Spain’s online gambling market stumbles out of the gate in 2017


spain-online-gambling-revenueSpain’s regulated online gambling market saw revenue jump by one-fifth in the first quarter of 2017, despite reduced marketing activity by locally licensed operators.

Figures released this week by Spanish gaming regulator Dirección General de Ordenación del Juego (DGOJ) show total online revenue of €122.7m in the three months ending March 31, nearly 20% higher than the same period last year but a 2.4% decrease from Q4 2016’s total.

While nearly all gaming verticals posted year-on-year improvement in Q1, only sports betting improved from Q4 2016. Betting revenue was up 2.6% sequentially to €71.6m, a 22% rise over the same period last year. Sports betting turnover rose 4% to just under €1.4b, of which nearly 70% was spent on in-play wagers.

The casino vertical reported revenue rising 30% year-on-year to €32.5m, although this was down 9.5% from Q4’s total, while casino spending rose 31.3%. Slots and roulette reported nearly identical revenue of €13.7m, representing 42% year-on-year gains for both products. Blackjack improved nearly 18% to €5.1m while baccarat revenue managed to stay flat at €2.5m despite turnover falling nearly 60%.

Online poker reported a year-on-year revenue rise of 2.4% to €15.1m, despite poker spending falling 1.8%. The spending slide resulted from a 12.3% fall in cash game stakes, while tournament fees were up 11.7%. Cash games accounted for 64.4% of online poker spending but only 42.6% of poker revenue.

As for the market’s less popular verticals, bingo revenue rose 6.9% to €2.4m despite spending falling nearly 10%. Competitions saw both revenue and spending decline more than one-third.

The Q1 revenue rise came despite operators reducing their advertising spend to €28m, down 14.3% year-on-year and 11.7% sequentially. Bonus expenses fell 9.5% to €17m while affiliate costs rose 6% to €5.2m. The number of active online users rose 9.5% year-on-year to 603k, although this was down marginally from Q4.

While Spain’s market appears relatively healthy, industry association Jdigital issued a report last month that claimed less than 20% of Spanish-licensed online operators are currently turning a profit. Jdigital president Sacha Michaud used the report to reiterate his outfit’s call for the government to reduce operators’ tax burden, which claims one-quarter of online revenue.

In March, new DGOJ director Juan Espinosa Garcia agreed that taxes were too high, telling Yogonet his aim was to “relax the tax intensity” in the hopes of channeling more Spanish players away from internationally licensed online operators and toward Spanish-licensed sites. However, Garcia acknowledged that this was ultimately a decision for government officials, who often take more short-sighted views of gambling tax revenue collection.