This article was written by Marlen Estevez Sanz and Roberto Muñoz (Associates)
Case law update
The regulatory cornerstone in the gambling field in Spain is the Gambling Act 13/2011 which entered into force on 29 May 2011. As set out in the Act, it is an infringement not to have in place an enabling licence or authorisation to carry out gambling activities, leading to the imposition of administrative sanctions. However, as the regulation remains fairly new, the Spanish courts have not had the opportunity to develop or construe this requirement until recently. In the latest case law, the Courts have finally interpreted it and have underlined the position that those operators that do not hold the necessary enabling title will face severe sanctions.
For instance, in its decision of 26 May 2014 (RJCA 2014\563), the National High Court (Audiencia Nacional) confirmed the administrative sanction imposed on a company offering online betting games in Spain without the necessary licence. The court concluded that the company offered its services in Spain, since its webpage was in Spanish and, insofar as there were web connections from Spain, these were redirected to a Spanish domain (.es). Accordingly, the court concluded that acting without the enabling title was in breach of the Act, noting that it hindered the objective of “regularising a sector whose access shall be prohibited to minors, incapacitated persons or to persons who are barred from accessing it”. Further, by not holding the authorisation, the company did not guarantee (i) the rights of gamblers, (ii) that the persons who shall not have access to gambling did not, or (iii) that – through gambling – unlawful acts were not committed against the law or public policy; it was also noted that the company had not acted on an arms’ length basis. In addition, the Court considered that the absence of a licence is enough to evidence both the existence of an illegal activity and a guilty finding, which is an essential requirement for the imposition of administrative sanctions. The Court therefore concluded that the company had indeed committed an infringement though omission by not having the enabling title, and it confirmed the administrative sanctions that had been imposed.
The National High Court reached an identical conclusion in its decision dated 15 June 2015 (JT 2015\1299), which concerned similar facts. However, in this case, it was also highlighted that the infringer’s culpability was diminished as it had ceased carrying on its activities after the commencement of investigation proceedings was communicated to it.
Furthermore, the National High Court in its recent judgment dated 14 September 2015 (JUR 2015\238857), clarified that the fact that a company has a licence to operate which has been issued by another European country does not meet the requirements set forth in the Spanish Gambling Act. In this case, the company claimed that it was authorised to carry out remote gambling by the government of Malta. The court concluded that the “authorisation issued to the company under the laws of Malta cannot be considered as an enabling title for the exercise, within the territory of Spain, of the activities encompassed by the Gambling Act”.
Finally, in its judgment of dated 12 June 2014 (JUR 2014\275290), the Superior Court of Justice (Tribunal Superior de Justicia) of the Canary Islands, assessed a case where the granting of gambling licences by a Comunidad Autónoma was disputed. The court concluded that the competency of such territories cannot be extended to online games, since these games have an “undefined territorial scope” and inasmuch as there is no mechanism that could allow only the persons located in the Canary Islands access.
It can be seen from this review of recent case law that Spanish courts are confirming the sanctions imposed on those companies that seek to carry out gambling activities without the necessary licence, thereby applying the requirements in the Spanish Gambling Act and reinforcing the legal security of all those operators that comply with it.
The Spanish government has recently publicly stated that it is assessing a potential wide amendment to the Gambling Act. Further, there is a draft bill that aims to develop the provisions in the Gambling Act on advertisement, sponsorship and any other type of commercial communication of gambling activities covered by the Act, as well as on responsible gambling policies and consumer protection. We must wait to see whether the mentioned amendment of the Gambling Act indeed takes place as well as to confirm the final text of the bill.