Upping the ante on Spanish gambling

MADRID--With new e-gaming laws and the prospect of EuroVegas coming soon, Spanish gambling is the up and up. This country that so loves its "juegos" is becoming a European and world capital for both online and offline betting.

Starting this week, the Spanish National Gaming Commission is issuing licenses as it tries to legitimize and tax online casinos. SmartPlanet spoke with Nilda Cerna, who works for GranViaOnline--the same name as Madrid's lifeline--which is trying to brand Spanish e-gaming as a similar gambling lifeline for the world.

Only existing in Spain for the last ten years, "the whole (e-gaming) sector is an innovator," says Cerna. "The changes come with the technology."

Much of this innovation and creativity comes with the advertising. In many cases, advertising any sort of gambling in Spain is technically illegal on TV and radio and in newspapers, based on the time of day. Cerna says you can advertise during sporting events, but these spots usually have the highest cost.

One of the most visible marketing is certainly the e-gambling site "Bwin," which is on the front of each of the white Real Madrid jerseys. This is costing Bwin a whopping 45 million euros for three years. Of course, all around Europe and even in the Spanish champion South African World Cup, the football stadium rails are lined with online gambling ads. However, there still aren't many laws governing the online advertising of gambling.

Online gambling in Spain has seen a boost from the recession. Cerna reckons it's because it's more economical to place a two euro bet on a virtual table, than a 5,300 euro one to compete in this weekend's poker tournament at Madrid's Casino de Torrelodones. Plus, she says, with nearly a quarter of the population unemployed, online gambling "is rising for a natural reason because they have more time to play."

With Spain's e-gaming up 60 percent in 2011, popularity is certainly growing. She says that the industry is witnessing slightly smaller deposits into their online accounts because everyone is waiting for the new law that comes fully into effect this summer.

Up until recently, online gambling has been in a bit of a gray area--it wasn't legal nor illegal. By the end of this May, online gambling will be full in effect, making it the second European country to implement industry-wide reforms, after Denmark. Starting this month, with complete allocation by June, the Spanish National Gambling Commission will issue their first rounds of licenses. This allows them to operate within the law, while paying a 25-percent tax on net income earned in Spain. More than 55 licenses were requested, but it is unknown how many will be approved and issued, which is why gamers are less likely to put too much money into their online accounts.

"As always, the winners must pay (taxes,) but they don't always declare," Cerna says, "but now it's easier for the government to investigate." Smaller online "salas" or gambling rooms help to facilitate the monitoring of winnings. Cerna says, however, that big gamblers go to other countries, like the UK and Spain-adjacent Gilbrator, Portugal and Thailand, to avoid taxation.

OnlineCasinoReports.com says that Spanish online gambling is set to "boom" in the next five years. They believe that Spain's online gambling market could grow to around 680 million euros in the next three years. Spain had about 600,000 online gamblers last year, which was a 60-percent increase, and this industry generated about 370 million euros in profit. Clearly, taxing these amounts would be a huge revenue for the Spanish government.

GranViaOnline is only in Spain right now, but, like many companies, is looking to expand into Latin America in the future. This industry is also monitoring the U.S. laws to see when opportunity may knock in the huge and eager market there. But, for now, Spain is a great place to start with its grand tradition of "juegos."

Cerna says, along with video poker, the Spanish have a special love of bingo and "mus." Mus is, with poker, one of the two most popular card games in Spain. Mus a traditional Basque game played on a Spanish deck of 40 cards--which has no eights, nines or tens--with two two-player teams. It involves quite a bit of calling out and goes on for up to four rounds, like Texas Hold 'Em.

SmartPlanet has already talked about the Spanish love of gambling. Last November, SmartPlanet first spoke of Madrid being set as the next Las Vegas.

Casino tycoon Sheldon Adelson of the Las Vegas Sands Corporation seemed set to invest 16.9 billion euros over 13 years to build an entertainment complex in the suburb of Valdebebas, near the Barajas Airport. It promises to be a "macroempleo" with more than 200,000 direct and indirect jobs for by-far Spain's most populous city.

Well, now there's competition as Barcelona has placed their bets too. The ante has been upped to an investment of 18 billion euros and Adelson said last month that it looks like the winner will be whichever city does the "friendliest business."

Cerna, who happens to live in Madrid, loves the idea of bringing EuroVegas to Madrid. She thinks "Madrid more possibilities than Barcelona." She admits that Barcelona has the attraction of the sea and that it also is a tourism hotspot, but that Madrid is much "easier legally, with more options than Barcelona."

The contract negotiation is down to conditions like if they, like in Atlantic City, can lift the smoking ban that has only been in place for a year, within the EuroVegas grounds. There is also negotiation with unions over labor contracts.

From football to language to taxation, Madrid and Barcelona are always at odds, even when Spain won the World Cup. The Community of Madrid's vice president Iganacio Gonzalez said last month that Adelson is certainly focused on Madrid and that the region wouldn't "waste its time" in a bidding war with Catalonia. Madrid promises to attract 11 million tourists a year to EuroVegas and continues to be confident it will win the contract.

No matter who wins what, it's clear that the Spanish will continue to bet.

Photo: Andres Ruido, Flickr

This post was originally published on Smartplanet.com