In many ways, the iGaming market in the UK remains the true jewel in the European crown. This sector produced an impressive GGY of £5.6 billion in the year ending September 2018, whilst this is expected to increase further in the near-term.
However, this market is now longer the fastest-growing entity in Europe, with Spain having assumed this mantle over the course of the last 12 months.
In this post, we’ll look at how this market has thrived in recent times and explore some of the reasons behind this growth.
A Look at Spanish Market Growth in Quarter One
Growth in the Spanish market has been pronounced of late, with the online gross gaming revenue (GGR) for this years’ first quarter having increased by 20% to €193.25 million year-on-year.
If we break these figures down further, we see that Spain’s sports betting GGR increased by 26% in the year ending March 2019, whilst totaling €100.8 million for the same period.
The sports betting vertical also increased by 0.63% from the previous quarter, with similar growth projected for the coming quarters.
The casino sector’s GGR also increased by around 20% year-on-year and 3.7% from the previous quarter, whilst growing to account for 35% of the Spanish iGaming industry as a whole.
This sector also peaked at €67.1 million during the first quarter, as this niche becomes increasing popular and accessible to operators from outside of Spain (we’ll have a little more on this later).
Online bingo is also driving growth in Spain’s iGaming sector, with 37 licensed operators currently offering this vertical to players. This also brings some much-needed diversity to the industry, whilst helping operators to appeal to a larger target market.
What are the Reasons Behind this Growth?
With the sports betting and casino sectors thriving in Spain, the foundations are clearly there for sustainable growth in the future.
One of the most important is the recent changes to Spanish legislation, which have reduced the tax burden on operators and enabled them to optimise their bottom-line profits.
In simple terms, Spain slashed its basic tax on gross gaming revenue from 25% to 20%, whilst also empowering various enclaves to offer further tax incentives to both domestic and international operators.
Take Cueta, for example, which is able to offer a reduced tax of just 12.5% on gaming activities. It also charges just 11.8% corporation tax on iGaming firms that are willing to relocate there, creating an extremely appealing proposition for companies both at home and abroad.
It’s rumoured that several iGaming brands in mainland Spain and even the UK are considering relocating to Cueta, in order to capitalise on these incredibly generous financial incentives.
Firms in the UK are certainly wavering, with the recently imposed FOBT cap and the proposed 6% in the RGD squeezing operator’s profits considerably. Together with the spectre of Brexit, this is creating something of a perfect storm in the UK’s iGaming market, and potentially playing into the hands of the Spanish industry.