The need for the Spanish government to resume the regulation of advertising and commercial communications for the online gaming and betting industry was a matter of urgency over and above to resolve other minor problems as consequence of the pandemic of Covid19 such as thousands of contagious still in hospitals and intensive care units, deaths continuing to happen, with Spain leading the number of deaths by inhabitants in the range of 44.000; collateral damages of the pandemic with more than 10% of the medical care staff contagious as well, numerous new breakouts happing after the end of the lockdown, with some areas of the country going back to partial lockdown measures, over 3 million Spaniards temporarily laid off and circa one million just fired, and hundreds of thousands still not collected any unemployment money after 3 months, 20% of unemployment estimated by the end of 2020, with an exponential increase of the unemployment and companies bankruptcies come September – October predicted by different economic institutions; the gross internal product down 5,2% just in one quarter and estimated to go down to 11% by the end of 2020; people queuing for food in most cities and specially in Madrid where you can see people pertain to middle class without any means to buy food. Still slow recovering of the retail activity across al business and commercial segments, specially concerning the impact in tourism, bars, restaurants activity; and we could go on and on…. A real concerning estate of emergency – but the last words from our President of the Government is that everyone shall go out and enjoy freedom again. “Lovely Jubbly!”
But all of this is minor issues and what matters is to tie short those despicable individuals and company legally operating the industry of online gaming and betting, with the excuse that 0,3% of the consumers might suffer the consequences of a terrible catastrophe such as is gambling in desperation without hope of return to a rational live hood.
So, without consultation or dialogue with the industry, already self-constrained and responsible behaving to protect vulnerable people with strong measures of responsible gaming, the priority of the Ministry of Consumer Affairs decides that his crusade against a properly regulated gambling activity is a priority, restricting or prohibiting any advertising, commercial actions and promotions shall be put in place for “private gaming”, leaving aside the highest volume wagering part of the gambling industry which is the public and semi public gaming under the protection of Father State (National Lotteries SELAE) and Mother State (Charity Lottery, Draws, Scratch-cards, Instant Games, etc. ONCE).
And here we are now with an amended draft of the decree law published for public consultation on 24th February, under a renewed version dated 30th June 2020, which was “enhanced” with more restrictive - if possible – content than the first draft.
The provisions set forth in Title I of this royal decree shall not apply to the ONCE - (Spanish charity lottery concessionaire) - with respect to advertising, image, sponsorship and promotional communications, including those made on social networks, made by said entity regarding social reasons " ONCE ”,“ ONCE Social Group ”as well as the rest of the entities that are part of the“ ONCE Social Group ”or denomination that replaces them, related to the activities of rendering specialized services for blind and partially sighted people and to activities of solidarity with other people with disabilities, provided that in such communications there are no references to the activity or gaming products.
Other measures of interest that we extract from a text in which the treatment of televisions in general stands out against the rest of the media and search engines such as Google.
There are some “major” changes from the draft published on24 February 2020, which are directly implying more restrictions and/or prohibitions as a whole of the advertising, commercial communications, sponsorship and all related to marketing actions using the brands or names of the operator or gambling company.
The Draft of the Decree Law is worrisome overall but specially as it is clear the discrimination which establishes against private gambling respect to the public gambling offer of the Charity Lottery ONCE and the national Lottery SELAE.
Is nothing new under this new regime, just another step into discrimination and a clear attach to the freedom of business, which is a fundamental right expressly recognized in article 38 of the Spanish Constitution, and in the European Charter of Fundamental Rights.
The online gambling and betting are a legal established activity in Spain, regulated under a praised model regarding access, activity control, and protection of vulnerable groups, as paramount part of the regulation framework and operators objectives. And since it’s the legalization by the Law 13/2011, of May 27, which makes the Spanish digital industry a highly regulated sector that acts and governs its actions under the responsible gaming principles.
And it is in this area where the public and semi-public gaming operators are exempted to comply with. Therefore it is very clear that this discrimination, restrictions and prohibitions towards private gaming responds to an ideological issue – even further an individual and not collective ideological position of the Ministry and the party supporting him – which is far away from any intention of protecting the rights of the consumers and vulnerable people.
It must be known that in 2019, the European Commission that recommended to its state members to promote laws that give the same treatment and not to discriminate private from public gambling, clearly infringed by the behaviour of the Spanish Government thru the Ministry of Consumer Affairs, and it is a must that the EU thru the Commission will have something to say about the undermining of free competition which is established by this draft of the Decree Law just approved to be revised by Brussels and eventually implemented in Spain.
The direction taking by the Spanish government regarding advertising and commercial actions of the regulated online gaming and betting, is no more that the opening doors for the illegal offshore offer to grow as it has happened during the lockdown period when the advertising and commercial actions and promotions where temporally restricted to prohibition, and with the content of this new draft of Decree Law reinstates the same scenario which means that the offshore offer will continue taking the market for granted.
Online gaming and betting under a regulated market framework have to compete with the offshore offer with a fair and competitive advertising, commercial promotions, fair taxation, allowing them offer competitive prices and product in order to discourage the players to opt for the openly uncontrolled offshore offer which does not provide any guarantee to the customers, vulnerable persons and refrains from contributing with taxation obligations. Altogether the law of the jungle.
