Spain has granted online gaming licenses to companies that include industry giants Bwin.party, Sportingbet, Ladbrokes, William Hill and 888 Holdings in a move that will raise tax revenues for the cash-strapped government and remove the regulatory uncertainty that has hung over operators.
As many as 59 operators have applied for licenses in exchange for a tax rate of 25 percent of gross gaming revenue. The government has raised around €70 million in back taxes in recent weeks from operators who had been taking bets without formal licenses.
But it’s worth it for companies like Bwin.party, which says around 4 percent of its revenues were generated in Spain last year. The company is known in Spain through its shirt sponsorship of soccer powerhouse Real Madrid. The company said it will offer poker, bingo, blackjack and roulette in addition to sports betting.
Ladbrokes, which already runs 192 retail betting shops in Madrid and Aragon under the Sportium joint venture, will offer a range of sports bets and casino and poker games on a new Spanish-facing website.
Analyst Nick Batram of Peel Hunt said the license awards were good news for operators, but noted that the market would initially be crowded as many companies fight for a share of the more than €800 million Spaniards expected to be betting online by 2014.
The amount of money wagered on all games of chance in the country rose by more than €7 billion from 2008 to 2010 and stands currently at more than €27.3 billion, according to official data.
Tapping into that is vital for the government, which is struggling to refinance €98 billion of debt amid falling GDP, soaring unemployment and a budget deficit of €52 billion.
The situation is so bad the government is considering revising tax and labor laws to encourage U.S. casino giant Las Vegas Sands to build a US$35 billion resort and gaming complex known as EuroVegas in either Madrid or Barcelona, a project that would be about half the size of the Las Vegas Strip on completion.