Sportsbooks operators have dubbed the year 2020 as the “Pain in Spain.” The term is an attribute to all significant losses and negative impacts resulting from government-related bans and the novel pandemic (Covid-19). The two led to a decrease in customer acquisition, lower brand recognition, and above all, massive losses in revenue. In the first quarter of the year, there was a 24.9% decrease and a 25.3%yearly regarding active players on Sportsbooks. The registrations also went down almost by half, reporting a decrease rate of 41.5%. The damaging effects were due to the provisions passed by the Royal Decree on Commercial Communications of Gambling activities, the advertisement ban, and the clamp on player incentives.
What’s more, a “sponsorship hit”!
The government has dropped a “sponsorship hit” on teams participating in the LaLiga. The teams are to terminate any sponsorship agreements with Sportsbooks at the end of the 2021 season. At a glance, the impact of such a hit is not visible. Breaking it down, over 35% of the current sports shirt sponsors are gaming, slot sites such as slotjava.es, betting organizations or businesses. According to the European Gaming and Betting Association (egba.eu), out of the 42 teams partaking in the 2021 LaLiga season, 41 teams depend on these sponsorships in one way or another. The association already estimates a loss of over €80 million in advertising dues.
The land-based operators have not been spared either with increased restrictions on opening time and closing. The establishments require a specific distance from residential and school areas. At the same time, the operators have to display health and danger warnings at the venues and, most importantly, entrances. The government aims to increase awareness and ensure healthy consumption of the stated gambling products similar to tobacco products! The question is, “Will it Work?”
Jdigital indicates that the government efforts “Will not Work.” The government should learn from what is currently happening in Italy, Germany, and Sweden, some of the European Countries where the European Commission has imposed gambling bans or rules. For instance, the Serie A in Italy incurred €100 million in losses during the 2020-2021 game seasons. LaLiga is expected to lose €90 million in advertising revenue, the association indicates.
LeoVegas reported news logos appearing on the screens during the Serie A season in Stadio Olimpico. The advert fell within the imposed advertising laws as there was no limitation on informational content. At the same time, the operators were leveraging retail outlets with brands such as Snai, Goldbet, and Eurobet benefiting from the collaboration. The brand would appear on high streets, and the omnichannel would increase its online presence as well. Cirsa, one of the prominent Spanish Sportsbooks operators, is expected to follow suit in its design strategy.
More arguments arise from the outcomes in Sweden after regulating the gambling market in 2019. The result was an increase in black market deals where consumers had no protection, and unscrupulous operators could hide their operations offshore and exploit the people.
It’s an Ideological Law
The changes in effect were expected and well-intentioned by the operators and the government, respectively. However, operators still dub them an “Ideological Law” as it lacks the essential facts supporting scientific data. The dirección General de Ordenación del Juego in July of 2020 submitted new regulations highlighting a public health challenge with gambling and Sportsbooks online entities. In response to the allegations, the Jdigital described the claims as “Ideological and lacking in facts.”
Mikel Arana, the nation’s regulator director-general, further asserted that gambling was not a health-based problem for individuals engaged in gambling activities in the country. In October, the University Carlos III of Madrid conducted a study confirming that 0.3% of the entire gambling population in Spain suffered from problematic gambling. The percentage is quite low compared to other countries. Additionally, 84.9% of the people in Spain engage in one form of gambling or another. However, no studies were indicating public health difficulties or problems associated with gambling in the country.
What to expect
The expectations, for now, are subdued for operators as the Consumer Affairs ministry increases its efforts to limit the gambling industry in Spain. The ministry announced a new draft to increase consumer protection measures as a Royal /decree. Minister Alberto Garzón, the person behind the draft, indicates that the decree will aid in increasing awareness, will induce intervention and prevention measures to safeguard gamblers or players.
At the same time, the government is planning to integrate the self-excluded databases in each region into a single one. It follows the agreement that came to be in September of 2020, aiming to reduce the negative impacts of gambling on players. The operators are not against such rules, but the ban on advertising for licensed operations is bound to impact them negatively.
Many argue that the outcome that will impact the public on a larger scale is the development of black gambling sites with offshore accounts. Since arguments brought forth by Jdigital aren’t considered, the impacts of the regulation on the neighboring countries will likely see a repeat in Spain. The Sportsbooks are in a hurdle indeed, and the pain will continue to grow in the future.