Spanish online GGR ‘to surpass €500m in 2017’

Spanish online GGR ‘to surpass €500m in 2017’

Wednesday, March 29, 2017
The market surpassed €10 billion turnover for first time in 2016

Spain’s online gaming market reported another year of strong growth in 2016, and according to Eduardo Morales Hermo, senior advisor at Ficom Leisure, the sector is on track to generate gross gaming revenues of more than €500 million this year.

The evolution of online gaming in Spain continues at a strong pace, with the sector achieving a significant growth in overall turnover and gross gaming revenue (GGR) in 2016.

According to the latest data from the country’s gaming regulator, the Directorate General for the Regulation of Gambling (DGOJ), the Spanish online gaming and betting market surpassed the €10 billion turnover and €400 million GGR mark for the first time since it was launched in June 2012.

Drilling into the latest DGOJ statistics, Eduardo Morales Hermo, senior advisor at Ficom Leisure, said: “Turnover in Spain’s online gaming industry grew by 22.9% between 2015 and 2016, totalling €10.9 billion, compared with €8.56 billion in 2015.

“GGR growth was more than 34%, reaching €429 million, compared with €319.2 million in the previous year.”

According to Morales Hermo, the betting vertical leads the overall Spanish market turnover, accounting for 43.8% of industry-wide revenues. “However, the biggest product growth was recorded by the online and mobile casino games, which were 41% of the total turnover in 2016,” he stated.

“The increase was generated primarily by slots and live roulette. The betting GGR represents around 50% market share proportion, followed by the casino games segment with around 27%.”

The casino vertical’s surge reflects the DGOJ’s mid-2015 approval of online slots play. The poker vertical, however, continues to decrease and bingo continues to be a marginal product.

A breakdown of the online casino vertical shows that slot games were the most profitable product offered to local gambling customers. Revenues here amounted to €16.8 million during the fourth quarter, accounting for 46.7% of the casino bulk.

Roulette was the second most popular and profitable product during the three months ended December 31, 2016, totalling €12.8 million and representing 35.5% of the whole. Live roulette offered at Spain-facing online casinos generated revenue of €6.5 million. The remaining €6.3 million came from conventional online casino roulette.

“The overall gross gaming margin is considered low in the sports betting vertical, which is still under 5%,” Morales Hermo added. “In other European regulated markets, this is in the range of 7-8%. This makes an overall gross gaming margin in Spain circa 4% across all betting and gaming products.”

Spain’s online gaming market officially opened on June 5, 2012, with the launch of .es dedicated websites. In the first three quarters of 2013 alone, the Spanish market generated €168 million in gross gaming revenue, and the sector has continued to report strong growth over the intervening years.

The market is currently led by half a dozen international operators, with Bet365, William Hill and Bwin representing over 80% of the betting segment. Bet365, 888, Bwin and William Hill also represent more than 80% of the casino games market share.

PokerStars and 888 alone represent a similar percentage of the market in the poker segment. Among the Spanish national operators, only Sportium is gaining market share.

Looking ahead, Hermo said: “We believe that in 2017 the Spanish online gaming and betting market will pass the €500 million GGR figure.”

TotallyGaming says: The latest DGOJ statistics act as a clear indication that online gambling is on course to maintain its steady growth trajectory in Spain – and operators are jostling for position. During the fourth quarter of 2016, providers of gambling services in Spain spent 60% more on advertising than in the previous quarter, with promotional expenses amounting to €18 million. Although this eight-figure advertising sum outstrips some countries’ entire online gaming turnover, this is a drop in the ocean when considered in light of the Spanish market projections, where GGR is expected to top €500 million in 2017.

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