The surge of online gambling in Spain.
The Spanish online gambling market is thriving as never before. The gambling authority, DGOJ, unveiled a staggering 17.7% increase in revenue for the second quarter of 2020 compared to the previous year. However, the country aims to tighten gambling laws even more, leading to increased criticism of state-run services. What can we anticipate in the future?
Fueling factors: online casinos and poker
Concurrent with the Spanish gambling market reform, new regulations are being enforced, and the country is witnessing a boom in the online sphere. Although turnover saw a 4.2% decline from the first quarter, the second quarter yielded a vital 17.7% increase compared to the same period in 2019.
DGOJ reports unveil that increased revenue in online casinos and poker countered a downfall in sports betting. Bookmakers took the hardest hit, mainly due to the coronavirus pandemic physically shutting down all sporting events globally. Sports betting revenues, therefore, amounted to €68.1 million - a 20.8% decrease from 2019 and 38.4% decrease from the first quarter.
Sports bets dropped by a massive 49% to €288.9 million, while live betting remained stagnant at €698.6 million. Across all betting products, stakes also deterred to €1.05 billion - a 40.4% reduction. The sector is still striving for a full recovery, with potential stricter limits on betting advertisements as an imminent threat.
Online casinos significantly outperformed in the second quarter. Revenue surged by 36.5% year-on-year, hitting €93.5 million. Customer wagers escalated by 25.3% to €2.86 billion. DGOJ suspects that many gamers have altered their gambling habits due to the COVID-19 crisis. The online poker market mirrored the trend, shooting up 97.4% to €38.2 million.
Which games fared well?
The robust performance of online casinos is primarily driven by two segments: slot machines and live roulette. Slot machines generated €51.9 million - a 30.4% increase from the previous year and an 19.9% surge within the quarter. Live roulette also registered notable growth, with revenues jumping 75.7% compared to 2019, hitting €27.0 million.
Despite the uptick in revenue, the second quarter saw a decline in the average monthly number of active customers. This applied to newly opened player accounts, too. Averaging 642,938 players, the second quarter experienced a 25.4% decrease from the previous year. Monthly registrations dipped by 41.0% to 137,930.
Meanwhile, licensed online gaming providers in Spain spent considerably less on advertising in the second quarter. €40.6 million was devoted to advertising - an 50.6% reduction from 2019 and a 65.7% decrease from the initial quarter. The decline is mainly due to stringent advertising regulations, which, among other things, ban broadcasting on television and radio between 1:00 a.m. and 5:00 a.m.
Ban on sponsorship on the horizon?
Bonus payments also depreciated in the second quarter, as they were prohibited from late March till early June as part of stricter advertising regulations. Operators paid less than €12.5 million in bonuses, which reflected a 57.3% year-on-year decline. Marketing expenditure on affiliates also dwindled by 23.4% to €6.7 million.
Sponsorship was the only segment that saw increased marketing spend during the quarter, with providers investing around €4.3 million - an uptick of 16.2%. But sponsorship might soon be discontinued, as the Spanish government recently presented a decree to the European Commission for legal approval, aiming to impose a universal ban on sponsorship.
This harsh measure resulted from a cross-party agreement signed by Spanish Prime Minister Pedro Sánchez (PSOE), Podemos leader Pablo Iglesias, and Consumer Protection Minister Alberto Garzón in July. The decree plans to align gambling advertising guidelines with those in the tobacco industry, prompting reactions from the European gambling association EGBA.
Increasing public disapproval of state providers
The EGBA voiced skepticism towards the new regulations, attesting to the Spanish national online gambling association Jdigital. Measures for consumer protection are salutary, but the restrictions (including the ban on sponsorship) would be futile. Moreover, state-run gambling was seemingly promoted in the planning.
Jdigital voiced their concerns about advertising restrictions in September, especially targeting the two state providers, ONCE and SELAE. It remains uncertain if state gambling operators are held to the same standards as their private counterparts. Also, Jdigital wondered if these companies are genuinely non-profit organizations. The future remains uncertain.
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Source: www.onlinecasinosdeutschland.com
