the prize given being determined as a function of the amounts risked or other factors previously established in the regulation of the specific type of bet.

ii Gambling policy

In Spain, betting products, poker, casino games (such as blackjack, roulette, baccarat or bingo) and lotteries are, in general terms, permitted, although subject to prior licence or authorisation. The regulatory framework and licence or authorisation regime applicable to the above products varies depending on whether they are offered remotely or land-based.

In addition, lottery games (and as described in more detail) are an oligopoly in Spain, and currently only two operators (one of them being a state company) hold the corresponding licence.

When it comes to fantasy games and e-sports games, it should be noted that these are not specifically regulated in Spain.

iii State control and private enterprise

In Spain, the development of lottery games has been expressly reserved to two operators in the Gambling Act, one of them being a state-owned company. The two operators that currently are authorised to offer lottery games in Spain are Organización Nacional de Ciegos Españoles (ONCE) and Sociedad Estatal Loterías y Apuestas del Estado (SELAE).

It is, therefore, not permitted to commercialise lottery games in Spain that are not those ones organised by SELAE (a state-owned company) or ONCE (as they could be foreign lotteries), as it would be construed as infringing the exclusivity granted to SELAE or ONCE.

On the top of this, the Spanish authorities' interpretation is that betting on the outcome of lottery games, both lottery games organised by SELAE or ONCE, or foreign lottery games organised in other countries, cannot be commercialised in Spain, as it will be considered as infringing the exclusivity granted to SELAE or ONCE. Therefore, commercialising and advertising these activities in Spain, or allowing players with Spanish internet platforms (IPs) to participate in these activities, would be considered as an infraction of the Spanish regulations and, therefore, a subject to be sanctioned.

iv Territorial issues

Gambling matters are regulated in Spain on a national and sub-national level, depending on the territorial scope of the gambling activity offered.

Spain is a country divided in to 17 autonomous regions, each with their own legal capacity to regulate certain local activities happening within their regional territories. As gambling regulation is a competence transferred to those autonomous regions, each of those regional governments is entitled to regulate gambling matters occurring within its regional territory.

From a practical perspective, this means land-based gambling activities are subject to regional and local regulations, which vary from one autonomous region to another, and online gambling activities are regulated at a national level because they are offered in more than one regional territory.

Having said this, and besides the fact that the applicable legal regime varies quite a lot from one region to another, there are no particular regions or localities in Spain that favour the offering of gambling activities more than others.

v Offshore gambling

Offshore operators are not allowed to offer gambling products in Spain based on foreign licences; however, offshore operators may be entitled to apply, and in many cases obtain, the corresponding Spanish licence or authorisation to offer gambling products in Spain. In other words, it is not always mandatory to incorporate a Spanish company in order to apply for and obtain gambling licences, it being, in most cases (especially in the online gambling field), sufficient to be a company based in the EU and equivalent to a Spanish public limited liability company.

In terms of enforcement, since the online gambling activities to be offered on a national level were regulated for the first time at the end of 2011 and the first licences were granted in June 2012, the Spanish authorities launched an ambitious enforcement programme to fight against the black market, which was considered to comprise those offshore operators offering online gambling activities to Spanish residents without having the corresponding mandatory licences. The Spanish authorities continue implementing this enforcement programme by carrying out random audits to verify whether offshore operators with no licence in Spain have IP blocking systems to impede Spanish residents from accessing their platforms, as well as making deposits and playing.

The result of this enforcement programme is that several fines have been imposed on offshore operators. Even though not all of those fines have been collected (the enforceability could be challenging), it is important to highlight that some of those operators accepted the fines, and paid them to prevent being disqualified from applying for a Spanish online gambling licence. In this sense, it is interesting to know that having been sanctioned because of offering online gambling activities in Spain, directly or through a company within the same group of companies, can prevent an operator from obtaining a Spanish online gambling licence.

Legal and regulatory framework

i Legislation and jurisprudence

The main laws and regulation of gambling matters on a national level are as follows.

General regulations

The general regulations are:

1. Gambling Act No. 13/2011, dated May 26;
2. Royal Decree No. 1613/2011 of 14 November, establishing technical requirements for gaming activities;
3. Royal Decree No. 1614/2011, of 14 November, developing the regulatory regime set forth by the Gambling Act;
4. Royal Decree No. 958/2020, of 3 November, regulating commercial communication of gambling activities; and
5. Royal Decree No. 176/2023, of 14 March, developing a safer gaming environment.

Games regulations

The games regulations are:

1. Ministerial Order No. EHA/3080/2011 of 8 November, approving the basic regulations of fixed odds sports betting;
2. Ministerial Order No. EHA/3081/2011 of 8 November, approving the basic regulations of mutual sports betting;
3. Ministerial Order No. EHA/3079/2011 of 8 November, approving the basic regulations of other fixed odds betting;
4. Ministerial Order No. EHA/3082/2011 of 8 November, approving the basic regulations of fixed odds horse race betting;
5. Ministerial Order No. EHA/3083/2011 of 8 November, approving the basic regulations of mutual horse race betting;
6. Ministerial Order No. EHA/3085/2011 of 8 November, approving the basic regulations of the game of roulette;
7. Ministerial Order No. EHA/3086/2011 of 8 November, approving the basic regulations of the game of baccarat;
8. Ministerial Order No. EHA/3088/2011 of 8 November, approving the basic regulations of the game of black jack;
9. Ministerial Order No. EHA/3089/2011 of 8 November, approving the basic regulations of the game of poker;
10. Ministerial Order No. EHA/3087/2011 of 8 November, approving the basic regulations of the game of bingo;
11. Ministerial Order No. EHA/3090/2011, of 8 November, approving the basic regulations of the game of supplementary games;
12. Ministerial Order No. EHA/3084/2011, of 8 November, approving the basic regulations of contests;
13. Ministerial Order No. HAP/1369/2014 of 25 July, approving the basic regulations of export betting; and
14. Ministerial Order No. HAP/1370/2014 of 25 July, approving the basic regulations of the game of slots.

