17 Dec, 2020 @ 13:19
4 mins read

Will the New Royal Decree Influence Spain’s Gambling Industry?

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In early November Spain’s Council of Ministers approved an extraordinary law limiting the advertising powers of gambling companies in the country. The ‘Royal Decree on Advertising’ requires all gambling companies in Spain to;

  • Only air TV commercials between 1am and 5am
  • Feature ‘age restriction filters’ on all digital and social media adverts
  • Refrain from running endorsements from any sports athletes (retired or active) and celebrities
  • Restrict Welcome Bonuses to a maximum of€100
  • Sever all sponsorship ties with professional sports teams by the end of the 2020/2021 season

The Decree has already been welcomed by opponents to online gambling, who see it as a victory for their opposition. However, it could do much more than limit the powers of Spain’s gambling industry, rather it could destroy it.

Read on to find out how the ‘Royal Decree on Advertising’ could cripple Spanish gambling.

Online Stagnation

All around the globe gamblers are choosing to shun land-based casinos and sports betting venues in favour of their online counterparts. However, that transformation in consumer attitudes is not complete as many online companies remain relatively unknown.

One way that online companies have sought to increase their profile is through celebrity endorsements and high-profile sporting partnerships. The limitations enforced on the industry by the decree effectively cut off this means of advertising.

What this does is maintains the Status Quo in Spanish gambling, making it nigh on impossible for great, online gambling providers to stand out from the crowd and increase the reach of their brand.

This will most likely result in the online sector in Spain stagnating and being left behind by other major European countries. The UK for example has a large online gambling growth, with lots of providers on the market for games such as generic online casino games, slots, poker and bingo.

With European countries like Spain having the possibility of tighter regulations of gambling advertisements, it may mean that gambling companies and providers instead opt to develop their gaming experiences in countries like the UK where the regulations are not as strict on gambling advertisements. 888 Ladies is a popular online bingo site in the United Kingdom who use advertisement to reach their target audience and make them aware of the latest deals and promotions. Therefore, sites like 888 may invest more in their current sites for the citizens of the UK as they will be able to target their players more, something that could possibly be heavily restricted in Spain if the Royal Decree comes into force.

La Liga Losing Out

In May 2019 English football club Huddersfield Town were relegated from the Premier League, finishing rock bottom of the table with a measly 3 wins in 38 games. Their reward for that terrible showing was £96 million in TV revenues.

That was only €350,000 less than Atletico Madrid received – in the same season that they won the Europa League – in total TV revenues.  In addition to TV money, Huddersfield Town received £4 million from Asian sports betting company OPE for their front of shirt sponsorship in that season.

What all of that tells us is that English Premier League clubs are at a significant advantage to La Liga clubs already in terms of revenues. With such a dearth in TV revenues, shirt sponsorships are vitally important to Spanish top tier teams.

The ‘Royal Decree on Advertising’ directly cuts off a main avenue of revenue for 7 of the current La Liga sides. For the top sides like Real Madrid and Barcelona who have no shortage of suitors for kit sponsorship will likely not be affected by this decree.

However, for the small clubs in the league the prohibition of gambling sponsorships could be catastrophic to finances. In a post-Covid era in which clubs will already be struggling to keep up with the bills, a cancellation of gambling sponsorships is almost as foolish as it is reckless.

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Teams like Huddersfield Town – who add little to the quality of the Premier League – already earn more than top La Liga sides from TV money. Gambling sponsorships help to narrow this financial gap and they will soon be outlawed.

Individual Losses

The least talked about aspect of the Royal Decree is the limitations placed on welcome bonuses and offers. Shirt sponsorships with La Liga clubs and a blanket ban on gambling advertising during the day rightly take the headlines, but the impact on individual players should not be ignored.

The gambling market is incredibly saturated at the moment which means that companies are having to work hard to gain new customers and keep existing ones loyal. One way in which they do this is by offering players financial incentives.

Welcome offers and in-play bonuses form a big part of this and help to make gambling appealing and potentially lucrative for individual players. The 100 Euro limit on offers and bonuses is not only prohibitive, but it is downright unfair on gamblers.

Only a small percentage of gamblers play for profit with the majority playing to unwind and relax – gambling is a hobby. It can be an expensive one though, so welcome bonuses and offers help to make gambling more affordable for thousands of players.

The financial limitations enforced under the Royal Decree will make gambling less affordable for players and directly impact their finances.

It will of course limit companies in new customer acquisition, which is good news for opponents of gambling, but the effects that it will have on individual’s finances is undoubtedly a bad thing.

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With competition of online providers fierce, gambling companies rely on their bonuses and promotions to attract new players.

In Summary

Gambling is a topic of contention in almost every country on the planet and the pros and cons of it can be argued forever and a day.

In order to mitigate the potentially harmful societal impacts of the industry there are a number of options that governments can take. However, the actions taken by the Spanish government in November are not the answer.

Individuals will lose out from a less appealing bonus market, the gambling Status Quo will be maintained, and football clubs will lose money. Perhaps the Council of Ministers should consider rolling the dice one more time in the hope of coming up with a better solution.

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