Spain’s Online Gaming Industry Takes A Step Back In Q3

In the third quarter, Spain’s online gaming industry took a step backward, as the only vertical one to report a sequential gain was sports betting.

Figures published on Wednesday by the regulatory body of Spain’s Dirección General de Ordenación del Juego (DGOJ) show that locally licenced online gambling operators generated revenue of EUR 191.2 million in the three months ending September 30, a modest increase of 2.8 percent from the same period last year but down 5.6 percent from Q2 2020.

With EUR 85.2m, sports betting regained the revenue crown, down 15.4 percent year-on-year but up by one-quarter from Q2 2020. The biggest year-on-year hit was pre-match betting, with revenue falling 21.4 percent to EUR 31.5m while live betting was down 9 percent to EUR 52.6m. Sequential gains of almost one-third apiece were recorded by both segments.

Despite horserace betting actually generating negative revenue of € 1.3 million, betting’s sequential surge came despite racing turnover more than doubling year-on-year and almost tripling sequentially.

Online casino revenue was the mirror of sports betting, rising 26 percent year-on-year to EUR 83.9 million while sequentially declining 10.3 percent. With revenues of €49.8m, Slots remains the online casino breadwinner, up almost 30 percent year-on-year, but down 4 percent from Q2. More extreme versions of this phenomenon were posted by Live roulette, up 42.6 percent year-on-year but down 16.8 percent sequentially to € 22.4m.

Online poker revenue amounted to EUR 23 million, up 12.4 percent year-on-year but almost 40 percent off the sum of Q2, indicating that the flower is most certainly off the rise in pandemic poker. Cash games had an even greater sequential hit, dropping 48.6 percent to EUR 6.5 million, while tournaments dropped 35.4 percent to EUR 16.5 million. Bingo sales came in just under EUR 4 million, up 22.6 percent year-on-year and down 22.9 percent sequentially.

Licensed gambling operators in Spain raised their advertisement budget significantly to just over EUR 150 million in Q3, with ads sequentially tripling to EUR 51.8 million, while incentive deals shot up 560 percent to EUR 82.4 million. Affiliate ads rose by 40.6 percent to EUR 9.4 million and sponsorship spending increased by 51 percent to EUR 6.5 million.

As Spain’s new online marketing restrictions take effect, these figures will dip significantly in quarters to come, although the last-minute flurry of new sponsorship deals signed just below the wire will briefly raise that column. Under the new regulations, all current marketing contracts will expire in the spring, with penalties of six to seven digits for marketing violators who may also face up to six months’ suspension of licences.

As the DGOJ launched a new consultation on ‘safer online gaming environments’ this month, more upheaval is likely. Worryingly, on Monday, a number of Spain’s opposition parties announced an agreement to pressure the government to raise online gambling tax rates.

The DGOJ is also facing an uncertain future after the government approved a budget earlier this month that includes a new Ministry of Consumption and Gambling, seemingly aiming to grant even greater authority to control gambling operations to Consumer Affairs Minister Alberto Garzón, who largely drove the marketing crackdown.