Spain welcomes in the bulls
With Spain poised to be the next European country to regulate, gaming consultant Eduardo Morales Hermo surveys the market's potential.
With 35 million adults, an estimated 370.000 active online players and the potential to simultaneously reach several Latin American Spanish-speaking markets, Spain, Europe’s sixth largest economy (Source: IMF), is increasingly attracting the attention of the international egaming industry.
Market size
Although official figures are not available, according to AEDAPI, the Spanish Association of Internet Bettors bringing together some of the main internet betting companies active in Spain, this market generated 315m in profit in 2010. This represented year-on-year growth of 19% on the 264m achieved in 2009.
Online betting and gaming in Spain – market Value and growth
Source: AEDAPI)
Market breakdown
Sport betting remains Spain’s most popular form of online betting and gaming, achieving 21% year-on-year growth and 110m in profit last year.
Source: AEDAPI
70% of this activity was unsurprisingly accounted for by football, followed by tennis and basketball, with 14% and 10% market share respectively.
Source: AEDAPI
Online poker is however also growing fast in Spain, generating 85m in net gaming revenues in 201, an increase of 26% compared to 2009. Finally casino, skill games and games generated 120m with 14% increase over 2009.
The regulated market
Considering the potential impact of the new regulation in the light of what happened in Italy post-regulation, Spain is projected to increase its offshore 315m profit from dot.com activity in 2010 to around 400m for 2011. Using the reference point of other recently regulated markets, there will be a minimum increase of 50% on the projected figure for 2011 to 600m in the first full year following regulation.
These figures are however based on a scenario of all products being regulated. At present, it is unclear if online bingo and in-play betting will be included in the forthcoming regulation. Not including these products, particularly in-play, would of course reduce turnover.
Gambling data business H2 Gambling Capital has forecast a Spanish egaming market worth 438m in gross gambling yield (GGY) for 2012 – assuming regulation becomes effective by the end of this year- moving to 641m by 2015, based on all current major dot.com operators being licensed in the market for all products. The whole Spanish regulated gambling market is forecast to be worth 10.1bn in GGY 2012
The big question however is when most of the largest online operators will obtain operating licences and be active in the market. Even though the Spanish federal government has said it intends to issue the first licences before the end of 2011, this lead time looks frankly unrealistic, based on the time it took Italy and France to issue the first licences for a more limited product base.
As for when operators are likely to be offering egaming products into the Spanish market on a regulated basis, the first six months of 2012 would appear to be an achievable time frame.