Exclusive: Three operators generate 60% of Spanish revenues
Spain generated 78m in gross gaming revenue in first four months of regulation with three newly licensed foreign operators claiming 60% market share, eGaming Review can reveal in numbers seen by this publication.
Spain has generated 78m in gross gaming revenue in the first four months since regulation with three newly licensed foreign operators claiming 60% market share, eGaming Review can reveal in numbers seen by this publication.
PokerStars, bet365 and bwin.party dominate the market claiming around 47m of the total amount of 78m generated and, along with seven other operators including William Hill and takeover target Sportingbet, have around 90% of the newly regulated territory.
According to a source close to the matter the companies that dominate the market have spent large sums on daily television and online marketing as well as sponsorship in order to reach these levels, compared to local operators that have yet to register any significant online revenues.
“It is rather like the Italian market where only a few large companies dominate, but unlike Italy that started off like a rocket [in 2007] when it regulated, Spain has started more like a dummy rocket,” the source said.
In its first month of regulation almost 242,000 players were active generating 12m in GGR. This increased to 305,000 and almost 14m in revenue in July, and almost doubled to 24m in August however the number of new players fell dramatically with August seeing only 12,000 new actives open accounts.
As of the end of October only 30 out of the 53 licensed companies were operational in the newly regulated market. Sports betting has a 47% share of total turnover, poker 35.9%, while casino “ that does not include slots that are currently prohibited “ has 17.8% of the market. Of the casino market roulette makes up 60% of activity, blackjack 30% and bingo between 8 and 9%.
“Hardly any participation has been seen by the Spanish land-based companies,” the source said. “They have not acquired any visibility in turnover during these first four months of regulated business,” he added.
In sports betting bet365 has a 60% market share with bwin.party in second position with 20% and William Hill and Sportingbet 10% respectively.
In poker the market is dominated by three companies that, between them, claim around 99% market share. PokerStars has around 65% of the market followed by 888 with around 20% and bwin.party with 16%.
Casino is a slightly more competitive vertical with four operators claiming 70% of the market with 888 out in front followed by bwin, Gamesys’s Botemania bingo brand and bet365 who cross sell from sports book to casino and visa versa has worked particularly well.
The Spanish regulator collected approximately 20% of the total GGR figure, around 15m, in taxes between June and September this year and around30 to 35m for the first nine months of the year.
In 2012 alone the regulator said it generated 111.17m in income tax revenues compared to 69.7m pre-regulation between May “ when a law was passed to legalise online gaming “ and December last year.
Despite the industry believing the figure was higher, eGR has learned that approximately 41m was collected in back taxes following a ruling that determined operators had to pay 25% of Spanish gross gaming revenues from the day legislation was passed.
“The first four months of the Spanish regulated online gaming has been a slow start, but is not a surprise since the offer is limited with no slots and no exchange betting, plus deposit limits are restricted to 300 a day and 3,000 a month, liquidity in poker and bingo is poor allowing only local Spanish players, as well as the relatively high game tax of 25% in GGR,” the source said.
“The GGR is low for the standards due to the high marketing investments and very competitive quotas in the sports betting segment,” he added.”