Online casinos fuel big rise in Spanish gaming

 

The online gaming market in Spain continues to boom and shows no sign of slowing down any time soon.

According to official figures from the Dirección General de Ordenación del Juego (DGOJ), the Spanish regulatory body, revenues in the first quarter of 2018 showed significant year-on-year growth of 28%.

And a possible relaxation of Spain’s online gaming taxation could give the industry another huge boost.

While online poker benefited from its new shared liquidity pool with France, where players from both countries can now play with each other, the total quarter revenues of €21.5 million for poker is around half that of those made by online casinos.

The official figures showed that the ever-popular online casinos in Spain made impressive revenues of €56.6 million from the New Year until the end of March. That’s a huge increase of 51% year on year.

Online casino games

Statistics show money being spent at online casinos in Spain is split pretty much evenly between the huge selection of online slot machines and the more traditional table games such as roulette and blackjack.

Slots accounted for just over half of the €56.6 million total, at 52.7%. The remainder was split between “live” roulette at 21.2%, conventional roulette at 15.2% with blackjack coming in at 11.8%. The remaining 14.3% was split between many of the less popular casino games.

The Dirección General de Ordenación del Juego report, which is published quarterly, showed that the number of unique users enjoying the Spanish online gaming market increased by nearly 25% to a little shy of 800,000, while the number of times players made a deposit went up by an impressive 58.7%.

The increased player base, together with the big rise in deposits being made can in part be explained by the increased marketing spend from the larger online gambling operators in the country. In the first quarter of this year, they spent 36% more than the same period last year trying to attract more customers. That equates to a hefty sum of €76.3 million in marketing spend, and a good slice of that went on online casino no deposit bonus offers, where new customers can receive a bonus without even having to make a deposit.

While the numbers are already impressive, things could get even better because the Spanish government is studying proposals to relax its taxation of licensed online gambling operators, including casinos, poker operators and sports betting companies. Sports betting accounted for just over half - €81.7 million – of the revenues in Q1.

It was in April that Spanish legislators first proposed cutting its taxes from 25% down to 20%. The measures could come into effect as early as July 2018.

More cash to invest

The operators pay the taxes, so why would a tax cut likely lead to more players in the sector and therefore more revenues being made?

The answer is twofold. Firstly, the cut in taxes would improve the bottom line for the operators. They would effectively make more profit, which means they’ll be able to invest more in marketing. More marketing spend (presuming it’s done well) equals more unique players, as we saw from the Q1 results. Secondly, some of the operators who have not yet entered the Spanish market, just because of the higher tax rate, might now be encouraged to do so.

Added to that a likely increased investment in the number of casino games being offered, and it makes for a healthy situation for the country’s online gaming industry.

Spanish people have adopted online gambling as an exciting and potentially rewarding leisure pursuit. From early, small beginnings, such gaming has now become mainstream, helped in part by that Government regulation, which goes a long way to allaying fears about trust and security.

A recent e-commerce report by the National Commission on Markets and Competition revealed that what it termed as “games of chance and gambling” made up 3.5% of the total amount of money spent online in Spain in the third quarter of 2017! That meant it was the seventh highest business sector.

The report is significant, because the National Commission on Markets and Competition (CNMC in Spanish) is a public body that promotes and defends the proper functioning of all markets, from both the business and the consumer point of view.

Online gambling market

It’s exactly this sort of recognition that will further fuel the online gambling market in Spain, with its use becoming more mainstream by the month.

It will be interesting to see how Q2 of 2018 shapes up, covering April, May and June. While the long-term momentum is clearly in the upwards direction, there may be a small correction in Q2 owing to seasonality.

This is perfectly normal and can basically be put down to the weather warming up and daylight lasting longer. In other words, people can spend more time out and about at this time of year, whereas in the winter months the weather is cooler and having a bit of fun at an online casino, or playing online poker, is more appealing.

Another key factor in Q2 for online gaming is the football World Cup. While, quite logically, you would expect this to boost the sports betting market, it does have a hefty impact on online poker and online casino operators. Why? Because players are spending way more time glued to their television sets, watching the football!