During the pandemic lockdown and restrictions to prohibition of advertising and commercial promotions to the legally established licensed operators, the non-licenses, illegal, impossible to constrain operators from offshore jurisdictions were enjoying the best of all worlds, and that was noted by the exponential increase of traffic towards the illegal sites, which obliged the regulator to close circa 500 websites during lockdown period. What else they need to know ??
Draft Highlight pearls of interest affecting the online gaming and betting industry:
• The issuance of advertising and commercial communications can be offered exclusively within the timeframe from 1:00AM and 5:00AM. The commercial communications of the gaming operators in audio-visual communication services during the live broadcasts of sports, equestrian or other events of a competitive nature, only can be issued between 01:00 and 5:00, without prejudice to the special rules established in articles 21 and 22.
• The draft establishes the prohibition of famous people or public notoriety in commercial communications. That includes actors, sports relevant figures and other popular personalities who might be famous or publicly known. The DGOJ will determine unilaterally who will fit under those standards.
• The sponsorship of activities, sports events, or broadcasts thereof, specifically directed or whose participation is restricted exclusively to minors, will not be admissible.
• The brand image, trade name, company name, material or promotional messages of the sponsor will not be used in events, goods or services designed for or mainly intended for minors.
• No sponsorship activities may be carried out that consist of the use of the name, brand or trade name of an operator to identify a sports facility or any entertainment centre
• Nor may sponsorship activities be carried out that involve substituting or adding to the name of a team or sports competition or any other entity outside the sector of gambling and betting the name or commercial name of an operator.
• Sponsorship in sports jerseys ´- shirts - or kits will not be admissible.
• The issuance, placement, or dissemination of sponsorship through commercial communications through retail media in stadiums, facilities or sports venues of any kind must comply with the time limitations and requirements established in this royal decree for the modalities of audio-visual communication services.
• Customer capture promotions are prohibited regardless of the conditions of the promotion.
- For these purposes, it is only allowed to offer promotions to customers who, cumulatively:
• a) Have a gambling account open for at least one month.
• b) They have been documentary verified
• c) They have made a minimum of three deposits.
A more deep and analytic study of the Draft of this Decree Law shall flourish more pearls against the legitimate activity of the online gaming and betting industry fruit of the unconscious and totally sectarian minds of those who don’t have anything better to do, or just are no good for anything else.
But for now, just going to go smoothly thru some of the areas of the draft we can also pinpoint some evidences that converts this draft into a real “cluster bomb” against the industry:
ADVERTISING AND COMMERCIAL PROMOTIONS
The new draft will only allow online gaming and betting advertising and commercial promotions/actions, in radio and video exchange platforms (such as YouTube) during a limited timeframe from 1.00am till 5.00am. Of course, this will not have to be followed by the public and semi-public lottery and instant gaming entities such as National Lottery SELAE nor Charity Draws ONCE. These restrictions apply also to live betting events. Well this clear discrimination and lack of decency shall be challenged under the Competition Authorities in Spain and EU.
BRAND AND MATERIAL SPONSORSHIPS
The extended restrictions also affecting marketing and branding tools such as such as sports sponsorship is just the “cherry” to the pie. The law establishes that sponsorship or branding in sports jerseys, shirts or kits will not be allowed. And the guy who wrote it just did it with all consequences and surely remained “tan pancho” we would say in Spanish. It does not discriminate whether they media or static land-based advertising and sponsoring, it seems that affects the whole lot.
The prohibition also affects to in addition to any gaming operator naming a stadium or sports facility, and also the possibility of including its brand within the name of a team.
Spain is not different to other EU countries and has most of the first, second division football, basketball and other sports have an online gaming and betting sponsor or special partner. That shall be gone within 3 months of the publishing of the Decree Law sometime after September 2020.
PROMOTIONAL AND WELCOME BONUSES
The draft of the Decree Law also establishes an important restriction/prohibition in the promotions for bonuses and welcome bonuses and player capture promotions, not allowing to offer any kind of money compensation for first log into the promoting website. It is very simple, the draft establishes that - customer acquisition promotions are prohibited regardless of the conditions of the promotion - and it will only be allowed to "offer promotions to customers who, cumulatively, have a game account open for at least one month; have been verified documentarily and have made a minimum of three deposits made.
We shall see what happens with this Draft during its transit in Brussels and how much the EU authorities and European Commission are willing to intervene in protecting the freedom of competition and freedom of enterprise, because this draft does not in any way protects the vulnerable ones, nor offers more guarantees to the consumers, massacres the operating companies, while the offshore offer will lack any compliance obligation including AML regulation, and ruins the business overall, including the treasure revenues, which will change direction from Spain to any of the offshore jurisdictions protecting the illegal online gambling and betting offer. There always shall be an space for hope that common sense and rationality, and that the draft of the decree law in consultation process will finally have a more reasonable content to make prevail the general interest and fundamental rights of free enterprise and respect to those investing and performing a responsible corporative behaviour in the gambling industry.
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