The report focuses on the consequences of the enactment of the draft law on market access conditions and the position of traditional operators, taking into account the different treatment given to the various types and categories of games considered.
In particular, the daft law sets out a dual model for accessing the market, and for engaging in gambling activities, depending on whether the gambling activities relate to traditional lottery services covering an area broader than one autonomous region, or other types or categories of activity.
- In relation to traditional lotteries covering more than one autonomous region, the draft law reserves certain activities to the newly created State Society for Lotteries and Bets (formerly a public company and now converted to a semi-public company (LAE)) and the National Organization of Spanish Blinds (ONCE).
Regardless of whether this complies with European case law, the CNC considers it desirable that the law ultimately adopted establishes a clear causal link between the protection of the general interest (such as public health protection, the fight against tax evasion and prevention of criminal activities) and the reservation of such activities to certain organisations.
- In relation to games that do not fall within the reserved activities, the draft law requires dual licensing (general and singular licence) prior to any activity with a view to limiting access to those operators which have a certain level of financial solvency and respect for the law. The CNC considers that the requirements established for these licenses are in line with the need to protect the general interest.
However, in the CNC's view, the draft law establishes a numerus clausus system for each gambling category, which may restrict competition unnecessarily and make it more difficult to access the market, especially considering the licence is valid for a period of 15 years and may be renewed.
Consequently, in the absence of an adequate general interest justification, less restrictive alternatives should be considered.
The report also assesses other differences in treatment between gambling activities, such as the competitive advantages that traditional operators enjoy over certain forms or gambling categories. These differences may have an impact on competition in the sector.
The importance of avoiding regulatory asymmetries is even more important given that traditional operators already enjoy additional advantages, which may be reinforced by the draft law.
The differences considered include those relating to the taxation of gambling activities that extend beyond the territory of one autonomous region. The tax level generally differs depending on the type of game. Lottery activities, for example, are completely exempted.
According to the CNC, operators favoured by the tax exemption (such as LAE and ONCE) could use their position to make their traditional lotteries more attractive over other gambling activities and to improve their competitive position in respect of those gambling activities open to other operators.
The CNC is sceptical as to whether it is necessary to maintain the tax exemption in the draft law and requests that an adequate reasoning be provided to justify the differences in taxation regimes of the various gambling activities.
The CNC concludes that the existence of different taxation regimes may also impact on future competition within the sector, facilitating access for traditional operators to deregulated activities in comparison to the rest of operators.
The draft law on gambling was adopted on 4 February by the Spanish Government and will now be subject to Parliament's approval.
To view Community Week, Issue 507; 4th February 2011 in full, Click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.