Legislation around Spain can be complicated regardless of just what that legislation is intended to do. With one central government but 17 autonomous regions and two autonomous cities, keeping the country running smoothly in every sense is certainly no 9-5 job. The government needs to balance everything from taxation across the country, to the promotion and maintenance of the tourism market, and so needless to say, keeping up with some of the legislation and regulation can be tricky.

After the Spanish Gaming Act in May 2011, gamblers and developers alike were suddenly faced with new regulations regarding the online gaming industry, but even after 7 years of said regulation, it’s still something that many don’t always understand – this is where we come in. Here, we’ve pulled together a guide on just what the Spanish Online Gaming Tax is, how it came about, and what you can expect to pay. All you have to do is read on to find out more.

The Spanish Gaming Act

The Spanish Gaming Act undoubtedly changed online and land-based gambling and gaming within Spain for the better, but without knowing the full extent of the gambling industry prior to this regulation, it’s difficult to see just how needed it was. This is how things have changed:

  • Before The Act

Prior to the Spanish Gaming Act, gambling was already legal in Spain. In 1977, gambling was legalised by the Spanish government, but there was no denying that the regulations certainly left a lot to be desired. Operators and players alike appeared to be in agreement that they were insufficient, especially where Spain’s geographical layout was concerned. Autonomous regions often left their gambling industry unregulated, and unauthorised operators and game providers were also unregulated when coming from abroad. There appeared to be little, to no protection from potentially malicious online gaming and gambling, and it wasn’t until 2007 that this appeared to be changing.

The Law on Measures to Develop the Information Society passed through parliament in 2007, and gave the Spanish government the much-needed push to start regulating this unruly industry. The gaming industry was a prominent one, and with Spain being one of the most attractive countries for investors, having a regulated gaming and gambling economy would benefit them greatly. In September 2010, this came into play with State Lotteries leading the process and the General Directorate for Gambling Regulation was incorporated.

  • After The Act

May 29th 2011 was a big day for the gambling industry in Spain, as the Spanish Gaming Act was finally passed. This act was created to regulate online gaming and gambling within Spain and even beyond, and featured legislation that would not only ensure a fair market for gamer and provider alike, but would promote a safer environment for those investing their money into the industry.

The Spanish Gaming Act contained clauses that required any gaming or gambling provider to acquire a federal licence or another form of authorisation that is equivalent and legitimate. It was also made a requirement by law for licences to be acquired from any relevant autonomous regions too. To be classed as a ‘gambling’ provider, the service must contain the following:

  • Chance
  • Pay To Play
  • The Existence Of A Prize

Most online games would fall under these categories in one way or another, including the likes of sports betting, bingo, slots, poker, roulette, blackjack and so many more. Providers of these traditional casino games and popular online games alike found themselves needing to adhere to regulation – which only served to weed out those that were less than legitimate! With the introduction of the Gaming Tax, over 50 unlawful websites shut down voluntarily, with plenty more subject to legal proceedings if they refused.

The Online Gaming Tax

The taxation introduced by the Spanish Gaming Act meant that all games providers had to abide and payout depending on their business activity. Each type of game or gambling had its own taxation rates, though most are based upon turnover from the company. Some, however, are based from GGR, which is the gross income minus any winnings from the operators. For unlawful websites and providers, this taxation turned them easily away from the industry, helping the Spanish Government to regulate all kinds of online gaming from the likes of Spanish sports betting to live online casinos and effectively clear out those that may have posed a problem.

The taxation rates are as follows:

  • Sports Betting (Pool) -22% of turnover.
  • Sport Betting (Fixed-Odds) – 25% of GGR.
  • Sports Betting (Exchanges) – 25% of GGR.
  • Betting on Horse Racing (Pool) – 15% of turnover.
  • Betting on Horse Racing (Fixed-Odds) – 25% of GGR.
  • Other Forms (Pool) -15% of turnover.
  • Other Forms (Fixed-Odds) – 25% of GGR.
  • Other Forms (Exchange) – 25% of GGR.
  • Raffles: 20% of turnover OR for non-profits, 7% of turnover.
  • Contests: 20% of turnover.
  • Casino Games (Poker, Bingo, Slots Etc.): 25% of GGR.

The Spanish Gaming Act was the result of a much-needed conversation regarding regulation of the industry. With an unruly industry filled with unlawful gaming sites, and different or no regulations in autonomous regions, the market certainly wasn’t one that many were willing to risk. However, with the implementation of the act in 2011, and the resulting Gaming Tax, operators are more legitimate than ever before, providing players and investors alike better peace of mind when they gamble.

Hopefully this has given you the insight you needed for the Spanish gambling industry and just what the taxation requires and means for the country. What the future holds for betting, gaming and gambling in Spain and its autonomous regions has yet to be seen, but with new technologies and this improved regulation, it’s only a matter of time before we find out.