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Sportsbooks are suffering in Spain

sportsbooks-are-suffering-in-spain

The Sportsbooks industry in Spain suffered significant losses due to the Covid-19 pandemic and the bans instituted in Spain by the Gambling Regulators and the Consumer Affairs Ministry. The main hit was on marketing activities for gambling operators, whose discussion took off back in February with a draft proposing a ban limitation timeline of 8 pm to 5 am. However, the timeline never appeared in the draft suggestion to the European Commission. Instead, a 1 am to 5 am limitation was executed.

The provisions in the RDCCGA or the Royal Decree on commercial communications and gambling activities have not gone into effect yet. However, the outcomes will be more devastating than the ban on sponsorships and player incentives. The two have led to a decrease in the number of active players. The decrease was by 29.4% in the first quarter of the year back in April and June. New registrations on Sportsbooks also halved and the drop was by 41.5% in the same period.

The heaviest blow

“The Heaviest Blow” was on sports game lovers and Sportsbooks providers advertising ban that now includes sponsorships. The Ministry of Consumer Affairs already sent the new ban to LaLiga to end all contracts for sponsorships from betting and gaming Sportsbooks by the end of the leagues season in 2021. The league will lose 35% of sponsorships for team uniforms, including T-shirts, 41 out of the 42 teams playing in the league will lose support in addition to the €80 million lost due to the advertising ban and the pandemic.

Online sportsbooks, casinos and slot sites such as SlotJava are not the only gambling institution hit by the new laws. The land-based operators weren’t spared. The new regulations require more distance between the operator establishments and schools. The institutions also require display health-related dangers/ warnings at the premise entrances.

The government states that these rules aim to reinforce self-awareness amongst the consumers and promote healthy gambling activities/ product consumption while reducing problematic gambling. The Ministry aims to control regulation and awareness similar to the regulations for “Tobacco Products.”

The Operators Comeback 

Jdigital criticizes the new laws set forth by the Consumer Affairs Ministry, stating that “the rules have no basis in scientific studies or data provided as proof” and therefore can be termed as “Ideological Laws.” JDigital believes that the rules will be “Counterproductive.” “The government rules and bans on gambling operator’s activities will lead to an increase in illegal gambling, leaving “the consumers” the government is trying to protect at the mercies of unlicensed and unscrupulous gambling operators,” Vota says.

JDigital provided a similar response after the Dirección General de Ordenación del Juego submitted identical changes to the European Commission. The online website provided several instances indicating that the stated health problems resulting from gambling operations were not based on fact or scientific data/ studies. Mikel Arana, the Director-General and Nations Regulator, said that “gambling wasn’t a health-based issue.” At the same time, the University Carlos III of Madrid further confirmed the statement by showing a gambling rate of 0.3%, and around 84.9% of the population in Spain engages in one form of gambling or another. These represent the lowest rates compared to many other countries not only in Europe but around the world.

The Expected outcomes 

The statement “Learn for your mistakes and those of others,” would apply. The country and the government should not follow in the same footsteps as Italy. The European Commission imposed similar advertising bans in the country and resulted in over €100 million in losses in a single year during the Serie A season. Jdigital predicts a similar fate for the LaLiga Season if the government proceeds to enact the prohibitions. “The current situation is already dire after an investment of €372 million in marketing, the operators can predict a loss of more than €90 million in revenue due to advertising,” states LaLiga.

All these prohibitions are a learning curve for Sportsbooks operators. For instance, more operators exploit the fact that the advertisement ban does not include informational content. Operators’ brands and logo information can appear on the screen during the season without breaking any of the rules. It is something that occurred during Serie A in Italy after the executed ban on advertising. Many operators also shifted their focus to retail outlets, and the brands can appear on the highways advert boards. The omnichannel brands are also increasing their presence online, providing more opportunities for operators. The same situation is happening in Sweden, with the outcomes being the increase in black market gambling sites in the country.

The future 

The Consumer Affairs Minister Alberto Garzón consultation on safeguarding players through action, prevention, intervention, control and raising awareness amongst the masses/players has begun the debate and execution of the laws. The first change will be the integration of the databases in Spain into a single unit instead of self-exclusion and region autonomy.

There are many arguments about the government actions and activities, stating that instead of reducing the potential harm on consumers, the government is increasing the chances of black market deal development and growth. However, no one is paying attention and as witnessed in Germany. Italy and Sweden, Sportsbooks will be facing more hurdles sooner.

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