Regional land-based regulations

Some of the most relevant are as follows:

1. Madrid: Law 6/2001, of 3 July 2001, on gambling in the Community of Madrid;
2. Canary Islands: Law 8/2010 of 15 July 2010 on Gambling and Betting in the Canary Islands; and Law 2/2020 of 14 October on the suspension of licences for new premises and other complementary measures in the field of gambling and betting;
3. Andalusia: Law 2/1986, of 19 April 1986, on gambling and betting, of the Autonomous Community of Andalusia;
4. Balearic Islands: Law 8/2014, of 1 August, on gambling and betting in the Balearic Islands;
5. Catalonia: Law 15/1984 of 20 March 1984 on gambling in Catalonia Region; and
6. Valencia: Law 1/2020, of 11 June, of the Generalitat, on the regulation of gambling and the prevention of pathological gambling in the Valencian Community.

ii The regulator

The body created in Spain by means of the Gambling Act to regulate online gambling activities on a national level in Spain is the General Directorate for the Regulation of Gaming Activities (DGOJ). It is the only national body entitled to:

1. adopt secondary regulations developing the main gaming regulations;
2. control and inspect the operation of gaming activities;
3. prosecute illegal gaming activities;
4. decide on the claims filed against operators; and
5. collaborate with other Spanish authorities (such as the financial and criminal authorities) in the enforcement of anti-money laundering legislation.

The DGOJ is a body that depends from the Ministry of Consumer Affairs that is entitled to regulate, authorise, monitor, control and sanction gaming activities on a national level, including advertising and commercial communications.

iii Remote and land-based gambling

The offering of online gambling activities on a national level was first regulated in Spain in 2011 by means of the Gambling Act, which sets forth a very strict licence regime. As a general and basic duty, remote gambling operators are requested to obtain from the Spanish national authorities gambling licences for the development of the games. Furthermore, not all types of remote game can be offered, but only those games specifically approved and regulated (more details on the type of games that can be offered as well as on the licensing process are described in following sections).

iv Land-based gambling

As previously mentioned, land-based gambling matters is a competence of each of the 17 autonomous regions of Spain; therefore, the legal regime in each region varies significantly. In general terms, the primary venues for land-based gambling in Spain among all the regions are basically casinos, bingo halls, arcades and betting shops.

Furthermore, each autonomous region has a gambling catalogue with the games authorised to be offered in that certain region. Furthermore, and depending on the specific games to be offered, a different type of premises or venue (e.g., casino, arcade, bingo hall) will be required. Generally, the games permitted in each type of premises are as follows. In casinos the games permitted are roulette, blackjack, baccarat, poker, thirty and forty, dice or craps, chemin de fer and type C slot machines. In bingo salons, generally only bingo games and limited numbers of type B slot machines are permitted. In betting shops, only sports and social betting can be offered, and in gambling arcades only slot machines types A and B are allowed.

Lottery shops or kiosks are also available, but the legal regime is very specific as the number of licences is limited and depends on the authorisation from the two lottery operators licensed (SELAE and ONCE).

v Remote gambling

Remote gambling activities offered by Spanish licensed operators must be addressed to Spanish citizens or residents only, meaning that IP geo-localisation shall be implemented to avoid non-Spanish residents accessing the games. Moreover, offshore operators without Spanish licences must use an IP geo-localisation system to impede Spanish residents accessing their platforms. This means that Spanish residents should only have access to remote gambling platforms managed by operators that have the corresponding Spanish licence.

To apply for and obtain the corresponding remote gambling licences, it is mainly necessary to be an EU-based company equivalent to the Spanish sociedad anónima (Spanish limited liability company), as well as to count with a technical platform duly certified by a recognised testing lab and a .es website. Furthermore, operators with Spanish remote gambling licences must have their internal control unit (main server) located in Spain so the DGOJ has access to it for monitoring and control purposes.

vi Ancillary matters

In terms of equipment homologation, when it comes to land-based gambling, roulette wheels and slots machines have to be homologated as per the applicable regional rules. Moreover, when it comes to remote gambling activities, the technical platform has to be certified and homologated from both a functionality and security perspective. This certification has to be made by a recognised testing lab, and has to be based on the specific technical requirements set forth in the Spanish regulations, it not being to use the certifications issued for other jurisdictions.

In terms of individuals holding relevant positions within the share capital of the operators, or being directors, or personnel directly involved in the operation of the games, there is no need for them to hold a personal licence approved by the regulator. However, they need to identified before the Spanish authorities, including the ultimate beneficial owner.

vii Financial payment mechanisms

There are no specific restrictions of payment mechanisms for gambling, although cryptocurrencies and bitcoins are not permitted. The main requirements that shall be taken into account in terms of payment methods when it comes to remote gambling are the following two:

1. the integration of the operator platform and the payment services provider has to be certified in order to guarantee the security and traceability, and
2. it is completely forbidden for gambling operators to provide credit or financial support to players.