Mauro De Fabritiis is partner at MAG, a strategic consultancy company founded in 2004 and European leader in regulated gambling markets.
Just as expected, the Spanish Regulator (Dirección General de Ordenación del Juego or DGOJ) published on December 16th the procedure that allows interested operators the entrance in the Spanish online gaming market.
With this framework, that will be active from December 18th 2017 until December 17th 2018, operators can apply for general licenses, required to offer gaming in Spain. Apart from general licenses, operators also need to obtain the specific singular license for the game they are interested in (for example, fixed-odds sports betting, roulette, poker, slots, etc.).
This is the third time the market opens for interested operators, after the initial regulation in late 2011 (that supposed the granting of general licenses to 53 companies) and the second opening in late 2014 in parallel with the regulation of slots and betting exchange (where 10 new operators were approved). According to our estimations, around 10 new operators will apply for general licenses within the current framework, a number that may increase due to the longer timeframe defined that may allow additional operators to better analyze the market and understand its potential.
The procedure to apply for general and singular licenses
The biggest change of the new tender compared to previous ones is the 12-months period starting from December 18th 2017, very different to the 1-month period of previous openings of the market. This means that operators have a much longer timeframe to prepare the extensive documentation required by DGOJ and prepare the certification of the platform and its components. It is important to note that operators can apply in parallel for both general and singular licenses in one unique application.
After the operator apply for the licenses, DGOJ has a maximum of 6 months to approve the application and grant a provisional license. This provisional authorization will be a final license after the delivery of the definitive certification in a period of 4 months since the provisional granting.
Fig 1. Licenses open window in the Spanish market
On the requirements side, no changes versus previous tenders, being the most relevant aspects for operators:
⦁ PLCs or equivalent with 60.000€ share capital
⦁ Companies can be located in Spain or any other European Economic Area territory
⦁ Guarantees of €2M per general license (€0,5M in case of contests general license). Guarantees are reduced to a variable percentage per game after year 1 with a minimum of €1M
⦁ Presentation of documentation that confirms the operator representation and financial and technical capability to operate the business in Spain
What to expect of the Spanish market
Even if smaller compared to other European markets like Italy and France, the Spanish market shows a sustainable growth and offers possibilities for new operators with clear vision and strategy for the market.
Fig 2. Perspectives for the Spanish online gaming market
We, as MAG, have published some previous opinions on the Spanish market with our detailed view and forecasts for the sector in the medium term, and it seems clear that the growing trend will continue driven mainly by the following aspects: the growth of sports betting, the establishment of slots, the relevance and impact of live games, the introduction of the much needed international liquidity and also by the entrance of new operators that will push the market with bigger and new marketing efforts.
In a glance, good times ahead for the Spanish market and lot of potential for new comers willing to invest in the country.