Spain Hopes Its Gambling Sector Can Save Crumbling Economy

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Spain’s very troubled economy might be rescued by gambling sector.

30-second summary

  • Spain is still recovering from the global recession
  • Gambling generates a significant amount of revenue
  • The country lowered online gambling taxes by 5% in 2018
  • Brexit could offer an opportunity for Spain to expand its presence in the sector

Spain’s economic woes

Over a decade ago, Spain was hit with a devastating financial crisis. This led to significant levels of emigration, as well as mass unemployment in the region. It was the worst economic crisis the country has ever seen.

Following the collapse of the housing bubble, many other parts of the Spanish economy also collapsed. Nearly 50% of the Spaniards under 25 years old were unemployed and more than 500,000 families were forced out of their homes because they could not make their mortgage payments.

The main two political parties in the country also lost a lot of ground. In an attempt to force a recovery, the country underwent a severe form of austerity.

The economy in Spain has been performing better in recent years. It is now the fourth biggest economy in Europe and the property sector has been recovering. A lot of the young graduates who emigrated during the crisis are now returning home.

However, there still some worrisome problems. Youth unemployment is around the 30% mark, more than 10% of the Spanish population is living below the poverty line, and many business sectors are stagnant. Gambling is one of the saving graces in Spain. It is a popular activity, with more than $2.16bn (£1.68bn) in bets each year.

Spanish gambling habits

Gambling has always been popular in Spain, even when it was not socially acceptable. The most popular type of gambling in Spain is the lottery. The proceeds of this lottery go the Catholic Church and to various charities.

There are 20 casinos in the country. Most of them are in the major cities such as Madrid and Barcelona or at popular tourist destinations. Online gambling is also very popular.

Sports are a big part of Spanish culture. The most popular sport by far is football (soccer). Tennis, basketball, and horse racing are other popular sports. Many tourists who visit the country play a large part in the success of the gambling sector.

Latest gambling sector figures

The gambling revenue figures for 2018 have yet to be published. However, it is safe to say that there will be an increase over 2017, which was a record year for the gambling sector in Spain. Because 2018 was a World Cup year, expectations are that it will be yet another record-breaking year.

The Spanish government realizes the potential of the gambling sector, which is why the online gambling tax rate was cut from 25% down to 20% in June 2018. That move will likely make the country a bigger priority for online operators.

More competition in the space will, in turn, lead to more players playing for longer. There will be a lot of variety in the space, giving people plenty of options.

The United Kingdom is still the leader in Europe for gambling revenues. In 2017, the gross gambling revenues were £14.4bn (£11.2bn), for example. France also has significant operations, but most of its revenues come from land-based sources. Spain is still behind Germany, the Netherlands, Switzerland, and the United Kingdom in the rankings for online gambling in Europe.

Brexit is causing a lot of uncertainty in Europe. If Great Britain leaves the European Union, it could open up a significant opportunity for online gambling in Spain. A lot of online casinos have their headquarters in Gibraltar, which is a British territory.

With Brexit, these operators may want to move their operations to somewhere in the European Union to take advantage of the EU legislation. Moving into Spain would seem like a logical move for those companies.

Spain will certainly be looking to seize any possible advantage. With gambling being such a significant driver of revenue, the country will continue to support operators as best as possible.