Everything you need to know about the Online Gaming License application proccess in Spain

The Spanish Regulator (Dirección General de Ordenación del Juego or DGOJ) published on December 16th 2017 the details on the procedure that allows interested operators the entrance in the Spanish online gaming market.

With this framework, that is active since December 18th 2017 and will last until December 17th 2018, operators can apply for general and singular licenses, required to offer gaming in Spain. Operators are able to offer fixed-odds betting, tote betting, casino games (slots, roulette, black jack, baccarat and complementary games), poker, bingo and contests, a popular product in Spain especially in certain media formats. Pending games to be regulated are virtual betting and other live formats for casino games (currently just live roulette is allowed), products that very probably will be allowed in the near future based on the last publications from DGOJ.

This is the third time the market opens 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 10–15 new operators will apply for general licenses within the current framework, a number that may increase due to the longer timeframe defined by DGOJ, that may allow additional operators to better analyze the market and understand its potential.

The license system in Spain

Spain has a “double license” system to operate in the market. Operators need to firstly obtain a general license to exploit online gambling, existing 3 different licenses (betting, other games and contests). General licenses can only be applied for during the corresponding opening periods defined by the Regulator.

In addition to general licenses, operators also need to obtain the singular licenses corresponding to the games they want to offer (sports betting, roulette, slots, poker, etc.). Differently to general ones, singular licenses can be applied for anytime as long as the operator has the associated general license or at the same time.

DGOJ website

Under this scenario, it is expected that a series of new operators (especially from international environments) will ask for licenses aiming to launch from mid-2018 onwards. Based on our experience as MAG, operating in the Spanish market since 2008, there are many reasons why operators should invest in Spain:

• Market is growing and not mature (22% CAGR 2014–2017)
• Taxation level is affordable (even if there is room to improve it and equal it to more competitive regulated markets)
• Attitude of the Spanish customers toward gambling is positive and improving
• DGOJ requirements are clearly defined and manageable by operators
• Competition or regulatory restrictions in some countries in Europe push operators to target attractive markets to improve sustainability of the business

The process 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.

Source: MAG

What are the main requirements for operators

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 localted 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 are the steps in the application process?

Regarding the tasks that operators need to perform to apply for the licenses, the process could be summarized as follows:

• Step 1 — Operator applies for the license: Operators need to send to the Regulator an extensive list of corporate, economic and technical documentation. In this sense, it is important to note that the operator also needs to send the “preliminary certification report” from one authorized laboratory. This is a “lower level” certification that will be completed in the following steps when the final certification needs to be delivered.
• Step 2 — DGOJ grants the “Provisional License”: In a period of maximum 6 months since the application, DGOJ will grant the provisional license. In this moment, the operator is allowed to launch and start offering its gaming offer and has a maximum of 4 months to present the “Final Certification Report” that DGOJ will use as basis to homologate the operator´s system and grant the Final License.
• Step 3 — DGOJ grants the “Final License”: In a period of maximum 6 months since the provisional license was granted, DGOJ will review the “Final certification” and issue the “Final License” for the operator.

MAG is a strategic consultancy company founded in 2004, leader in gambling regulated markets in Europe. During the last 14 years, MAG has supported Regulatory Agencies (Italy, France, Spain and Colombia) on the definition of the suitable regulatory framework and international firms mainly on strategy, regulatory compliance, innovation, business development, start-up and M&A.

Contact us:

• Mauro De Fabritiis (Partner MAG): mdefabritiis@mag-ca.it
• Mario Chamorro (Consultant MAG): mchamorro@mag-ca.it