Spanish Lawyer Questions Regional-Federal Regulatory Crossover

25 November 2008

Several regions in Spain are discussing regulating online gambling locally, but with the national government also planning to introduce regulatory legislation, one Spanish gaming lawyer wonders why the regions would bother.

Alfonso Fernández Mañueco, the justice and home affairs councilor for the Autonomous Community of Castilla y Leon, said last week that the regional government was preparing legislation to regulate online gambling locally.

Spain's federal government, however, is already in the planning stages to regulate online gambling nationwide, according to Santiago Asensi, a partner at Asensi Abogados in Palma de Mallorca.

"Why would you want part of the cake when you can take the whole cake?"

"To regulate online gambling in the communities, in my opinion, does not make sense taking into account that Spain is going to pass legislation to regulate online gambling at the state level within the next (one to two) years," Mr. Asensi told IGamingNews. "It has not been drafted yet, but it is expected to be introduced in the first part of 2009."

Spain is divided into 17 autonomous communities, each with the constitutionally protected power to govern autonomously its affairs.

In late 2006, the Spanish federal government enacted legislation allowing sports betting in shops, terrestrial and online, and regional governments were given the freedom to impose conditions as they saw fit.

Madrid's regional government in November 2006 approved by decree the Madrid Community Betting Regulation, authorizing the licensure of three types of activities: betting, both online and off, online bingo and online casinos.

Regulators set a fixed license fee, but placed no cap on the number of licenses. However, the legislation itself stated that only operators with a physical presence in Madrid may apply for a license, thus placing a limit on the number of licensees.

In May 2007 Basque Country followed suit, but offered only three betting shop licenses.

Mr. Asensi said although Madrid and Basque Country have regulated online gambling for nearly two years, in practical terms no online gambling is taking place in either region because no operator has obtained a license yet.

"So, I believe that in Castilla y Leon it is going to be the same," he said.

Other autonomous communities like Valencia and Murcia have expressed their intent to regulate online gambling as well, Mr. Asensi said.

But he sees their ambitions as futile because he does not believe regional online licenses are going to generate much interest -- primarily because foreign operators can already launch their products and take end users from Spain without regulation.

"So why would they be interested in a regional license," Mr. Asensi said. "Why would you want part of the cake when you can take the whole cake?"

Regardless of whether online gambling will ultimately be regulated in Castilla y Leon or other autonomous communities, operators will have the opportunity to offer online games shortly through the state.

Most importantly, according to Mr. Asensi, the new regulations the state will issue in the few next years are said to be in accordance with European Union laws and principles, which means that companies will be able to operate with a license from Malta, the United Kingdom or Spain, for example.

Putting aside the possibility of getting a license from the Spanish government, European Union-licensed online operators may already be able to operate in Spain.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.